people playing games using ps5 controllers
Alena Darmel / Pexels

INN breaks down what the play-to-earn model offers to the burgeoning gaming investment marketplace.

The decentralized finance trend is dramatically shifting the world of video game investments as market participants continue to realize the opportunities available in the sector.

One of the most recent innovations in this arena is the introduction and proliferation of the play-to-earn model in combination with blockchain technology and the adoption of non-fungible tokens (NFTs).

These new-age tech models are creating fresh ways to understand games. While the initial results show there is still a long way to go, some experts have pointed to changing patterns among game consumers.

Here the Investing News Network (INN) offers investors a quick look at the play-to-earn GameFi model, which combines finance and gaming to offer games that monetarily incentivize play.

Gaming models change with the years

Gaming has generally been understood as a recreational activity with a singular transaction model: Buy a game and play it until you’re satisfied with it. But this model has been changing lately.

This shift started when game makers began to sell additional content — downloadable offerings have now become an expected standard for consumers depending on the size and success of a game.

Subscription models are another way for games to secure alternative revenue streams. Massively multiplayer online games ask for a monthly payment from players in return for a steady stream of content and modes.

Mobile games have helped increase the free-to-play model in which a game starts at a free price point, but offers purchasing options for in-game content that players can use to customize their experience.

Now, thanks to the rise of blockchain technology, games have begun to offer the play-to-earn model, which can create a way for players to generate digital assets that vary in value.

What does play-to-earn mean?

These games, which rely on blockchain technology, offer players a way to earn in-game digital assets that hold varying values in a cryptocurrency dependent on the game.

“In blockchain games, (NFTs) enable users to take ownership of in-game items, such as virtual clothing or plots of land,” an article on the website Decrypt states.

There’s been an explosion of these types of games, but the ones that have risen to the top have shown the path for more blockchain games to rise.

“Rather than selling game items or copies, the developers of the game focus on growing the player-to-player economy,” said the makers of Sky Mavis, one of the most popular blockchain games out there, according to a report from the Drum.

The promise attached to these rewards is that they can be sold to a marketplace of game players.

Experts say gameplay needs to come first

Despite this intriguing premise, the report from the Drum indicates that gamers have not widely adopted blockchain games because they lack an interactive aspect and have failed to prioritize gameplay.

“Instead of focusing on gameplay and graphics, economic incentives have become the priority of both players and developers,” the report explains.

A roadmap laid out in a report from the Decrypting Story indicates that the model for these games that is most likely to be successful will be an ecosystem in which more regular gamers who prioritize gameplay experience co-exist with those more interested in the play-to-earn mechanics.

The report reads:

The sad reality is that for most of the users of Web3 games, those who are buying their tokens, are financial players masquerading as gamers. Web3 games that have burst upon the scene, start out by targeting the P2E gamer. But the players all games need to attract first and foremost need to be the regular gamers.

Red flags for blockchain gaming models

Overall, a market report from Huobi Research indicates that the player base for blockchain games “is still relatively small compared with traditional games,” although the hope is that this will change.

One barrier is that play-to-earn games have been criticized due to the speculative nature of the blockchain world. “As a result, gamers often associate blockchain games with Ponzi schemes and scams,” the report notes.

The launch of GRIT, a battle royale game with blockchain options, on the Epic Game Store, a PC gaming platform, did not go exactly according to plan and highlighted some of the confusing pricing models within these games.

“While some pushback might happen, we think that users will embrace our games once they see the ‘fun’ and understand the value of true digital ownership,” John Osvald, president of game maker Gala Games, told Waypoint.

Investor takeaway

The blockchain and gaming industries are both still nascent sectors, meaning that when they combine to make blockchain-focused games there can be a significant amount of unpredictability.

It will be crucial for investors to watch the evolution of the GameFi trend and keep an eye on the amount of interest these games can garner from a wider audience.

Don’t forget to follow us @INN_Technology for real-time news updates!

Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.

Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.


S&P 5004280.15+72.88


Heating Oil3.51+0.03
Natural Gas8.78-0.09