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Admin Admin | Jan 1, 2023

Reimagining P2E: The Evolution of Sustainability in Play-to-Earn

When play-to-earn (P2E) gaming first emerged in 2021, the idea seemed almost too good to be true: gamers could earn money from playing video games. The concept was a reversal of everything we were told as children by our parents. Now, games were no longer a waste of time, nor a hobby that led nowhere productive.

How does the P2E model work?

In the web3 space, the play-to-earn model refers to a type of online game or application that allows users can earn cryptocurrency or other digital assets by participating in the game or using the application. These assets can often be traded or sold on online marketplaces, giving users the opportunity to earn a return on their time and effort spent playing or using the application.

To understand how this works, let’s take a step back to understand a little bit about cryptocurrency and the web3 ecosystem. Cryptocurrency is a digital asset that uses cryptography for security and is decentralized, meaning it is not controlled by any single entity like a bank or government. The web3 ecosystem refers to the decentralized web, which is built on blockchain technology and enables the creation of decentralized applications (dApps) that can interact with decentralized networks.

In a P2E game or application, users can earn cryptocurrency or other digital assets by completing tasks or achieving certain goals, thus potentially generating a return on their time and effort spent doing so.. These assets may have real-world value and can be traded or sold on online marketplaces. For example, a user might earn a certain number of tokens by completing levels in a game, and then be able to trade or sell those tokens for other cryptocurrencies or even fiat currency, like US dollars.

What made it popular?

The income generated from P2E games was novel for most players in the world, but especially significant for gamers in emerging markets, where the money had considerably greater value. For example, one person in the Philippines was previously earning US$80 dollars per month as a food stall vendor, and was lured by the promise of making more than 5 times his monthly salary playing Axie Infinity, the game that first set off the P2E craze. As many were reportedly bringing in that amount of money at the time, he quit his job and began playing Axie around the clock. Unfortunately, close to a year and a half later, he was down thousands of dollars.

This gamer was not alone in his demise. Hundreds of thousands of gamers have been forward-thinking enough to adopt P2E gaming as a full- or part-time income, but have been let down by the model as it gained more traction over the years. Because P2E was and is not yet sustainable as a business model, the gamers who relied on it for income had unknowingly strapped themselves into a financial rollercoaster. Expecting the dizzying highs to continue, most only got out as the returns plummeted. Some, like the food stall vendor, only escaped when hitting close to rock bottom.

Such is the plight of these early adopters, as we saw even in the earliest days of the internet: while the tech startups founded in the dot-com era offered consumers enormous value, not all were not sustainable for a common set of reasons. The same is true of P2E: there are universal issues that cut across all the games, as is evident in these problems.

Problem 1: The Unsustainability of P2E

Many have unfavorably compared P2E games to multi-level marketing, and this comparison is not without merit. In Axie’s execution of P2E at least, gamers could realistically only make money if significantly more players joined after them, much like a MLM scheme. These new gamers would either serve as the player’s ‘scholars’ — arguably similar in function to how downstream sales work in an MLM — where they generally hype up and boost the value of the tokens through their gaming.

This reliance on a steady stream of new users is inherently unsustainable: as the number of players who want to earn from P2E is not infinite, this pyramid is bound to collapse eventually.

Problem 2: The emphasis on earn versus play

Critics have argued that the category name of “play-to-earn” is misleading, as people assume that generating income from P2E is simple and straightforward. As an alternative, these critics argue that ‘play-and-earn’ would be a more fitting name, which implies that income is merely a byproduct and not the main goal of these games.

A more salient criticism of P2E is that the gameplay itself over-emphasizesthe earning rather than the playing. In other words, most P2E are simply not fun. Take the example of Pegaxy, which has players competing in player-versus-player races to win tokens. Even with the colorful, web3-style branding — players race as winged horses — the racing mechanics cannot compare to even the worst racing game on a console. Stripped of fun gameplay, players are left ‘grinding’ tokens, a tedious activity that many reasonable people would argue is far worse than any job, and harmful to one’s mental health to boot.

