The blockchain gaming market has grown rapidly. The Polaris Market Research Blockchain Gaming Report shows that the total transaction volume for block
The blockchain gaming market has grown rapidly. The Polaris Market Research Blockchain Gaming Report shows that the total transaction volume for blockchain games reached $5.41 billion in 2022 and is expected to grow at a CAGR of 68.9% during their forecast period.
According to DappRadar x BGA Games Report 2022, Polygon’s emphasis on gaming and the metaverse led to a remarkable 338% UAW growth from the previous year, reaching an average of 97,384 daily UAWs. In 2022, Polygon’s popularity as a gaming chain soared, driven by successful game dApps like Arc8, Benji Bananas, Crazy Defense Heroes and Pegaxy.
As the industry evolves, there’s a paradigm shift from the traditional play-to-earn (P2E) model to a more sustainable and inclusive play-and-earn (PAE) approach. This shift is crucial to address the criticisms of P2E, ensuring enjoyable gaming experiences while maintaining financial rewards for players.
In this article, we will explore both models, compare them and discuss why the PAE model is essential for the long-term success of the Web3 gaming industry. We will delve into P2E and PAE models, comparing them and discussing the essential changes the industry must make for sustainable growth and long-term success.
The play-to-earn (P2E) model: A brief overview
The P2E model, enabling gamers to earn digital assets, has revolutionized the gaming industry. DappRadar reports that gaming accounts for nearly 50% of dApp on-chain activity. In 2022, daily unique active wallets (UAW) linked to game dApps surged by 60% year-over-year, with on-chain game transactions reaching 7.4 billion—a 37% annual increase and a 3,260% growth since 2020.
The P2E model revolves around players participating in games, completing tasks and receiving in-game rewards or cryptocurrency as compensation. With the advent of blockchain technology, games like Axie Infinity have popularized this model, attracting millions of users worldwide.
However, this model has its drawbacks. As the market grows, an increasing number of projects focus on the profit potential, creating games designed primarily for earning rewards rather than providing enjoyable gameplay experiences. Additionally, the P2E model can contribute to inflation, with some games experiencing token devaluation due to excessive rewards. This model has faced criticism for several reasons:
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- Unsustainable tokenomics: Rapid inflation and deflation of in-game tokens often lead to a lack of sustainability and short-lived games.
- Poor game quality: Many P2E games prioritize income generation over enjoyable gameplay, resulting in a subpar gaming experience.
- Wealth inequality: Wealthier players with more resources can dominate the game, creating disparities among players.
The play-and-earn (PAE) model
The PAE model, as I’ve advocated for previously, addresses the limitations of P2E by combining enjoyable gameplay with earning opportunities. The focus shifts from purely monetary incentives to a more balanced approach that prioritizes the user experience.
The PAE model combines the financial rewards of P2E gaming with engaging gameplay experiences, focusing on sustainability and attracting players for both the earning potential and enjoyable gaming experience. To successfully develop a P&E game, the following actions are recommended:
- Prioritize security and transparency: Implement robust security measures to protect player data and assets while maintaining transparency in the game’s tokenomics and governance.
- Establish partnerships: Collaborate with other game developers, content creator and platforms to expand the game’s reach and offer unique opportunities for cross-promotion and collaboration.
- Provide continuous updates and content: Regularly release new content, features and updates to keep the game fresh and maintain player interest over time.
- Educate players: Offer accessible resources and tutorials to help players understand the technology behind the game, making it easier for them to participate in the blockchain gaming ecosystem.
- Balance in-game economy: Regularly monitor and adjust the in-game economy to maintain a fair balance between supply and demand, ensuring stable token value and rewards.
- Offer diverse earning opportunities: Provide a variety of ways for players to earn, such as through in-game achievements, trading NFTs or participating in community events.
- Focus on storytelling: Develop an engaging storyline and lore to immerse players in the game world and create a deeper emotional connection with the gaming experience.
Comparing P2E and PAE models
- Sustainability: PAE prioritizes sustainable tokenomics and long-term growth, whereas P2E often suffers from rapid inflation and deflation of in-game tokens.
- Game quality: PAE emphasizes enjoyable gameplay, while P2E games frequently sacrifice…
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