Over the years, more than a few styles of games have cropped up: pay-to-play games vs. free-to-play games, pay-to-win games, and now, pay-to-earn games. But what exactly is a pay-to-earn game, and can there ever be a good implementation of pay-to-earn that doesn't feel like a scam with extra steps?
Not to worry, because in this article, we'll explain everything you need to know about pay-to-earn games and tell you if they can be any good.
What Are Pay-to-Earn Games?
The core idea behind pay-to-earn games comes down to this: you pay some money upfront for a game that you can, by playing, earn cryptocurrency through that you can choose to cash out for real money. Naturally, this is all usually enabled by way of the blockchain, NFTs, and cryptocurrency.
As you might expect, this is both a new type of game as well as a rather controversial type of game, considering the reliance on Web3 tech like crypto. Popular pay-to-earn games include Axie Infinity, Sandbox, Sorare, and more. In general, upfront costs of pay-to-earn games are low, and profits are also low.
But how does any of this work? How does the player make money, and how does the development studio make money? Well, it's simpler than you might expect. For one, players make money by earning cryptocurrency usually through the acquisition of digital assets.
So, for example, say you play a pay-to-earn game for a while, build up a powerful character, and find a particularly rare sword. Say that isn't just a sword in a video game, but it's also an NFT that you can trade to other players for cryptocurrency that you can then, in turn, cash out for real money.
A studio makes money off a game like this in any number of ways. One way could be by taxing trades, and another way could simply be by making a compelling game people want to play such that the items in the game become valuable because other players in the game want to have all the coolest and best items to be able to play the game the way they want to play it.
The concept here isn't too offensive, but there are a few chief worries about pay-to-earn games. For one, the idea that doing things in a game (which most people do for fun) can be broken down and itemized into discrete monetary values is existentially scary. For another, there's the worry that you'll always be spending much more time, money, or both on a pay-to-earn game than you'd get back to make the experience worthwhile.
So, can pay-to-earn games exist that avoid those pitfalls?
How Pay-to-Earn Could Exist in an Okay Way
Take Path of Exile, for example. It's a traditional game that's free-to-play and supported by microtransactions that include cosmetics, cosmetic lootboxes, cosmetic battle passes, and storage space.
Now, imagine that in Path of Exile by fighting monsters you had a small chance to drop a cosmetic. Cosmetics like weapons, armor, skill effects, and more the likes of which you could find in the in-game store as microtransactions that you could buy directly for a certain price.
As you progressed in the game and took on harder and harder and juicer and juicer content, your chance of dropping cosmetics would go up, and you'd have a chance at dropping rarer and rarer cosmetics. But imagine that these weren't just in-game items but they were actually NFTs on the blockchain. And imagine that you could trade these with other players or sell them outright for a particular cryptocurrency that you could cash out for real money.
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This would be an example of a pay-to-earn system that would likely supplement a free-to-play game's existing microtransaction monetization model without, really, upsetting the balance of the game, becoming pay-to-win, or locking all the coolest cosmetics behind a huge paywall. This is ultimately an example of how a pay-to-earn style game could exist that doesn't feel like it's degrading the overall gaming experience.
Do People Actually Make Good Money Playing Pay-to-Earn Games?
The short answer is no, but the longer answer is sometimes.
If you live in the United States, for example, chances are you aren't ever going to make that much off a pay-to-earn game. There's a chance if you become one of the top players and you're able to dedicate yourself full-time to such a game that you could make enough money to live off of, but that's almost inevitably going to just be a fraction of a fraction of players.
However, the value proposition changes a lot when you go to developing countries where the currency of a particular country may not be anywhere near as valuable as USD. Take Venezuela, for example, where the country's economy is not in a good place, plummeting the value of its currency. Here, playing Runescape and selling Runescape gold is an actually viable career that you can reasonably comfortably live off of as your main source of income.
Similar can work for pay-to-earn games. While you may only be earning a relatively low amount in USD of currency an hour playing a pay-to-earn game, you may well make enough money to support yourself in a developing nation. What's more is that since these games are played online, this can be a convenient and accessible way for folks in those countries to work from home.
Of course, even for folks in developing countries, pay-to-earn games aren't get-rich-quick schemes or usually the main way people make money, but depending on the game, your skill level, and your understanding of the game, you might be able to make good money playing a pay-to-earn game depending on where you call home.