According to a report by DFC Capital, blockchain-based gaming companies have seen $476 million in investments in the first half of 2021 alone. Spending on gaming software is predicted to grow up to $164 billion in 2023, an increase from $118 billion in 2018 and sales from gaming hardware is also expected to increase more than $80 billion by 2023.
It’s evident that the gaming industry is experiencing rapid growth. It only makes sense when you look at the booming eSports and video gaming industries. But one of the last places people would look for an explosion in the gaming sector is in the cryptocurrency space. With the emergence of play-to-earn gaming, a new gaming model that rewards users who buy cryptocurrency, that’s all changing.
Play-to-earn is a new class of gaming that utilizes the notion of an open economy by allowing players to gain further rewards in addition to their investments. Unlike traditional games like The Sims, where players can buy in-game assets and currency, play-to-earn platforms allow players to gain real-world value with their wins. The added capability for liquidity is an exciting new development in the NFT space, where games like Axie Inifinity and Sandbox have been seeing huge success in 2021.
The reason play-to-earn is such an effective business is due to the psychology behind it. Usually in the NFT space, value is gained by trading and transferring the individual assets. Play-to-earn provides an additional level of engagement for users by giving them with the agency to grow their own value while competing in an engaging and compelling environment.
By participating in the play-to-earn ecosystem, players create value for themselves by being rewarded with in-game assets including rare characters and cryptocurrency. The more time and effort they put into the game, the more they are rewarded.
Axie Infinity, inspired by Pokémon and based on the blockchain, was created by Vietnamese developer Sky Mavis and currently has over one million daily active users. Players breed, purchase, and train “Axies”, the creatures that then battles it out with one another for cryptocurrency Smooth Love Potion (SLP). The more SLP a user gets, the more they can breed their Axies. Another example of a play-to-earn game is Bloktopia, a decentralized metaverse backed by Polygon that brings virtual reality gaming to the crypto world.
Then there’s OneTo11, a play-to-earn fantasy sports app where users can compete against one another in a decentralized and transparent way, allowing players to earn along the way. The platform rewards its players by levelling the playing field, with each player ranked with equal opportunity to win. Users can create a fantasy team to enter contests and win when they’re ranked in the top 75%. If they refer other users to the platform, they can also earn 1.5% of their contest fee.
Momento is another frontrunner in the play-to-earn space. Its cross-chain token $MOMENTO runs on the Ethereum network and Binance Smart Chain and its staking mechanism allows NFT owners to earn through their digital assets. Players are incentivised to have a higher engagement on the platform due to the lucrative rewards they can reap from staking. In addition, their team is developing a casino and fantasy football league where users can play using $MOMENTO tokens and various NFTs and earn a passive income source.