How blockchain games are becoming Metaverse economies
Combining NFT's, blockchain technology and Play-To-Earn, games are becoming metaverse economies.
Just half a year ago, the term Play-To-Earn was still unfamiliar to the vast majority of people, but now, almost the entire gaming industry is talking about this trend. With the Play-To-Earn system, players not only receive rewards in the game, but also can earn real money while gaming.
Play-To-Earn exploded with with the recent success of Axie Infinity developed by Sky Mavis. In fact, in the past, gamers used to resell skins, blueprints, inventory items earned when playing games. However, due to issues of duplication of digital items and solvency, this process is often very difficult and most of the time does not yield the desired income for the player.
Meanwhile, NFT's uses transparency and security in a digital ledger on the blockchain, so it can confirm the uniqueness of in-game items. This is also how Axie Infinity makes it easier for players to resell rare items they collect in the game.
This model has resonated greatly in recent times when it provided income to a significant number of Filipinos, helping them make a source of income during the pandemic and global lockdowns. According to Jeff Zirlin, co-founder of Sky Mavis, Axie Infinity has brought hundreds of thousands of jobs to Filipinos – to the point where the government is proposing tax gains on player's earnings..
Meanwhile, every time a player sells a character, Axie Infinity collects 4.25% as an exchange fee to maintain the ecosystem. Most of the profits still go to the players and they will repeat this process by levelling up the characters and continuing to sell them.
Play-to-earn is not only beneficial for direct players, this model also benefits other components of the game. Play-to-earn is also being promoted by Yield Guild Games, a company founded by Gabby Dizon that manages player guilds, many of which are from Axie Infinity.
The company will provide "the know how's" to players, pay their joining fee for players to start earning and collect a percentage of the earnings they make. Besides, YGG also invests in items to ensure players can earn money.
"We invest in virtual assets in these titles, typically NFTs that are created with some sort of tokenized asset similar to Axie Infinity." Mr. Dizon said. "We lend these assets to our community of players, let them play the game and generate income."
And yet, this model also brings other values to game participants. "The fact that people can create valuable things in games and then sell them to others, is creating new kinds of jobs where people are willing to do other things inside games and these virtual worlds." Mr. Dizon said.
"It's going to lead to new types of innovation in this economy, from players who are doing actual work. Others, for example, can become land brokers or play e-sports and streaming."
In other words, what Axie Infinity and its play-to-earn games offer is not just a place where people can have fun, but also build an economy around a digital ecosystem. That's — a new kind of metaverse economy — according to Mr. Dizon. That is the factor that makes these games attractive, instead of the graphics and gameplay elements as before.
The success of Axie Infinity created a global effect, prompting the entire industry to move towards this model. Of course, the reward is always given to the pioneer. Axie Infinity helped Sky Mavis raise $153 million from investors, at a valuation of $3 billion.