A new generation of P2E games is here, and it's open to ever

[SeraphinGobbs]

Play-to-earn games were all the rage last year, but their economic model seems to fail. However, one Web3 game has found an innovative solution to make P2E sustainable.

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When Axie Infinity launched in 2018, play-to-earn gaming became a sensation. The game turned into a viable source of additional funds for numerous low-income families in the Philippines. However, as Axie Infinity grew and took over the global blockchain-gaming space, the rewards ratio quickly started dwindling.

The main reason for this significant cut in returns for players hides in the design of the game itself. One of the major challenges play-to-earn projects face is creating a self-sustainable in-game economy. Currently, most P2E games start out strong and offer lucrative rewards to players. However, increased in-game token issuing, as more players join, leads to significant value reductions. This, in turn, diminishes players’ earning potential.

And while the GameFi movement is still going strong, representing more than half of all activity in the blockchain industry, something needs to change for P2E to become sustainable in the long run.

Moving on from play-to-earn to play-and-earn
The play-to-earn movement spawned some of the most popular blockchain-based games like Axie Infinity, Alien Worlds, and Splinterlands. And while these have managed to stand the test of time, numerous projects did not have that path of success.

One of the key difficulties that play-to-earn projects face is the steep entry point, especially once a game becomes popular. At the height of popularity for Axie Infinity, the minimum investment required to purchase the starting team of three Axie NFTs was circling in the hundreds of dollars. Moreover, even players who could afford to buy the starting kit and enter the game saw dwindling returns, which were not enough to cover the initial investment.

In that sense, the play-to-earn approach is flawed in its initial premise. This is why game developers are now looking beyond play-to-earn and focusing more on the gaming aspect of their platforms. A new and improved approach is the play-and-earn concept, where gamers are not required to purchase starting kits, but simply enter a game and start playing. Of course, play-and-earn entails a different economic structure, which rewards players for certain milestones in the game rather than for participation like play-to-earn does.

Aside from simply shifting to a play-and-earn mechanic, new economic structures are also becoming more popular. One such example is the service economy approach introduced by farming game CropBytes.