Problem 3: The high barriers to entry

One of the great ironies of P2E gaming is that most titles are not free. The same business adage applies here: To make money, you need money. For P2E gaming, this means that players need to invest in tokens or some other digital asset in order to begin playing, so that they can in turn earn more of the same currency.

Many such tokens are prohibitively expensive. At its peak, an Axie could sell for as high as US$340 as an example. So while P2E was lauded as a way for the working poor to earn much more money, the infrastructure of the category in reality made this highly unlikely. To get involved in P2E, many impoverished players had to work as ‘scholars’, dividing their earnings with the owner who financed the purchase of the character. In other words, P2E did not allow them to take control of their own financial destiny — they again became poor workers, this time in a colorful gaming universe. The situation was so oppressive that some described P2E as another form of digital colonialism.

For these reasons, the player base for enthusiasm has dwindled today, exacerbated by the broader economic downturn in cryptocurrency. The situation is not all lost, however; just because these early P2E innovators have struggled does not mean the model is moot. There are several new entrants trying to revitalize the genre by addressing its fundamental issues — making games more accessible and democratic, enhancing their playability to the point they are actually good for a person’s well-being, and even increasing sustainability through real world value.

Redefining the P2E landscape and business model

While most in tech celebrate being first to market, MetaPals has a decided advantage in entering the web3 gaming world for various reasons: the most important proposition of all being that it does not adopt the play-to-earn model. For one, in nearly all P2E games, there is no inherent value to the core gameplay. Slaying monsters in Axie, for example, does not produce any kind of real world utility apart from the in-game tokens, which as we’ve seen, vary highly in value depending on the whims of the market.

MetaPals, on the other hand, offers real world value to both players and enterprises in the form of emotional companionship through caring for virtual pets. Inspired by the highly successful Tamagotchi first released in November 1996, the team wanted to reintroduce this concept of husbandry to the existing and a new generation of gamers, who can now own a virtual pet entirely in their browser. This sense of companionship that we all naturally crave and need as social creatures naturally leads to improved happiness, thus providing a second and equally important benefit to players: improved mental health. Now, who can say that of felling monsters? (Also, it’s fun taking care of these virtual furbabies!)

The MetaPals team also smartly ties this value proposition to a positive feedback loop using the game’s proprietary Proof-of-Care model, wherein users are incentivized to care of their virtual pet by to earn in-game currency that allows them to purchase necessities like food or snacks. These actions include a range from feeding and cleaning to playing minigames or accessorizing their MetaPals. Viewed another way, MetaPals rewards players who deepen their bond with their virtual pet and improve their well-being from it. This impact on wellness, needless to say, is valuable in an era where more and more consumers are searching high and low for solutions that advance their happiness and well-being online.

Later stages of development will also introduce an educational element to MetaPals, where players’ virtual pets will eventually become their loyal guides to all things blockchain and web3 while still ingame. Because MetaPals brings people to experience a life that is “half reality, half meta,” the game is both an entrypoint and bridge into the metaverse, which for all its hype, has lacked a killer use case to draw people en masse into its digital worlds. The virtual pets of MetaPals can serve this function, leading players into the metaverse by the leash. To this end, there is a strong incentive for developers, enterprises, and the mass market to enter the web3 space through playing MetaPals.

That said, the game is still in early stages of development, where the team is still building its core game mechanics for players to have a wide range of interactions with their virtual pets. We’ll soon be announcing the 2023 roadmap in a few weeks, so follow our blog for more updates to come!

If you’re curious as to how MetaPals works, you can download the Chrome extension here!

And if you’re the sort who digs funny pet content or need the occasional chuckle from social media, you can follow our socials here. You can also join our Discord to meet other pawrents, and get up close and personal with the team here!

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