Play-to-Earn Business Model

Play-to-Earn Business Model

Free-to-Play Is the Basis

Consumers need to purchase the right to play a premium game. They do this by buying a license from a digital store or a physical copy from an online or local shop. The financial commitment is pretty steep as it’s not uncommon to pay 60 dollars for a newly released game. Even though this is still a huge industry, the free-to-play business model has seen the most growth in recent years.

The free-to-play business model allows gamers to get a game completely free without any financial commitment. Free-to-play or freemium games are always downloadable and give consumers a limited/constrained experience. Gamers will need to pay to speed up their progress or to obtain special items. For example, users need to pay for in-game currencies, extra content, or special cosmetics for their game characters.

Some of the biggest games on the market are actually available for free. Last year, Fortnite alone was responsible for 1.8 billion dollars in revenue, even though the battle royale game is completely free. Selling cosmetics to allow more personalized customization is big business. Among the biggest games on the market are titles like League of Legends and Hearthstone, which are basically all available for free. However, each developer has its own ways to make users pay for additional content or cosmetics.

These free games have made billions of dollars in revenue, and there’s no stopping them. This just shows that the free-to-play business model has matured, and developers have learned the art of free-to-play monetization.

The play-to-earn business model has many similarities with the free-to-play one. Often a play-to-earn game also uses mechanics seen in free-to-play titles. However, play-to-earn games also allow gamers to make money or earn valuable digital assets

Thanks to blockchain technology and the advantages of the crypto market, the Play-to-Earn model has now been improved in the following areas.

• Gaming operators have incorporated NFT in their protocol.
• Improve ownership of in-game assets for users.
• Players are creating value for other players and developers. In return, they are rewarded with in-game assets (native tokens/NFTs).

Explaining Play-to-Earn

Giving gamers ownership over in-game assets and allowing them to increase their value by actively playing the game are key components of the play-to-earn business model. By participating in the in-game economy, players are creating value for other players and developers. In turn, they are rewarded with in-game assets. These digital assets can be anything ranging from cryptocurrencies to in-game resources that are tokenized on the blockchain. That’s why the play-to-earn business model goes very well together with blockchain games.

In the play-to-earn business model, the game and the developers reward players for putting time and effort into their game. For example, in Axie Infinity, players earn Small Love Potions (SLP). Players need these tokens to breed new Axies, but they can also sell the tokens to other players on the open marketplace.

Acquire Value to Participate

Play-to-earn games should be free-to-play as well. However, that’s not always the case. Developing a video game costs money, and these games are created by businesses. However, the benefit of the play-to-earn business model is that a gamer always creates some value that can be sold. Even when a gamer needs to pay to start playing, these acquired items can always be sold again. In the play-to-earn model, all obtained items represent a certain value. That means gamers will always be able to make some money the moment they step away from a game.

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