Play-to-earn games: Crypto, Volatility, and Scholarships. The new trend in gaming where players take on added speculation in emerging digital technologies.
In the past decade, the gaming industry has been booming like never before. Smartphones and mobile gaming have decisively changed the industry and made it one of the most relevant segments in the entertainment market, but also one of the most innovative. One of the leading innovations in this field in recent years is play-to-earn games, which combine aspects of traditional gaming and emerging digital technologies, such as the blockchain.
In these types of games, users can get to play appealing and immersive titles while getting the chance of winning funds, which usually come in the form of digital assets, known as cryptocurrencies, or non-fungible tokens. In fact, play-to-earn titles mostly rely on the hype around crypto to attract new players. Some of the most popular games based on this model include Axie Infinity, the number one NFT-based game in the world, but also Gods Unchained, Splinterlands, Pegaxy and Thetan Arena.
However, whereas on the surface this may seem like a lucrative way to spend your time, the play-to-earn model has been heavily criticised for its dubious economic model.
Crypto, Volatility, and Scholarships
While the play-to-earn model may seem like a novelty, this isn’t exactly true. For instance, digital gambling platforms, which have been around for some time now, are similar to this model in the sense that users can play online games that pay real money. Some of these games include classic casino games, such as virtual slots, poker and baccarat, among others. However, the big difference between online casino platforms and play-to-earn models is that online gambling relies on stable economies. No type of speculation or volatility affects the value of prizes and earnings.
While online casino games follow strict regulations, newer and largely untested models, such as play-to-earn, are unable to guarantee players that their investments won’t lose their value entirely. In other words, this means that when players collect prizes while playing on an online gambling platform these credits, which are paid in well-established currencies, offer security to their players in terms of their volatility.
For instance, most of these games are based on specific cryptocurrencies and NFTs that can only be traded between players. As a result, this means that many of these games are based on player-to-player exchange models in which the value of certain assets within the game, whether skins, land or rare characters, depend solely on speculation. In practical terms, this means that players’ investments that may seem rock solid one day can turn sour the next.
In fact, over the last year, many NFT-based games have struggled with the growing decrease in the price of internal cryptocurrencies and, consequently, the value of in-game assets. In this sense, players need to look at play-to-earn games as a form of investment. What’s more, some of these games even require players to purchase a certain number of NFTs before they can start playing. At first sight, these investments may seem normal given that these games are in fact free to play, however, in the case of Axie Infinity, players sometimes need to invest up to $900 to start playing.
Consequently, this particular game has spawned the creation of so-called “sponsorships”. Players who can’t afford the initial investment are sponsored by entities who pay for their entering fees. These players then must share their profits and, in instances, even become employees of these entities.
Overall, users interested in joining these types of games are advised to consider all the alternatives available in the market and should be fully aware of what such investments might entail.