Alexis Onahian co-founder of Reddit, is clear. For him, in five years, “90% of people will not play a video game unless that time is properly valued.” His prediction is one that shakes the foundations of the gaming world, and according to him it will come true in the next five years.
This entrepreneur firmly believes in the model “Play-to-Earn“, a paradigm in which many players will no longer play for the joy of playing: they will play for money, and more specifically for cryptocurrencies. It is another of the many revolutions in the crypto world, and one that has some important side effects.
Gaming 3.0: what is the Play-to-Earn model
Last summer we were already talking about ‘Axie Infinity’, a benchmark in this new way of understanding the world of video games. The evolution of this juicy segment has been singular. Until not long ago, what we could describe as Gaming 1.0 prevailed: players played for the sake of playing, for the sheer pleasure of enjoying.
Then came the Gaming 2.0: the phenomenon of Freemium games. Players could download and play a game completely free of charge, but if they wanted to enjoy all the game options —new weapons, clothes, items— or move faster, they had to pay for it —long live the ‘pay to win’ — and buy items in that game. Fortnite is a good example of those mechanics.
That is the prevailing model until now. It has made mobile games, for example, achieve spectacular income, and they have become an absolute success in those video games that manage to succeed. And yet, there are those who believe that this model’s days are numbered.
What will come next will be something like the Gaming 3.0: the Play-to-Earn phenomenon. A model according to which players can earn money in the form of cryptocurrencies or also tokens and NFTs when they play. Not only will they not have to pay to play, companies will pay them to do so. This is what will happen in the next five years according to Alexis Ohanian, co-founder of Reddit.
This entrepreneur stated in a recent episode of the podcast “The Room Where it Happens” that paying to play will in many cases be an anachronism:
“Five years from now you will really value your time properly. Instead of being harvested for advertisements, or being fleeced and spending [montones de] dollars to buy stupid hammers you don’t have, you’ll be playing some equivalent game on the chain that will be just as fun, but you’ll really gain value and be the one to reap [ingresos]”.
Welcome to the crypto economy of attention
How is that possible? So how do companies make money? The easiest way to understand it is with the aforementioned example. In ‘Axie Infinity’ players raise their little pets —which are NFTs, like the famous crypto-kittens— and make them fight with other characters: you can earn money by feeding and raising them or by winning those battles with other pets.
The fall of all cryptocurrencies has especially impacted Axie Infinity’s AXS cryptocurrency. Its value once was $157, but is now around $10. Source: CoinMarketCap.
The trick is that each of those pets costs a lot of money. The game is free to play and you can indeed win money, but the barrier to entry is high. The model works: the token of this particular metaverse of Axie, called AXS, grew dramatically last fall, and although its value in recent months has fallen to half of those maximums, analysts believe that it will grow again significantly. remarkable.
The Play-to-Earn model has other important differences from the current model. Imagine that you spend hundreds of hours playing a video game like Fortnite: you will have ended up investing money to equip your character with clothes, new weapons or new abilities. All great until you realize that if the game drops or disappears, all that collection of items and abilities will be lost forever: is not transferable.
The player is at the mercy of what the developers and distributors decide.
Show me the dough.
With the Play-to-Earn model, the games put the player at the center of their economic (or rather, crypto-economic) engine. Players own those digital assets —like NFTs— and they can exchange them for money, for other NFTs or collect them and hope that over time they will increase in value – although obviously they can also decrease in value or go to zero.
There are other theoretical advantages: in games based on the chain of blocks there is a decentralization that should mean that even the players can end up having decision-making power when it comes to shaping the future of those video games. In the end it is a model in which the distribution of income is theoretically much more distributed. The game rewards you for your time, for the attention you give it, and that has interesting implications.
Activision Blizzard sold for $70b today and the community is going to see $0 from this
Play-to-earn couldn’t come sooner.
— GREG ISENBERG (@gregisenberg) January 18, 2022
Greg Isenberg, an analyst and adviser at Reddit —he is the host of the podcast in which Ohanian was interviewed—, explained, for example, how the recent multi-million dollar agreement between Microsoft and Activision Blizzard had made the 70,000 million of dollars simply passed from one hand to the other without the users having seen any benefit.
People who play games are rewarded. Constantly.
P2E is a job. I play games to not work.
This is such a disappointing future.
— John Dietrich (@ampyourgrowth) January 18, 2022
For him that was unfair, because after all Activision Blizzard wouldn’t be where it is without the users —Microsoft neither, of course. In that speech there is an important reply made by a Twitter user: “People who play video games are rewarded. Constantly. P2E [Play-to-Earn] it’s a job. I play video games so I don’t work. What a disappointing future that is.”
His argument was valid and of course he posits a future in which playing could end up becoming a job: you would no longer play for the mere fact of enjoying yourself, but pursuing an economic objective, as happens with work. It will be interesting to see where this all ends, but certainly the Play-to-Earn model seems like a plausible alternative if cryptocurrencies, blockchains and all things “crypto” end up taking hold in this and other segments.
That has not happened at the moment, and the fall suffered by cryptocurrencies since the end of 2021 has caused many to lose a good part of their value. Axie Infinity’s AXS token is no exception, and in fact since those highs of almost $160 at that time Now it’s around 10 dollars. The drop in players has been enormous and demand has also been greatly reduced, but it remains to be seen what happens if the crypto scene picks up again.
