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Play to Earn
4 minute read · Issue Number 114 · April 1st, 2022
Happy April Fools’ Day!
Here’s a meme to light up your Friday:
One cool feature of blockchain technology and digital collectibles is that it enables video games and marketplaces to mix with digital assets to create new play dynamics, business models, and revenue opportunities.
For example, through a new concept called ‘play-to-earn,’ you can now literally get paid for playing a video game.
Grab a cup of coffee while I explain to you play-to-earn in less than 3 minutes.
Play to Earn
Video games keep their users engaged by rewarding players with virtual achievements that award them with feelings of triumph and satisfaction. Dopamine releases and other chemicals in the brain improve mood and even happiness from those achievements.
Levels, obstacles, tokens, trophies, and competitions are all forms of virtual achievements that accomplish the mission. It’s a cool strategy based on human psychology.
There’s a limited utility to that system – the achievements and awards you won will stay in your console/app once you finish playing.
Imagine if the awards won in the virtual world could have value in the real world.
Meaning now you can play for the opportunity to acquire digital tokens that are tradable for real money in a marketplace.
In a nutshell, that’s one of the things that NFTs can do.
Alternatively, gamers can accumulate ownership through some cryptocurrency of the game with real monetary value – like having a stock of your favorite company.
Think about it; it’s like if Google would pay you .00001 Google stocks every time you use their search bar, compensating you for being a fellow user.
But why would they do that?
Essentially, because this new economy flips the business model – through playing the game, users create value for other players, the platform, and the developers. It empowers the users instead of using them as the product. It creates community. In return, they get compensated.
But what about the tracing, verification, transparency, and security of such a system? All of it is allowed by the blockchain.
Some games require players to buy NFTs or pay a direct ‘entry fee’ to play, but there’s always a cost to play games, not always strictly monetary.
Sorare allows you to earn cards in weekly competitions through their fantasy sports game, but you first need to buy some NFTs to play. Axie lets you play the game only after purchasing the characters you’ll use in-game.
In the past, gamers bought games, played them countless hours, won some awards, moved on.
Play-to-earn changes this – it empowers players and creates communities.
Now, achievements get a particular value, represent ownership, and can be exchanged for money when players step away from a game.
New technology enables fascinating stuff, and video games might be just the beginning.
Think about training, building, or even learning to earn – just an immense space of opportunity for new dynamics and business models unlocked through innovation.
🔗 Learn more
Halftime Snacks Podcast episode with Joe De Pinto – more on play to earn, the ILP (Instant Leaderboard Payout) system, and the role of microtransactions on the internet.
How Players Are Making a Living With NFTs – “in countries like the Philippines and Indonesia, people are even playing Axie to support their families”
Why play-to-earn games are the key to the marketing and monetization challenge – “We provide a platform with the infrastructure, and we have them do everything else around it, giving them a lot more power,”
🎙 Halftime Snacks Podcast
Dinesh is the founder & CEO of Trident Strategy – a consultancy firm that provides commercial and legal advisory to clients worldwide in several areas in sports related to sponsorships, investments, rights, and E-sports.
In this conversation, we discussed Trident’s operations and types of clients in sports, trends related to investments and technology, the back-end of sports operations, and much more.
Apply to be a guest on the Halftime Snacks Podcast here.