The concept of play-to-earn in gaming was popularized by a game called Axie Infinity. Released in 2018 by Sky Mavis, Axie Infinity is not only one of the most popular blockchain games but also a social network, earning platform, and marketplace—all in one.
Axie Infinity became extremely popular in 2021 when many people invested in it. The game has more than 90,000 monthly users and is among the top 15 blockchain games, according to DappRadar. It was popular mainly because of its fun and addictive gameplay, coupled with a play-to-earn (P2E) system.
Impact on Third World Economies
Axie Infinity’s P2E model significantly impacted third-world economies, particularly in Southeast Asia.
In the Philippines, for instance, many players turned to the game to earn a living after the COVID-19 pandemic cost them their jobs. One player named Ijon Inton claimed to make as much as P10,000 per week from playing the game.
Tokenomics and the Downfall of Play-to-Earn
Despite the initial success, the play-to-earn model faced significant challenges due to issues with tokenomics. The model was highly inflationary, which made it unsustainable in the long run.
The tokens associated with these games were being minted rapidly, leading to hyperinflation. This inflation diluted the tokens’ value, causing players’ earnings to shrink over time. As a result, many players who were playing primarily for the rewards left.
The Revival with the Metaverse
The downturn of the play-to-earn model was not its demise. The advent of the metaverse breathed new life into Web3 gaming. As per Meta CEO Mark Zuckerberg’s vision, the metaverse is a virtual realm where individuals can engage in gaming, work, and social interactions, often facilitated by VR headsets.
At that time, the metaverse was anticipated (by the Web3 community) to decentralize the gaming industry by enabling players to have digital identities, assets, and ownership.
Facebook’s transformation into Meta in 2021 was a pivotal moment in the evolution of the metaverse. Mark Zuckerberg associated the new brand name with his strategic blueprint for creating a metaverse.
This transition ushered in a new era in the digital world, attracting significant interest from venture capitalists, celebrities, and retail investors to crypto projects that resonated with this vision.
One project that benefited from this shift was The Sandbox, a decentralized metaverse built on the Ethereum blockchain. It allows users to create, own, and monetize their gaming experiences.
Following Meta’s announcement, The Sandbox saw an upsurge in interest and recognition. An endorsement from the acclaimed rapper Snoop Dogg further magnified this effect.
Collaborating with The Sandbox, Snoop Dogg set up his virtual mansion and NFT collection within their metaverse, hosting live concerts and engaging with players. This alliance enhanced The Sandbox’s visibility and highlighted the potential of decentralized metaverses as a novel platform for interaction, entertainment, and economic activity.
The current state of play-to-earn and metaverse tokens
Despite the initial excitement, the performance of tokens associated with play-to-earn and the metaverse has recently been underwhelming.
The enthusiasm around these tokens has subsided, and their value has diminished. It could be attributed to several factors:
- A lack of innovation from the crypto projects.
- An absence of exciting developments that could attract investor money.
- The failure of other crypto projects to fulfill their promises to players and investors (with numerous trailers but no actual game launches).
Conclusion
Not all projects have seen a decline. Those who innovate and deliver on their promises, such as SuperverseDAO, formerly Superfarm, still perform well, demonstrating that success in this space is possible with the right approach.
This success underscores the importance of innovation and the fulfillment of promises in maintaining investor interest and market performance.