State of Play-to-Earn: Thoughts and Facts

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avatar of @muratkbesiroglu
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3 months ago - 4 minutes read


The interest in play-to-earn games increased rapidly in the second half of 2021 and reached the summit in January 2022. During the year 2022, prices declined. The prices of play-to-earn coins are still around one-to-twenty to ATH levels. Is it time to invest in play-to-earn coins and NFTs? Although prices are parallel with the general crypto market, there may be digital assets that will provide a better return than the average. First, I want to discuss the theoretical aspect of the issue.

Thoughts About Play-to-Earn Games

Where does the gain we hope to get from play-to-earn games come from? What is the benefit of NFT based web3 games to the world? Since these are games, we expect them to entertain us. In addition, the name of the play-to-earn category points to the fact that we will earn a game while playing games. Is it possible to make money by playing games? We can't answer this question "yes." My personal experience has shown that it is necessary to make some investments to make money. Then why should we direct our savings to play-to-earn games instead of evaluating in DEFI applications? Yes, we like to play games, and in the meantime, we are happy if we can make some money.

To play first-class games, we need to buy them first. And when we get bored with the game, we have nothing left. However, we have digital assets when we use this amount to buy NFT in a play-to-earn game. In fact, during the bull seasons, the value of these digital assets is increasing, and we feel smarter. However, the opposite situation can occur. Since play-to-earn games are not perpetual machines, how do they ensure the continuity of the awards they distribute? Because this hypothetical machine does not work with a hundred percent efficiency. Spending needs to be done to develop the game and ensure its continuity. So play-to-earn ecosystems need to grow continuously to be sustainable.

We can read the play-to-earn economy through the city analogy. In the last hundred years, all those who invest in Istanbul have been profitable. And Istanbul has grown constantly. In the meantime, we damaged the ecology of the city. Fortunately, growth in digital economies only occurs based on nonphysical resources. As the metropolises grow, the infrastructures become more efficient, and innovation increases. Thus, house, workplace, and land prices are increasing. Can the same apply to Play-to-Earn ecosystems? Yes, maybe. Provided that the infrastructures that make up the ecosystem are continuously developing.

People playing the play-to-earn game contribute to user statistics. As the number of players increases, the value of the game increases in the eyes of potential investors. Therefore, incentives can be used. Because in countries with low income, even a few cents make a difference in people's lives. On the other hand, incentives distributed boldly may damage the sustainability of the ecosystem.

One of the valuable aspects of web3 games is that it promotes savings. While buying traditional games is not a waste, NFTs purchased in the web3 game are investments. At this point, the problem of financial literacy comes into play. It is necessary to choose the appropriate digital assets for a suitable investment and to invest at the right time. Web3 games encourage players to acquire financial information.

The first big wave of play-to-earn games appeared in the bull season. Even the most novice hunter can feed his belly in an environment with plenty of food. When the prices began to decline, some problems came to light. High development costs, the process costs required by the game, the decrease in resources due to excessive incentives, and the panic sales made by inexperienced investors were the main problems. In addition, with the decline in prices, the quality of the games began to be questioned more.

User Stats of Play-to-Earn Games

According to Dappradar statistics, preferred play-to-earn games are Alien Worlds, Splinterlands, Farmer World, and Planet IX. Alien Worlds and Planet IX are sci-fi, Splinterlands' fantasy-themed games. On the other hand, Axie Infinity, one of the first examples of the category, continues to lead in terms of trading volume. However, the statistics shown in the white line below show the situation of the category.


Axie Infinity, which exceeded 500k active wallets per day in January 2022, had 11k users yesterday. The following graph shows the resiliency of Splinterlands to the bear market.


During the peak of interest, Splinterlands and Axie Infinity reached approximately 500k users. On the other hand, as of yesterday, we see that Splinterlands has six times more active players than Axie Infinity.


The above statistics show the effect of fund flows on web3 games. When the financial incentives go to the minimum level, the pleasure promises of the game become decisive.

The future of the play-to-earn concept is bright. There is fierce competition between web3 games; some will become a brand, like Istanbul or Star Wars. Those who invest in these ecosystems will obtain high returns. Let's hope we will be among those investors.

Thank you for reading.

*Image Source: Midjourney App

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