OakParkFinancial: What P2E gaming can teach us about the digital economy and the metaverse

  • Play-to-earn games may provide gamers with digital identity, assets, and ownership as the gaming business decentralizes.
  • This is how current video games may bring new paradigms for developing digital worlds and value generation.
  • These games are also helping to bring the physical and digital worlds closer together.

Two university grads wrote this essay. Surprised? No way. Perhaps more noteworthy is how we individually paid our tuition. One went the ‘conventional’ path with college loans, summer employment, and family help. The other was a gamer.

Popular Computer games like ‘Diablo II’ (2000) and ‘Runescape’ (2001) enabled gamers to amass enormous fortunes just by being good at their games. The author of your paper, Moritz Baier-Lentz, was able to fund his undergraduate and graduate studies by completing in-game tasks and selling the prizes for real money, outperforming the other 13 million active players worldwide.

As a result, video game markets and transactions were never genuine or safe, making instances like this more of a case study in cunning individual entrepreneurialism than actual professional activity.

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Massive gaming industry expansion based on centralized value systems

Nearly 3 billion people worldwide now play video games, and the professional gaming industry has sprung up, providing enormous opportunities and money for elite gamers. The best of them are athletes, earning salaries, winning competitions, and securing big sponsorship deals. Others monetize their live broadcasts by playing games on Twitch or YouTube Gaming.

BITKRAFT Ventures estimates that the video gaming business is worth $336 billion, including software, hardware, and intellectual property. Certain traits have evolved as gaming has grown to be the world’s biggest media category, surpassing linear TV, on-demand entertainment, cinema, and music. Almost all game-based economic activity is centralized, providing creators and publishers complete control over their games’ content. To collect the billions created by in-game content, digital products, and subscriptions also means that most gamers have limited opportunities to partake in the value without professionalization.

In recent years, the industry has developed to include more and more ‘play-to-earn’ games. It lets users ‘truly’ earn and own digital assets that they may sell outside the game at will.

Play-to-earn might provide gamers with digital identity, assets, and ownership.

To devote considerable time, attention, and personal investments to digital environments, people, must first trust their digital presence, commodities, and economic viability. Early implementations suggest that blockchain technology may provide digital trust and decentralized value storage utilizing encryption.

Blockchain is already being used in industries ranging from banking to art, including video games. Play-to-earn games use blockchain technology, including non-fungible tokens (NFTs), to create value. An NFT is a digitally protected ownership claim for a unique digital asset. NFTs may be people, goods, land, or ornamental customization elements like digital clothes. The most precious things are earned by playing skillfully and may be sold for real money at any time.

Decentralized integrity and security of digital goods may now transcend conventional proprietary, custodial ownership, and discretion of a firm or even government. The sale of in-game resources from play-to-earn games can be made without the permission or rules of publishers or other third parties.

Communities promoting the potential of play-to-earn games in creating a new economy have sprouted up recently. Notably, ‘Axie Infinity’ illustrates that this isn’t simply a pipe fantasy. The popular play-to-earn environment has gained popularity in the Philippines and Venezuela, growing from 4,000 to 2 million daily active users. The revenue gamers may make in the digital realm is significantly more than what their local physical economy can deliver.

Yield Guild Games and other scholarship programs, emerging countries with the ability to play-to-earn games, have drawn substantial investment and become billion-dollar corporations in months, surpassing the worth of numerous famous video games platforms that provide frictionless economic opportunities and meritocratic participation globally. The world seems flatter in 2021.

For now, it’s worth emphasizing that play-to-earn games still need the publisher’s ability to create, issue, and control the asset that finally trades as an NFT. Players need to convert their digital time, effort, and earnings into fiat currency to make money. This is where play-to-earn games shine.

Those who believed in these new worlds and quickly jumped on the chances will reap substantial financial rewards.

Play-to-earn may provide a new and flexible option for gamers to gain money. The digital economy, which risks generating “humans as a service,” is also reflected in the absence of job stability, fragile connections between enterprises and employees, and social safety nets. Given the over-representation of freelancers in the creative sector, policymakers will need to address these factors.

Play-to-earn games as the ‘metaverse’ employment board

While play-to-earn is still a new concept, it may change the gaming scene. We argue that it can influence people’s perceptions of established socioeconomic organizations like banks, markets, and governments. They demonstrate an autonomous financial system, an open creative economy, and universal digital representation and ownership.

The trend of growing convergence of the physical and digital worlds appears to be driving play-to-earn games. With it came the mythical ‘metaverse,’ which has become the subject of contemporary scholarly disputes and revitalized business ambitions, most notably Meta (née Facebook). Most discussions of the metaverse revolve around technological intricacies, functional features, or end-user implementations in the form of high-quality 3D and extended reality headsets.

Instead, the metaverse may be the moment in time when digital identities and assets outnumber physical ones. As metaverse startup Koji points out, our journey to the metaverse is a socioeconomic upheaval caused by technology and connectivity. Humans appreciate products and experiences because we live in a culture that values them. A metaverse is a place where digital assets, experiences, and connections outweigh our physical environment.

It may be too late for many individuals, from the US to Venezuela and the Philippines.

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