Crypto corner: From pay-to-play to play-to-earn

For long-term gamers, the concept of levelling up an account until it has real-world value is nothing new. Many may remember the early days of MMORPGs, when accumulating gold, winning high-level items, or sufficiently levelling-up a character could generate real-world wealth for the account holder – albeit usually in flagrant violation of a game’s T&Cs – by selling their login details on a third-party marketplace like eBay.

But fast-forward a few years, and the development of blockchain technology (and associated cryptocurrencies) are helping developers and players alike realise in-game wealth as real-world value. Leveraging the blockchain, game studios can offer a means to recognise the skill and labour that players use to get ahead in games. Studios can offer custom tradable tokens matched to in-game items. This means that players who invest time and energy in finding rare items, generating currency or upskilling their avatar, can convert their hard -earned in-game riches to real-world wealth on a crypto asset exchange.

Tied to the rising popularity of interchangeable in-game and real-world value is the concept of play-to-earn games. Underpinned by blockchain technology, play-to-earn is 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.

Typically, games will launch and associate their own blockchain-based tokens that players can earn and redeem within a gaming title. These tokens can then be traded within a game’s marketplace to purchase new digital items or other rewards, or even transferred to cryptocurrency exchanges and traded for real-world traditional currency like dollars or pounds.

Time to collect

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 SLP tokens. When you fight monsters and complete tasks, you are rewarded with SLP crypto tokens, which can be resold via exchanges for fiat currencies or used to buy NFT assets. Some of these might make the game easier to players willing to pay, or simply carry enough cachet to be worth collecting for devoted fans of the game series.

In the context of the financial downturn, layoffs and rising cost of living being felt by many communities across the globe, we could see play-to-earn continue to grow, as many look for ways to supplement their income. In October 2022, Google searches for ‘side-hustle’ reached an all-time high. Blending time spent gaming as a hobby and the resale of valuable items could be for some the ultimate side-hustle –commercialising a hobby-based skill to the point of supplementing their income.

To this end, blockchain and cryptocurrencies 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. Whether you’re a believer that high-value in-game items are strictly to be earned or you’re willing to shell out for quick access to high-powered in-game weapons, GameFi could soon turn in-game worlds into all-too-real marketplaces.

Ramona Ciocea is head of business development at Protokol, a specialist Web3 development and consulting partner that delivers custom solutions, products and dApps to market. At Protokol she focuses on helping organisations and brands within gaming, sports, esports and luxury to unlock their Web3 potential.