Interest in mobile gaming, cryptocurrency and user-generated content is reaching new highs in 2021, setting the stage for the Play-to-Earn industry.

Playing money-making games has become one of the hottest phenomena in the crypto space. According to AppRadar, the total number of active blockchain games has doubled to 398. The number of unique daily wallets interacting with game-related smart contracts has also soared from 28,000 at the end of 2020 to 1.3 million by 2021, a 46-fold increase.

Making this trend even more interesting is the fact that hundreds of crypto games are still in development. In the midst of increasing competition, developers are coming up with unique gaming experiences to keep users engaged.

What are play-to-earn games?

Simply put, a play-to-play game is a video game where players can earn rewards that have real value.

While people have been making money from playing video games for years through practices such as "gold farming" and unofficial marketplaces for in-game items, the advent of blockchain technology and NFTs has really changed the game. NFTs, or irreplaceable tokens, are cryptographically unique tokens that can be used to prove ownership of content such as images or music. In blockchain games, they enable users to take ownership of in-game items, such as virtual clothing or land.

Unlike regular games, where in-game items are kept on a closed data network and owned by the company that created the game, NFTs enable players to own the unique assets they purchase. In addition, once you own an NFT, you are free to sell it outside of the platform where it was created, which is something you cannot do with regular games.

This means that NFTs representing in-game items can be traded and sold in legal tender on any NFT marketplace. And because these NFTs are scarce, they have real value.

For regular games, there is no incentive to play other than pure enjoyment. The relationship is one-way: you pay for the game, and unless you are a professional e-sports player or an anchor with a large following, you will never be able to profit from your playtime. In contrast, blockchain gaming offers players the opportunity to earn real money.

Because blockchain technology enables users to transact anywhere, players can transfer value and get paid, no matter who they are or where they are in the world.

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Play-to-earn game elements

We captured four key game elements of mobile games that include P2E functionality, either directly or indirectly in the game.

Play to Earn: One of the most common barriers to entry in this space is the complexity involved in blending Play-to-Earn mechanics with the core mechanics of the game. Current implementations often exist in spaces outside of the game itself. For example, players default to wagering the game's soft currency, or can purchase cryptocurrency or non-homogeneous tokens (NFTs) from the developer's website. NFTs enable users to enter different battlegrounds to earn cryptocurrency, rather than the game's soft currency. Cryptocurrencies can also be withdrawn and traded on cryptocurrency exchanges to realize game revenue. However, with emerging examples like Thetan Arena, where P2E functionality is blatantly integrated into the mobile game itself, this could drive wider adoption in the long run.

NFTs: Apes vs Mutants, a role-playing handheld game based on the Bored Ape Yacht Club (BAYC) and Mutant Ape Yacht Club (MAYC) IPs, soft launches on January 21, 2021. One of the most popular IPs in NFT, it could bring a big card to the game. bored Ape Yacht Club has over 551,000 followers on Twitter. While the game offers an exclusive contest for BAYC/MAYC NFT owners, those without BAYC/MAYC NFT can still play the game. the P2E component can be accessed outside of the game itself through the website. Highland is a virtual property trading game that allows users to buy, sell and trade property, backed by their in-game currency "UPX". You can also purchase NTFs in the form of game packs based on top players' jerseys, hats or game balls. ownership of NFTs is tracked through the blockchain. As an extension of NFT, we are already seeing signs of virtual representations of physical objects in blockchain meta-boundary games. Although there are currently a limited number of users playing these new blockchain meta-boundary games, there are already a significant number of virtual land purchases in them.

Play to Earn - Cryptocurrency: Merge Cats is an example of a play to earn game where the main draw card is to play the game to earn cryptocurrency. Users are incentivized to reach new levels to increase their budget. There are also opportunistic games that use P2E and crypto keywords in their titles or descriptions to attract downloads through App Store Optimization (ASO). Some of these games reward users with a small amount of Bitcoin or other mainstream cryptocurrency for playtime, and while these are not really P2E games, they are important examples of the budding interest in these types of mobile games by developers and players alike.

Play to Earn - Traditional Currencies: Games like Bingo Cash and Dice Kings allow players to cash in their virtual currency, which can be earned through tournaments or skill-based competitions. The increase in engagement provides significant opportunities for in-app purchases and advertising real estate.

Why are play-to-earn games so popular?

Play for money games have caused a major psychological shift. Not only the way developers develop games, but also the way players perceive them. 

The essence is - players are starting to realize their value. They will no longer be satisfied with one-way communication and greedy economy. They want to participate more prominently in the game and want to own the assets they work so hard to acquire. 

However, for some players, these things don't matter. For them, it's all about making money.

Play-to-earn games in developing countries

In some countries/regions, players see playing games as a way to earn a living. The best example is the Philippines. 

At the beginning of the pandemic, the unemployment rate in this country climbed to 40%. On top of that, the minimum wage in this country is very low (about $230 per month according to Countryeconomy). 

A special game became a phenomenon in the Philippines - Axie Infinity. At that time, players could earn up to $1000 per month by growing the game's SLP currency (Blockchain 101). 

All this developed until the Philippine government announced that people who play this game for a living will need to start paying taxes. As you may know, Axie Infinity is a pay-to-play game. 

How do developers make profits from play-to-earn games?

Paid developers don't just put the player's initial investment in their pocket. It's not that they don't want to do that, but it simply doesn't work that way. 

They do, however, get a small piece of the pie. 

In paid games, developers first need to determine what players need to have in order to start playing the game. They can have them buy one, two, or more NFTs. for example, to play Axie Infinity, players need to have at least three NFTs beforehand. 

Well, if the developers don't just take the money, how do they make money? Developers are the creators of every NFT in their games. Think of them as the authors of the music. Just like musicians make money from royalties, so do NFT creators. 

Every time an NFT from their game is sold in any marketplace, it gives them a reason to smile. With every transaction that happens on the marketplace, the developer has a share.  Developers determine this share by arranging smart contracts on the blockchain. the standard NFT royalty is 5% to 10% (Cyber Scrilla).

Top play-to-earn games

1. Axie Infinity

How can we possibly talk about game money making games without talking about Axie Infinity? As the most popular money-making game to date, Axie Infinity can be compared to games like Pokemon and Tamagotchi, where players can collect, breed, evolve, trade and fight cute little creatures called "Axies". Axies have different attributes and advantages and can be bred with other Axies to generate new unique Axie babies using in-game tokens called Smooth Love Potions (SLP).

2. Illuvium

Illuvium is an RPG fantasy game that combines open-world fantasy exploration with PVP matchmaking, where Illuvium players can battle, engage in quests and challenges, collect and trade. illuvium games are inhabited by creatures called Illuvials that players can capture in battle. illuvium tokens (ILV ) is used as a governance token through the Illuvium DAO to reward players for in-game achievements and entitle players to share the Illuvium Vault.

3. Gods Unchained

Gods Unchained has been making headlines in the crypto space as one of the most popular free-to-play, money-making trading games currently available. Led by a former game director and inspired by Magic The Gathering: Arena, the game competes and outsmarts opponents by collecting cards and building decks of cards. The cards in the deck allow players to strategically combine various tactics in order to play and defeat their opponents in the game.

4. My Neighbor Alice

Inspired by the popular game Animal Crossing on Nintendo Switch, My Neighbor Alice is a multiplayer building game featuring a narrative players can follow and a digital world for them to collect and trade NFT. Players can buy or own virtual islands, collect and build exciting items and make new friends. The "play to earn" part of the game comes from completing tasks that allow players to earn the game's native token, ALICE.