GameFi is not a new concept, in fact, CryptoKitties was the first project to bring the concept to light in 2017. It is known for pioneering the play-to-earn gaming model, which is now the standard foundation that all blockchain games follow. , The model was a huge hit, bringing in the game 1.5 million users and $40 million in transaction volume. The fact that this was a significant achievement for the game during the early years of the crypto market.
Since then, the field has evolved in response to increasing user demands. Today, there are about 1,498 GameFi projects, the number of which is increasing by 99% year on year. For example, in 2022, investments in GameFi reached $3.7 billion, up from a total of $780 million in 2021. And with these expanding numbers, game revenue models have evolved as well. Projects are moving away from the original play-to-earn model and towards other models that guarantee long-term viability.
Let’s take a look at the different models and how they are benefiting the users.
play-to-earn
Play-to-earn (P2E) games enable players to earn monetary gains in the real world for playing the game. The model employs crypto and NFTs to power and monetize the in-game economy. While NFTs represent in-game items (such as avatars, outfits, etc.), cryptocurrencies are used to incentivize players. NFTs also give players full ownership of in-game assets, allowing them to profit from outside the game. Even every game action, including quests and challenges, is rewarded with a native in-game cryptocurrency.
In addition, P2E has many benefits, including the opportunity for users to earn money, own assets, and generate value for the community. There’s no better game than Axie Infinity to describe it. Axie is a Pokémon-style monster-fighting game in which players capture cartoon creatures known as Axes. Each Axe is an NFT with different skills and weaknesses, and players can adventure, combat, and breed their Axes through the game. As a reward for their efforts, players receive Smooth Love Potion (SLP) crypto tokens.
Although P2E games overcome many traditional gaming problems, they still have their limitations. The first is the model’s emphasis on earnings rather than gaming experience. This has led to inflation tokens, causing the game to collapse. Even gamers have given up on P2E games due to the huge entry cost.
play and earn
Play-and-earn is a game progression as compared to a play-to-earn model. It is an evolution of P2E that allows gamers to earn money and get ownership as well as get what they want. This model focuses on making games enjoyable and rewarding. Its design objective is for individuals to spend time playing and improving, competing and collaborating and creating a truly wonderful community.
In addition, it tackles P2E problems like user retention, rewards stability, and gameplay experience. For example, UniX Gaming employs a play-and-earn model that allows gamers to own, create, share, and chat. It empowers them to use their voice and resources to create a healthy gaming environment. Furthermore, UniX only focuses on developing AAA games with a sustainable incentive system.
In terms of playability, the model outperforms the P2E. However, there are some things that are still lacking. It does not allow ownership of in-game resources. This can result in decreased user retention and a disproportionate value proposition for gamers. Play-and-earn focuses on playability and may miss out on delivering additional utilities, which is the sole purpose of blockchain. However, a more sophisticated version known as Play-to-Own is on the rise, offering a solution to all Web3 gaming problems.
play-to-own
Play-to-own (also known as play-and-own) is a more thorough version of play-and-earn. The model focuses on allowing players to monetize their gameplay while converting them in-game to NFTs. It provides proof of ownership over the in-game objects they hold. For example, any digital item received by the player has real value because it can be sold in the market or in peer-to-peer trade. The ultimate advantage of this model over others is the creation of new income prospects along with increased retention and value proposition.
Life Beyond is an example of a blockchain-powered MMORPG that combines play-and-earn and play-to-own elements. It is currently in its first alpha stage. The basic gameplay revolves around players crafting items, weapons, and equipment, as well as gathering resources to fight enemies. Users earn the market currency, LBToken, as a reward for their in-game activities. In-game NFTs can be used by the creator of the game, DareWise, and its portfolio of future games. The game, however tempting it sounds, only time will tell if it lives up to its promises.
GameFi keeps evolving
GameFi is one of those areas that is constantly evolving. One reason for this may be the infancy of the technical infrastructure behind blockchain gaming. From play-to-earn games like Axi Infinity to play-and-earn games like UniX Gaming, the industry is evolving faster than ever. This post has covered much of it, as well as how some games are quick to implement the new innovative game revenue model. With games like Life Beyond adopting an advanced gaming model, the future of GameFi looks sustainable.