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Earning loyalty: how game companies are using play-to-earn

From Lars Rensing, CEO of enterprise blockchain and Web3 solutions provider Protokol

Gaming as a whole is a highly lucrative industry. Figures revealed that total consumer spending on video games in the U.S. alone totaled $60.4 billion in 2021, and the PC gaming industry specifically is expected to accumulate $46.7 billion by 2025. Online gaming also tells the same story, with an estimated 1 billion online gamers worldwide, and gaming audiences projected to surpass 1.3 billion by 2025.

It’s clear that the industry’s growth isn’t going to slow any time soon. However, with the acceleration in adoption of technology like blockchain, there are now more new ways for game studios, gaming organisations – and the players themselves – to earn money. This is through a medium known as ‘play-to-earn’, where gamers can earn payments as they play, typically in crypto assets. Play-to-earn has skyrocketed into the gaming industry and is a huge area of growth, with play-to-earn games seeing an over 2000% increase in their user base during the first three months of 2022.

Given how quickly play-to-earn is growing in popularity, many game studios and developers are beginning to explore this new medium. But how does it work, and how can gaming organisations teams ensure their gamers get the best possible experience? 

 

Levelling up play-to-earn

Play-to-earn games, underpinned by blockchain technology, are a new breed of games which allow users to earn cryptocurrency, NFTs, or related rewards as they play. These kinds of games are fast becoming a staple of gaming, and allow players to get more out of their experiences. For instance, games like The Sandbox and Axie Infinity are quickly gaining popularity among gamers worldwide.  

The majority of play-to-earn works by rewarding players with digital tokens, but one alternative model that games have been taking for play-to-earn is rewarding players with NFTs. NFTs — blockchain-based tokens that cannot be forged or replicated — can be offered by game companies as exclusive collectibles for fans to earn or win. These collectibles can even be paired with unique experiences, with the NFT acting as a ticket exchangeable for coveted experiences or rewards. 

NFTs can also be used by games companies and developers to use play-to-earn games to their full potential. More than just collectibles, developers can offer NFTs as unique in-game assets such as weapons which can be earned or exchanged by players and used in the game, with the potential for the owners of those assets to actually boost their value by playing, rewarding them for engaging with the game and its community. 

By using blockchain technology, it is easier for gamers to prove ownership of assets, and for the first time, transfer them between players, earning revenue as they increase the value of their items through gameplay. Using play-to-earn strategies alongside NFTs not only enables games companies to reward players for their time, but it also allows the companies themselves to develop a stronger and more loyal user base. 

Rewards earned in game can also potentially be sold for profit as they go up in value. For example, in Axie Infinity, you can earn AXS tokens. When you fight monsters and complete tasks, you are rewarded with AXS crypto tokens, which can be resold via exchanges for fiat currencies or used to buy NFT assets which make the game easier. 

Blockchain could cause a paradigm shift in the way people view and interact with the games they play. Blockchain-based play-to-earn games are an exciting new development, and are a great way for players to be rewarded for what they love. Adding NFTs into the mix allows game companies and developers to foster more loyalty and engagement with their players, as well as creating new streams of revenue. We can only expect to see play-to-earn grow as the technology progresses, and game companies can look to the technology for new innovative changes to their games.