Play-to-earn was a bust — we need to create-to-earn

Players care more about playing a high-quality game than they do about earning money: The shine wears off

article-image

Midjourney modified by Blockworks

share

Play-to-earn gaming wasn’t fun while it lasted. 

Incentivizing players to earn digital assets in games with little regard for gameplay quality or player needs left a bad taste in everyone’s mouths. 

After 1.13 million unique active wallets connected to decentralized applications in games in 2022, research suggested that the GameFi industry could reach $38 billion by 2028, as hordes were swept away in the hysteria of “getting paid to play the games you love.”

But they didn’t love the games, did they? The quality wasn’t there. Players were stuck in a mining loop, grinding out the value of characters whilst reliant on a Ponzi scheme that required a constant flow of new players to substantiate any accrued value.

The term “play-to-earn” (P2E) also created a veil of ownership, of which there was none actually involved. Rich NFT owners and the platforms themselves exploited low-earning players who were hyper-dependent on the in-game tokenomics, and who weren’t always able to extract or transfer any sovereign value.

Yet the Blockchain Gaming Alliance suggests that even with the implementation of sophisticated tokenomics that truly serves players, P2E games would’ve ultimately failed. 

Players care more about playing a high-quality game than they do about earning money: The shine wears off. A game’s success is always parallel to its level of quality.

Now, after the P2E bubble, it is likely that we still start to see mutually beneficial, innovative in-game creator ecosystems instead — games with creative expression and sovereignty serving as bonus layers. Queue the rise of Create2Own.

The emergence of “Create2Own”

Players have been creating in-game items long before Web3, of course. 

Games like Minecraft, and more recently, Roblox, are obviously very popular. But the same ownership issues arise. Users spend hundreds of hours making the game profitable by creating levels, assets and in-game environments that drive engagement, with only the studio benefitting from owning the IP. 

Fortnite’s registered player count has consistently risen through the hundreds of millions over the years, and this year they have continued to drive interest from players who thrive on content creation. 

But the same issue with player ownership crops up — players don’t own or benefit from what they make. 

“Earning” is based on a digital sharecropping model through which players receive a cut of accrued value for their own creations, with the platform itself taking the lion’s share. Epic Games only places 40% of net revenue from Fornite’s item shop into an engagement pool, from which creators receive monthly payments dependent on engagement. The rest (60%) goes to the studio, despite the creator doing most of the work. 

Sovereign ownership is not a new concept, but there seems to be a delay, or resistance, to full integration within the gaming industry.

Before, I’d get bored of a Playstation game and go down to Gamestop and trade it in: I’d receive $15 and spend it on buying a new game; Gamestop would sell my old game for $20. In the last 10 years, we’ve shifted from physical disks to downloadable premium — and are required to keep purchasing content from overarching publishers if we want to play with friends. So when the unfamiliar concept of NFTs comes along as a way to improve gameplay, all I see is a cartoon monkey whose value has crashed 500% — naturally, I’m skeptical of their usefulness.

Read more from our op-ed section: No, it’s not okay to physically assault NFT critics (even if it’s just a slap)

But there is real potential for power to be transferred to the player. A marketplace that enables the sovereign, decentralized ownership player-to-player trading of utility-backed items would, quite literally, change the game. This could be supported by the development of in-game marketplaces that enable cut-price, one-time trade-offs with the studio (not just other players), where users can exchange all of their accrued value for cryptocurrency. The game itself can bring new players in by offering bundles out of these items that were uniquely created and traded.

Both sides win: The player has created items that they’ve used in the game and recorded on blockchain, which can be leveraged. Say a major streamer won a huge battle with a certain sword — the record of win will add value to the sword. The game attracts more users with the evidence of what’s on offer, creatively and economically, through the fruits of another player’s labor. Value is equally distributed. Eventually, players might be able to bridge their asset into another game using blockchain, which opens the door to collaboration and interoperability between titles and their fanbases.

First things first

Before the inevitable boom in popularity of self-ownership truly takes hold, players need to be empowered to create in-game items that they truly own.

AAA studios must be smart enough to prioritize the development and integration of cutting-edge creator tools and initiatives that maximize the potential of Web3 technology — before touting the standard blockchain sell-in of economic liberation.

Read more from our op-ed section: There’s nothing wrong with Web3 gaming, except everything you’re doing

When it comes to providing Web3-backed creator tools, the industry is still in its infancy. The main barrier to integration is the persisting tendency for studios to overcomplicate. Creator tools need to be quick and easy to use, with as little emphasis on the backending blockchain technology as possible.

There should be no pressure and no promised incentive constantly being pushed onto players in the way that we saw with play-to-earn. 

For Create2Own to truly revolutionize, studios must let components of verification, traceability, trusted exchange and genuine rewards be the organic byproduct, remaining anchored to their core purpose of developing a AAA-game. The transition of the player into creator — and owner — will then become seamless if they get it right.



Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

BUZZ holds shares of Coinbase, Robinhood and MicroStrategy

article-image

Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

article-image

DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit