Cryptocurrency crash sparks fears about the future of “play and earn” How will the future develop?

Axie Infinity earned $988,400 last week, marking the first time since February 2021 that the game’s weekly revenue has fallen below $1 million. In the week of August 8, 2021, Axie Infinity’s revenue hit a peak of over $215 million. Starting from November 2021, due to the unbalanced issuance and destruction mechanism of Axie’s in-game tokens, the devaluation of tokens inhibited players from continuing to The enthusiasm for using the game, therefore, has led to a steady decline in Axie Infinity’s revenue.

Despite being dubbed by some as the future of gaming, play-to-earn (P2E) faces a difficult dilemma. As the crypto markets turmoil, Bitcoin and Ethereum fell sharply, and tokens that support play and earn games took a hit – Polygon token fell from $1 to $0.5, and Axie Infinity token fell from about $30 to $20 , the Smooth Love Potion token fell below 1 cent for the first time.


Before we dive into it, it’s worth explaining how earning games work, how they work, and why they’re so important.

At its core, P2E gaming is about incentivizing players by linking playtime and effort to potential rewards—collectible items, usually some form of NFTs, tied to cryptocurrencies that can be resold for real-world currency. Through the game, players can not only earn income randomly, but also clone, breed or create new valuable collectibles in some games, such as Axie Infinity. These games are wildly popular in parts of Asia, such as the Philippines, where it is emerging as an emerging profession in helping people escape poverty.

Over the past two years, investors have viewed the gaming space as an opportunity, believing that P2E gaming will be the next big thing.

Some believe that P2E games will replace the free-to-play (F2P) model, which has seen the rise of games ranging from League of Legends to Fortnite. According to DappRadar, in the first quarter of 2022 alone, venture capitalists invested more than $2.5 billion in studios and publishers to build play earning games and Metaverse platforms.

Cryptocurrencies are highly volatile. As such, earning revenue from games is gaining traction, and it will continue to ebb and flow until the cryptocurrency industry takes hold.

Playing the earning game is risky

Legal experts have warned that there is no safety net for players who effectively invest in risky assets, leaving them vulnerable if projects fail or asset markets dry up.

As regulators around the world seek to control cryptocurrencies themselves, few regulate the relatively niche offshoots of NFTs or P2E games, which often use in-game crypto tokens that can then be cashed out for traditional currencies.

“Storing any value in a project like this is risky,” said David Lee, a cryptocurrency associate at London-based law firm Fladgate. “The benefits of blockchain-based games are often achieved through rewards paid in the project’s native token. .”

There is no guarantee of the value of tokens or in-game assets, as their value is usually determined by market supply and demand. This means that prices can fluctuate wildly, and if projects become less popular or abandoned, the assets have the potential to become worthless.

However, advocates of these games say success is built on a combination of skills, strategy and luck.


Last year, Axie Infinity was touted as one of the top candidates for mainstream blockchain adoption. Launched in 2018 by Vietnamese developer Sky Mavis, the game is a huge hit in the cryptocurrency world. It offers some players the prospect of full-time jobs, and Sky Mavis is valued at $3 billion after a $152 million funding round led by Andreessen Horowitz. Axie Infinity should herald a new era of play and earn games built around crypto.

A year later, Axie’s future looks even more bumpy.

Sky Mavis’ Ronin blockchain suffered a catastrophic hack that lost over $600 million at the hands of unidentified hackers and left players’ funds in limbo as Sky Mavis froze Ronin transactions. Even before that, Sky Mavis faced bigger questions about its long-term sustainability. The game world of Axie Infinity combines the freewheeling cryptocurrency market with the complex economics of massively multiplayer games. And, as it tries to reinvent itself with a new free-to-play game, the situation gives us a glimpse of what happens when the hype reaches its limit.

The future road of playing and earning games

Does Axie Infinity’s leading success in the market (gross revenue of $781.6 million in Q3 2021 and its token price hitting an all-time high of $155 by the end of 2021) now looks threatened after the hack? In fact, its user engagement (measured by daily active users) has dropped 40% from its November peak. Taken together, does this mean that the hype surrounding this nascent industry is overblown?

Some of the major barriers to adoption include the slow speed of Ethereum used by crypto gaming platforms, the high cost of purchasing NFTs due to Ethereum’s high gas fees, not to mention its environmental impact. But perhaps more telling from a growth perspective is that few big game developers have ventured into the space. A key hurdle is the critical monetization nature of the innovative game model itself: moving from a model where 100% of in-game economic sales go to developers to a model where the player community earns a larger percentage of transaction volume is hard to swallow. In other words, this means that in a decentralized ecosystem, developers have less control over the in-game economy.


Rasa Petuch, head of growth at Block Games, said in an interview that in order for the gaming industry to develop, there needs to be an influx of regular gamers, and at present users are mainly for making money rather than playing games, while developers focus on games Token economics rather than the game itself. “Traditional gamers haven’t been around yet, because on the one hand, games haven’t been around yet, and a lot of legacy gamers are skeptical,” Petuch said.

She believes that earning games will really change when really good and fun games emerge in the industry. “That’s one point I’ve been thinking about, and the other point is about console games ,” she said. “They’re not ready for blockchain, and they’re an important part of the entire gaming industry.”

During Electronic Arts’ recent earnings call, CEO Andrew Wilson said that while the NFT and gaming monetization market is still in its early stages, it does point to the future of gaming. “In a way, there’s a lot of hype. But I do think it’s going to be a big part of the future of our industry,” Wilson said.

Anndy Lian, chairman of BigONE Exchange, said that although the overall market for NFTs is slowing compared to 2021, the level of demand is still growing. NFT sales topped $4 billion in February. Lian said, “I believe there is a lot of growth potential for P2E games. Now is the time to adjust to the dominance of the big game studios and console manufacturers. Play and earn is not only good for gamers, but also good for players who want to play in new ways. So will future developers competing on a more level playing field.”

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