The Play2Earn Revolution
As we all know, blockchain gaming is a veritable hive of creativity and exciting financial possibilities, with innovative, ground-breaking concepts appearing constantly to disrupt the industry. Play2Earn and Watch2Earn models especially have exploded in popularity, as players expect a broader spread of opportunities to monetize their time spent gaming with DeFi-powered tokens.
After the frenzy of ICO drops in 2017/2018, another major period of activity has been taking place over the past 12 months. Some of the more recent tranche of releases have provided a spectacular ROI, highlighting the economic potential for tokenization of in-game assets and digital collectibles: in short, the meteoric rise of the NFT.
As Coinbase says, “We’re at an exciting time in crypto: one in which crypto networks are blossoming into full-fledged virtual economies. Nowhere is this more on display than with NFT gaming.”
We’re going to focus on six blockchain gaming companies which offered ICOs over these two periods.
This period saw an astonishing amount of money raised at warp speed through ICOs, with the top two alone (not included here) garnering almost US$500 million.
Decentraland is a decentralized VR world where players can buy parcels of LAND, create their own environments and apps, charge other players for using these, and also earn money from minting wearables as NFTs. Decentraland’s 2017 ICO has offered a 44-fold return on US$ investment, or 3.48 in Bitcoin.
A blockchain development company set up in 2009, Enjin’s products facilitate the creation and use of NFTs for gaming — its ENJ coin powers 2 billion of them. Enjin’s ICO drop in the same year brought even higher ROI — 66 on US$; 8.7 on BTC.
Focusing on the video and esports entertainment space, Theta is a decentralized peer-to-peer network where users can create an income by watching streamers and sharing their upload bandwidth. Its ICO at the start of 2018 brought 56 x on US$, while its BTC return was 17.
In the current ICO boom, certain gaming platforms are seeing astronomically high returns. The COVID pandemic has helped, with players being stuck at home for long periods of time, and spending more hours gaming, investing — and playing to earn.
A virtual world created by its players, where users can buy LAND, and build and monetize their own experiences, The Sandbox is also creating a buzz — the token return from its drop a year ago is a whopping US$121, and BTC 29.
As a gaming platform, Exceedme offers a custom server where you can play against friends, as well as ranked matchmaking where you bet on your own skills — its return has been more moderate, with 15 times on US$, and 9 on BTC.
But the name causing the biggest buzz in the NFT gaming world right now is Axie Infinity. One of the most important gaming success stories of the past year, with an astonishing one million+ daily users (half of whom are in the Philippines, see YGG below), its play centres on Axies, creatures which battle each other, complete quests and can also be bred (and sold) — actions which are all rewarded, as is farming for the potion needed to breed Axies.
Its ICO drop, in November last year, has had an astonishing return — 715 times in $US and 204 on BTC.
In the past month alone, this Pokémon-inspired game has generated US$300m in fee revenue (payable every time an Axie is traded or bred), with US$42m in NFT sales in June 2021.
Opening up blockchain gaming to a whole new cohort of players, Play2Earn platform Yield Guild Gaming operates a distinct model, taking on “scholars”, mostly in emerging economies. These gamers are lent or given their initial Axies (you need three creatures to start, from around US$200 each), keeping 70% of their subsequent earnings. In some countries, Axie’s SLP token is now used as a form of everyday currency, lifting its players out of economic hardship from their Play2Earn.
The recent ICO drop, in July 2021, has produced a 40 x return on US$, with 33 on BTC — YGG has been buying up Axie NFTs to loan to its scholars.
Just as investing in cryptocurrency is always a risk, ICO drops are never guaranteed to make you money. But the canny investor, and player, with the right knowledge and sharp instincts, certainly has the potential to create a decent revenue stream.