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Summary
According to recent estimates, the global video game industry should surpass the $400 billion mark before 2030, compared to $169 billion for the global film industry. There are even a few AAA gaming studios investing in Web3 technologies like NFTs (non-fungible tokens). More affordable consoles led gaming studios to create physical cartridges and sell them at retail stores. In addition to cutting manufacturing costs, the digital revolution introduced new revenue streams for game studios.
Many games such as Axie Infinity have incentive structures such that entrants are required to keep the economy running. This creates Ponzi-like economics where once new players stop entering the game and people lose a significant amount of money. Many games aren’t good enough to attract individuals without the monetary reward, so they’re at high risk of collapsing as a Ponzi. Notably, Axie Infinity made headlines in 2022 when North Korean hackers stole $620 million from the game’s Ronin sidechain. For example, Squid Game modeled itself on the popular Netflix series and encouraged investors to buy SQUID tokens. Since Web3 gamers need to use a wallet, there’s a steeper learning curve for players unfamiliar with crypto. Gamers may make good returns during a bull market, but all their earnings can get wiped away during a crypto winter. Some critics aren’t keen to see this incentive structure enter all their favorite games, apps, and activities.
Show Notes
But how do play-to-earn crypto games work, and can they shape the future of the gaming industry?
What are play-to-earn crypto games?
Rather than focusing on extracting the maximum value from players, P2E games seek to incentivize gamers by offering crypto rewards.
P2E crypto games are built on blockchains like Ethereum (ETH) and require players to connect their crypto wallets.
Play-to-earn crypto games: What the critics sayGetting paid to play video games may seem like a home run, but it has drawn criticism from the gaming community.
