For this blog, we spoke with Jure Grahek, who, aside from working professionally in the crypto world for many years, is the Head of Strategic Initiatives at gaming fintech payments service provider ZEBEDEE. Like us, they provide consumer-facing apps and games where players can earn rewards.
Anyway, where are play-and-earn games going in 2023? Let’s dive in.
What are P2E games?
P2E, or “play-to-earn” games, are games in which players can earn real-world value. This value can take the form of in-game items, virtual currency, or other digital assets that can be converted into real money.
P2E games are becoming increasingly popular for several reasons. One of the main drivers is the rise of blockchain technology. This technology, in particular, creates unique digital assets that can be bought, sold, and traded on the open market, making them valuable to players in a way that traditional in-game items or in-game currency can’t match.
Another reason P2E games are becoming popular is that they allow players to earn real-world value from their time spent gaming. On top of that, and with the continued rise of mobile gaming, people can now play anytime and anywhere. And with the ever-growing popularity of online multiplayer games, the social aspect of gaming has become more prominent, which many people enjoy.
However, under the P2E umbrella come various gaming genres. Web3 gaming and crypto or NFT-based games stand out in this category, as well as justDice’s fresh ‘honest’ play-and-earn approach, but more on that later.
However, the definition of these genres can become cloudy, especially after throwing blockchain into the mix. Let’s break them down.
Blockchain, Web3, and NFT-based Games Explained
These terms have collectively confused each other’s definitions, so we’ve dissected them.
What are Blockchain Games?
Blockchain often gets bundled as a gaming genre, but that’s not the case. “Blockchain gaming is an umbrella term for games that leverage blockchain technology, but I’m not a fan of the term, as the actual blockchain has little to do with it. Blockchain is a database useful for building decentralised systems requiring minimal counterparty trust”, explains Jure.
What are Web3 Games?
Conversely, web3 gaming refers to a new generation of online games built on decentralised, blockchain-based technologies like Ethereum. These games use self-executing smart contracts to create decentralised, player-owned virtual worlds and economies. This allows for true ownership of in-game assets, where players can own and control the items they acquire in the game rather than just having the developer’s permission to use them.
What Are NFT-Based Games?
“NFT-based games use NFTs as a key part of the gameplay experience and monetisation. These games also often require players to pay in by buying an NFT before accessing key parts of gameplay,” Jure explains.
NFT games are popular with players interested in collecting and trading unique digital items. Some NFT games also offer a chance to win rare items, which can be sold for a significant profit, further incentivising players.
At this point, integrating crypto or NFTs in games isn’t without its challenges or controversy. While these games can also be more complex and require particular technical knowledge, those unfamiliar with the terms are hesitant to jump in. Why? Let’s see.
The Downfall of P2E
The most significant issues facing web3 and NFT-based now are that 41% of gamers aren’t sure how they’d work, 36% don’t have a crypto account or wallet, and 33% cited they’re hesitant to play due to the likelihood of being scammed, according to a Coda Labs study.
The reason why web3 games are booming now is that people want to get in early in the hope of becoming a millionaire, meaning these games are predominantly played by those chasing a profit. And with profit being the main driving force, these games aren’t overly appealing to your everyday gamer, stunting growth.
“Instead of enriching the gameplay experience, earning is the game’s main focus. The form of money or asset earned is highly volatile, with the expectation of large upside potential (meaning small-cap crypto tokens or NFTs). This makes the experience more akin to speculative trading than playing for fun. And as someone with multiple years of professional experience in the crypto exchange space, let me tell you – in speculative trading, only the professionals profit. Everyone else is cannon fodder. When prices inevitably stop appreciating, most people are left holding worthless bags. That’s why the crypto world has a term for these assets. They’re called shitcoins,” states Jure.
On the surface, the games look eye-catching and enticing. After downloading it, users are often bombarded with wallets and complex phrases and terms that someone new (a non-crypto native) would find confusing.
What’s more, time and investment are heavy with web3 games. Organising crypto wallets and then fronting the sometimes sizeable financial investment is time-consuming and, as with most investment opportunities, includes some risk.
Jure adds to the risky element by saying, “crypto is cyclical, and the cycle of hype around play and earn and NFT gaming without strong fundamentals is over. It’ll drag on for a while, but it’s not coming back. Same as ICOs in the last crypto cycle. If you got in at the right time, I hope you cashed out appropriately and got rich. If you didn’t, don’t keep your hopes up.”
It would be naive to think that all crypto/NFT-based games are like that. But the combination of untrustworthy, social media-hyped buzzwords and poor, non-user-friendly games coupled with a lack of education for those unfamiliar with the space is stalling growth and effectively harming the genre’s hopes for the future.
justDice’s Honest Play-And-Earn Approach
Our products adopt a simple twist to the play-to-earn genre, and we call it the honest play-and-earn approach.
Our rewards come from advertising and do not require a future investor to purchase digital assets at a higher cost. Users enjoy playing fun, engaging games while earning safely and not risking personal funds.
In our case, coins earned from our apps and games are converted into real cash or vouchers. And it’s important to note that we don’t advertise that players using our products can or will become rich. They download and play our games and apps for free because they enjoy gaming, but with the bonus of earning extra pocket money.
“The point of implementing play and earn mechanics should always be to enrich the gameplay experience. Having real-money rewards in a game, or implementing economic mechanics around digital items with real-world value, can make the experience of playing much more rewarding. Not because you’re getting rich but because the psychology of that little reward is very powerful. When used correctly, it can create a very engaging experience that makes games better, even if the money is hardly enough to get a cup of coffee and far from “live from playing” territory”, agrees Jure.
Where 2023 Puts Us
Finally, P2E games are, without a doubt, going to boom next year. But with the continued confusion and unpredictability of the NFT and crypto world, we strive to offer gamers a fun, safe alternative with our honest play-and-earn games.
ZEBEDEE’s taking a similar approach, with Jure mentioning, “play and earn in various forms will continue to be a major trend. But I believe companies like justDice and ZEBEDEE, which focus on a more honest and realistic approach, will remain, while companies focused on assets with volatile value (which always leads to speculative behaviour) will disappear.”
Ultimately, the future’s bright if you’re happy playing fun, engaging games while earning some side pocket money. Not just from a player’s perspective but also from a business point of view. These small rewards see considerable improvements in retention and monetisation across our products, and we can’t wait to see what 2023 has in store for us.