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Play-To-Earn (P2E) NFT Games
A Guide to plat-to-earn in Crypto and NFTs. Learn how gamers are making of living off playing web3 games.
8 min read
Gaming is a 200 billion dollar industry with a trajectory that continues to moonshot upward. As internet connectivity expands globally, gaming will continue to explode in popularity and utilization. As a result, the fierce, competitive digital landscape will eventually encompass the entire planet. So we're saying that the gaming industry is a pretty big deal if you haven't caught on yet. And NFTs are going to play a significant role in the future of that 200 billion dollar industry.
Although the gaming industry is booming, only a tiny fraction of players make a substantial amount of money through gaming, primarily through endorsements and competitive earnings. Well, that's all about to change. Blockchain-backed web3 technology offers a new playing field, and possibly career path to gamers — P2E, or play-to-earn gaming. By leveraging infrastructures like blockchains, NFTs, and cryptocurrencies, P2E can democratize the world of online money-making by instantly rewarding players for their competitive, in-game effort.
This guide will explain what P2E games look like, how you can play them, and most importantly, how you can earn.
What Are P2E Games?
As the name suggests, P2E games allow you to earn rewards that have real-world value. Each P2E game is unique in itself and has its own criteria to earn, but here are some noticeable ways in which they are different from traditional games:
Ownership and Decentralization
In traditional games, all of the assets you earn in-game are owned by the game developer. These gaming corporations are centralized entities that have complete control over your progress, digital assets, and in-game investment.
In P2E games, all digital assets and earnings are owned by you. This ownership is facilitated via blockchain technology. In-game digital assets can include NFTs, utility tokens, and more — all built over existing chains. Due to the decentralized nature of blockchain, nobody, including the game developer, can take your digital assets from you.
Real World Value
Gamers have been flexing their digital assets like skins and characters for years now. Some assets are so flex-worthy that people pay real money to purchase these in-game valuables. The problem with purchasing traditional in-game assets is that they have no value outside the games in which they are used. Therefore, you can not trade or sell them for real monetary value. In the case of P2E, your digital assets can be in the form of NFTs, where you can trade that asset outside of the game, in an open marketplace, for a value determined by the market.
Also, the tokens you earn in P2E games are built over existing chains. So, you can exchange them for cryptocurrencies, holding real-world value. For example — Decentraland is built on the Ethereum blockchain.
How Do P2E Games Make Money?
Once a game is developed, P2E games earn money by charging their players for the transactions happening in the game.
For example — a 4.25% fee is charged by Axie Infinity for buying and selling Axie NFTs, and they also charge for breeding them. So the game has a constant source of income for game developers.
Another way P2E games earn money is by releasing new NFT collections that have specific utility in their games or gaming ecosystem.
How to Play P2E Games
Because the underlying technology is blockchain, accessing P2E games is similar to accessing cryptocurrencies. However, instead of logging in with login credentials, you'll have to log in using a crypto wallet. In most cases, your Metamask wallet will suffice.
Each P2E game is different, but just like other games, they are intuitive enough to be learned while playing. Some games allow you to play for free, while others require that you purchase an NFT to play. For example, Decentraland is free for you to enter, but Axie Infinity requires you to buy three Axie NFTs before entering the game.
There is another way you can get started if you can't fund your own NFTs in Axie Infinity. You can join a scholarship program where some other player will give you an NFT for free, but in exchange, take a part of your profit.
How You Can Earn Through P2E Games
As players join a P2E game, they essentially create an economy around the game itself. All P2E games have their own native tokens that run these economies. These tokens are built over an existing blockchain, making it easy to exchange them for cryptocurrencies like Ethereum.
As you progress in the game, your in-game assets become valuable. If the game you are playing grows in popularity, the value of these P2E NFTs rise even further. So, in addition to earning tokens through playing, there is a possibility that you can flip your NFTs at a higher price and make a profit.
In 2021, some gamers from the Philippines earned more than their full-time jobs from Axie Infinity. This clearly shows the potential of P2E gaming and the level of income it can generate for its participants.
Most Popular P2E Games and NFTs
There are already a handful of P2E games that you can play to enjoy and earn. A game's popularity helps power its ecosystem by making items and tokens more valuable, which in turn brings more players to the game.
Here are a few of the more established P2E games to get started with:
Decentraland
Decentraland is a decentralized virtual reality platform on the Ethereum blockchain. In this game, you can own "parcels" of a virtual 3D space by purchasing it through MANA. Here, MANA is the native cryptocurrency of Decentraland, and the whole virtual 3D space is a Non-fungible digital asset known as the "LAND."
Once you own a "parcel," you can build anything like 3D scenes or interactive games on a parcel to increase its value. These parcels are further organized into themed communities or districts for everyone to enjoy.
Axie Infinity
This is the most popular P2E NFT game you will come across. Axie Infinity is developed by gaming studio Sky Mavis. In this game, you start with three Axies that are your in-game pets, as well as NFTs. Your goal is to battle, breed, raise, and build kingdoms for them.
Axie Infinity has many gaming modes for enjoying multiple experiences. Its economy is player-owned as they can trade resources directly from each other. There is also a utility token known as AXS that you can stake for voting rights that align the vision of developers and players.
You earn money in Axie infinity by selling your NFTs or AXS tokens.
The Sandbox
The Sandbox is a unique virtual world where you can build, own, and monetize your experience through the "SAND" token. SAND is a utility token that lets you participate in the governance of the platform via DAO to be a part of its key decisions.
As a player, you can create digital assets i.e., NFTs, that can be uploaded to the Sandbox virtual world to create an experience. Sandbox game makers create these experiences.
Gods Unchained
Gods Unchained is a trading card game where players compete in duels using cards. The core currency of this game is the "GODS" token that runs the economy of this game to support the P2E Model. GOD token is used to upgrade your trading cards in the game. As these cards are an NFT, upgraded ones have higher value; hence, you can trade them once you upgrade.
P2E and Metaverse
The ability to "flex" your assets and share them with your peers is a core pillar of online culture. Web3 is no exception. One of the best places to showcase your P2E NFTs is in virtual landscapes built in the metaverse.
We can already see Decentraland morphing into a thriving virtual world, where people spend thousands of dollars to own a parcel of land and showcase their NFTs. No different than owning a beachfront property and flexing your Super Bowl trophy.
As the metaverse becomes more mainstream, it will largely be due to the established economies of the P2E games flowing into new virtual landscapes.
As the metaverse becomes more mainstream, it will largely be due to the established economies of the P2E games flowing into new virtual landscapes.
P2E + NFTs = Game on!
The gaming industry is climbing at a rapid rate. But instead of resources accumulating to a small fraction of people, P2E seeks to democratize earnings and reward players with real-life value for their efforts. This could have a flywheel effect for web3, where more people are incentivized to get into gaming, and thus become familiar with crypto, NFTs, and blockchain.
As people will spend more time in these virtual worlds, form economies around them, and win fantastic rewards in the form of NFTs — we will see more adoption of the metaverse as well.
All these factors combined can make the P2E gaming industry one of the most important applications of blockchain technology we've seen to date.
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