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A Guide to Play to Earn – GameFi
Today we will be talking about play to earn, and it’s an evolution into what has now been called GameFi. It’s a big deal; it’s the financialization of blockchain games. The use of Defi as a mechanism for helping people who play games earn while they’re playing, and then, of course, on-ramping into a defined ecosystem that can do anything that Defi can do.
Global Gaming Statistics
Regular video games are overgrowing, and it probably hasn’t been helped by Covid. Gaming is growing at a rate of nodes, and it is also growing because people are now able to earn a living through E-sports, but there are 2.9 billion gamers on the planet that, as a fraction of the global population, is getting towards half. 74.9 billion dollars spent on video games in 2020.
What is play to earn?
Ubisoft making blockchain games Electronic arts CEO thinks NFTs and Play-to-earn are part of the gaming industry’s future. P2E is a new business model that supplies financial benefits to all players who add value by contributing to the game world. It’s the latest game development and brings new game concepts and retention models not yet seen in modern gaming. When you level up in any game and create value in your characters, all of that value is locked up inside that game ecosystem, and you can’t unlock it yourself. It’s just simply internal value in an internal economy. Play to earn unlocks that value, meaning it unlocks the effort you put into a game, gives it back to you, and gives you ownership over the assets in a tangible financial sense that plays to earn. Now let’s compare different modes. One was pay to play in which you buy a game to play it. So you buy a license from a digital store or a physical copy. This included Minecraft, GTA, and FIFA. Now the other one was free to play. So you always have downloadable and give consumers a limited experience. Gamers will have to pay to speed up their progress to obtain special items. These games include Fortnite. Then we get into play to earn, giving gamers ownership over in-game assets and increasing their value by actively playing the game. They also reward players for putting time and effort into the game with cryptocurrencies or in-game resources. You can then turn it into real money.
Examples include
Axie Infinity, in which you as a player earn SLP, a smooth love potion; by battling with your axie, you can breed new axis with SLP or sell them on the open marketplace.
Sorare is a fantasy and twisting football game that uses NFTs that lets you purchase, verifiably own, win rewards, buy and sell digital player cards from more than 100 licensed teams.
Star Atlas, ATLAS token will be generated through in-game mining, market-making, and trade. PVE missions and resource gathering.
Crabada, in which you mine, loot, breed, expand your forces, earn CRA tokens by playing and use them to determine the future of the Kingdom.
Emergence of GameFi
Andre made a quote that Gamification applied to monetary policies excites me so much. Your funds are becoming gear to use in this defi game. We have been cloning tradfi; as we advance, we go into gamefi.
Working of it
We have a couple of flavors of play to earn.
P2P2E is pay-to-play to earn. One example is axie infinity, in which you need to buy three-axis before battling. At the moment it costs around about six hundred dollars, that’s quite a lot. Sorare similarly requires players first to invest money in playing cards.
F2P2E is free to play to earn. League of kingdoms has lands that are energies in NFTs and owned by users. You can own, play, and earn rewards by developing your kingdoms. With passing time, you slowly level up.
Problems they are trying to resolve
The problem was that Fortnite alone was responsible for 1.8 billion dollars in revenue, even though the battle royale game is free. Players spend money and throw their value in a bottomless pit. When they stop playing these games, their wallet will be empty. Many games are adding coins and internal currencies because they recognize the value of all that and what people are prepared to spend on items. After all, it is a kind of clout. It represents who you are; it shows people that you have progressed through a game, and there is value in that from a reputational point of view.
Centralized Value Creation
“Blizzard removed the damage component from my beloved warlock’s Siphon Life spell. I cried myself out to sleep, and on that day, I realized what horrors centralized services can bring”. This is the pain suffered by one user of the world of Warcraft when he realized that all the value and time he’d invested in playing this game had just been rugged. This person was Vitalik, and this is why Vitalik formed Ethereum because he realized that the system of centralized value creation wasn’t on was just not something he wanted to sign up to something anymore for whom gaming is a significant part of their identity in the world. Play to earn changes this. All obtained items represent a particular value. This means that gamers will always make some money the moment they step away from a game. The benefit of the play-to-earn business model is that a gamer always creates some values that can be sold. Even when a gamer needs to pay to start playing, these acquired items can be sold again.