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The gaming industry is growing at a rapid pace, and the emerging play-to-earn model coupled with blockchain and the Metaverse is the future.
The gaming industry, which has always been synonymous with fun, has grown massively in recent times, and a lot of money is now being mentioned when gaming comes up.
Since the introduction of Web 3.0, there has been immense growth in the industry. At the end of 2019, the global gaming market was reportedly worth $152 billion.
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This growth has meant that, since the introduction of Web 3.0, there has been a consistent rate at which Web 3.0 games are growing and garnering increased adoption. A lot of money is being made, and this has, in turn, attracted a lot of new developers to the space.
Gaming in the past has always been a one-sided relationship, where only the developers or owners of a game get the financial gains while players are left to just have fun and keep spending.
A new economic model has now been introduced but, in the years leading up to it, players have spent a lot on gaming. In 2020, the mobile applications industry saw customers collectively spend $143 billion.
Gaming apps took a huge $100 billion of that amount. This implied that, for every dollar that was spent on the Google Play Store (for Android devices) and the App Store (for Apple devices), gaming apps took a hefty 70% of it.
Even with the introduction of the new model of gaming, it is estimated that over $120 billion will still be spent on mobile games in 2021. This will represent a 20% increase from the figures of 2020.
The new gaming model I’ve mentioned twice now is the play-to-earn gaming model. It is no lie that interest in play-to-earn games was sparked by the global COVID-19 pandemic. The same can be said for the virtual worlds or the “metaverses” that these games are hosted on.
So… What is the Metaverse?
“Metaverse” is a combination of the prefix “meta,” which means beyond, and “universe.” So, the Metaverse is a world beyond the universe. An otherworldly place, so to speak. In the Metaverse, virtual lands, avatars and even buildings can be bought and sold.
This is most often done using cryptocurrencies. In these virtual environments, people can move around freely with their friends, attend events and buy goods and services. Essentially, doing the exact same things they can do in the real world.
The lockdowns, which were a result of the global pandemic, pushed people to look more into the potential of the online world, and they discovered that they could still do business and have fun at the same time, using their devices from anywhere in the world.
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Many of the metaverses in existence today are powered by blockchain technology and, to transact on these virtual worlds, a user would need cryptocurrency or nonfungible tokens (NFTs).
A lot of the play-to-earn games we have today have their own metaverses with native cryptocurrencies that are used both for transactions and to receive in-game assets and rewards.
The play-to-earn gaming model embraces the idea of an open economy and financially rewards every user who adds value by playing and spending time in the gaming ecosystem. In the past, the perception about games was that they were just a way of having fun.
That perception is changing now as a new class of games are emerging. These games are not only fun, but they are also attractive investment opportunities. Speaking of investments, in recent times, the industry has seen big venture capital firms invest a lot of money into it.
As much as $9.6 billion was invested in the global gaming industry in the 18 months leading up to 2019, and 24 blockchain-based gaming companies have seen $476 million in investments in the first half of 2021 alone.
In recent times, play-to-earn games like Axie Infinity and The Sandbox have gained popularity, and one thing they have in common is their economic system.
Take the traditional game The Sims for example, where a player can buy in-game assets with the in-game currency, but the currency and assets have no real-world value. This is because there was no infrastructure for liquidity in the game.
Another traditional game, World of Warcraft, does have a marketplace where players can buy in-game assets and exchange characters, but it is very unorganised. Blockchain technology in combination with the play-to-earn model has solved all these issues.
How do play-to-earn games work?
To explain how play-to-earn games work, I’ll use Axie Infinity as an example. Axie Infinity is a Pokémon-inspired blockchain game created by Vietnamese developer Sky Mavis.
It currently has over a million active daily users, and what attracted this large number are the cute in-game creatures called Axies. Users can breed, buy and train these Axies.
The Axies are also used to carry out tasks and engage in battles. The goal of the game is to attain an in-game token called Smooth Love Potion (SLP). With SLP, players can breed their Axies, which gives them the advantage of earning more.
Another reason players want to earn as much SLP as they can is that SLP is a cryptocurrency that can be bought and sold on cryptocurrency exchanges. The best-performing players are said to be making up to 1,500 SLPs a day.
This is around $250 (because volatility causes the exchange rate to change constantly) at the time of writing. The Axie creatures themselves can be sold as NFTs on an open marketplace. Players can also sell in-game assets like real estate and flowers, among others, as NFTs.
So, in this play-to-earn economy of Axie Infinity, players get rewarded for their time by earning SLP, which can be sold on crypto exchanges, and by acquiring Axies and other in-game assets that can be sold in open marketplaces.
Other play-to-earn games
Aside from Axie Infinity, other play-to-earn games and platforms are set to launch, or have already launched, and I see the potential in them. I will be covering all the platforms which I will be testing and give exclusive reports right here!
List still to follow for the best upcoming play-to-earn games in 2022. Link provided to the article below!