GameFi is not a new concept, in fact, CryptoKitties was the first project to bring this concept to light in 2017. It is known for pioneering the play-to-earn game model, which is now the basis standard that all blockchain games follow. . The model was a huge success, bringing the game 1.5 million users and $40 million in transaction volume. The fact that this happened in the early years of the crypto market was a significant achievement for the game.
Since then, the industry has evolved in response to growing user demands. Today there are approx. 1,498 GameFi projects, the number of which increases by 99% from year to year. In 2022, for example, investments in GameFi reached $3.7 billion, topping the 2021 total of $780 million. And with those growing numbers, gaming revenue models have evolved as well. Projects are moving away from the original play-to-earn model towards other models that guarantee long-term viability.
Let’s take a look at the different models and how they benefit users.
Play to win
Play-to-earn (P2E) games allow players to earn real monetary benefits by playing the game. The model uses crypto and NFTs to power and monetize the game economy. While NFTs represent elements of the game (like avatars, outfits, etc.), cryptocurrencies are used to incentivize players. NFTs also give players full ownership of in-game assets, allowing them to benefit from them outside of the game. Even every in-game action, including quests and challenges, is rewarded with native in-game cryptocurrency. .
In addition, P2E has various advantages, including the ability for users to earn money, own assets, and generate value for the community. There is no better game to describe this than Axie Infinity. Axie is a Pokémon-style monster battling game in which players capture cartoon creatures called Axies. Each Axie is an NFT with distinct skills and weaknesses, and players can adventure, battle, and level up their Axies as the game progresses. As a reward for their efforts, players receive Smooth Love Potion (SLP) crypto tokens .
Although P2E games overcome many traditional game problems, they still have limitations. The first is the model’s focus on gain rather than gaming experience. This has led to inflationary tokenomics, causing games to collapse. Even the high cost of entry has caused players to abandon P2E games.
Play and win
Play-and-earn is more of a game progression compared to the play-to-earn model. It’s an evolution of P2E that allows players to get what they want while earning money and acquiring ownership. This model aims to make games enjoyable and rewarding. Its design goal is to get people spending time playing and improving, competing and collaborating, and creating a truly amazing community.
Additionally, it tackles P2E issues such as user retention, rewards durability, and gaming experience. UniX Games, for example, uses a play and earn model that allows players to own, create, share, and discuss. This allows them to use their voices and resources to create a healthy gaming environment. Moreover, UniX only focuses on developing AAA games with a sustainable incentive system.
In terms of playability, the model greatly surpasses P2E. There are, however, a few things it still lacks. It does not allow ownership of game assets. This can lead to decreased user retention and an uneven value proposition for players. Play-and-earn focuses on playability and may fail to provide additional utilities, which is the sole purpose of the blockchain. However, a more refined version known as play-to-own is on the rise, offering solutions to all Web3 game problems.
play to own
Play-to-own (also known as Play-and-Own) is a deeper version of play-and-earn. The model aims to allow gamers to earn from their gameplay while converting the game to NFT. It provides proof of ownership over in-game items they own. For example, any digital item obtained by the player has a tangible value since it can be sold on a marketplace or in a peer-to-peer exchange. The ultimate advantage of this model over others is increased retention and value proposition, as well as the creation of new revenue opportunities.
life beyond is an example of a blockchain-based MMORPG that combines elements of gambling and earning and gambling to own. It is currently in its first Alpha phase. Core gameplay revolves around players crafting items, weapons, and equipment, as well as gathering resources to battle enemies. Users earn market currency, the LBToken, as a reward for their in-game activities. In-game NFTs can be redeemed by the game creator, To dare, and its portfolio of future games. The game, though, looks fascinating, only time will tell if it lives up to its promise.
GameFi continues to evolve
GameFi is one of those constantly evolving sectors. One of the reasons for this could be the infancy of the technological infrastructure behind blockchain gaming. Gambling games to win like Axie Infinity to play and win games like UniX Games, the industry is changing faster than ever. This article has covered most of it, as well as how quickly some games have implemented new innovative gaming revenue models. With games like life beyond adopting improved game models, the future of GameFi looks sustainable.