The gaming industry has grown enormously in the last few decades — the best internet connection, faster PCs, and huge mobile gaming market. In 2020, the industry was even able to generate higher sales than movies, music, or sports. So it’s no wonder that the use of cryptocurrencies and blockchain technology in video games wasn’t long in coming.
One of the latest inventions in the gaming industry is hidden behind the term ‘Play to Earn’, which represents another model for Pay to Play (P2P) and Free to Play (F2P) on the market. But what exactly is behind this still quite a new concept and how important will the trend be in the future? Let’s try to find out!
Play-to-Earn Model: Basic Info to Know
The term ‘play to earn’ represents a relatively new model, which is usually based on the free-to-play concept as there are too many games that can be used free of charge. However, some providers expect players to buy in-game tokens in advance. However, the difference to F2P is big. With play-to-earn games, users can earn valuable digital content usually in the form of NFT, or even receive cryptocurrencies.
The idea behind the model is quite simple. Users can unlock different in-game items through various actions and successes — from skins to rare armor or weapons. The rarer the item you won, the higher the sale price will be.
By actively participating in the game process, players can increase the value of the items they have won. An active community is therefore ideal for adding value to various NFTs.
NFTs and Blockchain Technology
The aforementioned Non-Fungible Tokens (NFTs) present advantages for players since the respective items are now legally viewed as property. This is a big advantage compared to games like Counter-Strike: Global Offensive or Fortnite as here the skins earned belong to the company and not to players.
In addition, each NFT is unique and cannot be copied or falsified. However, developers have the option of creating the same items in a limited edition. Thus, it’s possible that a particularly rare sword appears five times in the game, for example.
NFTs or issued cryptocurrencies are tokenized using blockchain technology, which offers a high level of security for accounts and items. In this way, users can be sure that the in-game content they have won won’t be stolen.
Investment Opportunities in Gaming: Final Conclusions
For entrepreneurs, independent developers, and investors, play-to-earn games are an unusual opportunity to be part of the industry from the very beginning. Blockchain technology offers the potential to open up these economic models and determine a level never seen before. The crypto economy has the potential for gaming communities to share in the success of the games they love.
Many investors and gamers are monitoring the current hype around crypto and NFT and wonder what exactly the future will look like. There is a place for long-term investments as the market is currently very volatile. If high-quality games enter the market, blockchain-based games could become the fastest-growing segment in the video game market.
What other interesting facts about the play-to-earn model do you know? Feel free to share your knowledge in the comments!