How Play-to-Earn Gaming Is Reshaping Digital Ownership

By Keegan Francis 

Many aspects of daily life are going digital, from our jobs to the assets we own. Although video games have always been digital, it has not been possible to monetize playing them in a scalable way until the introduction of play-to-earn (P2E) gaming. Cryptocurrency networks wherein users can play games, earn NFTs, then sell them for a return are growing all over the world.

A recent NFT adoption survey by Finder indicates that Southeast Asia is leading the way with respect to P2E gaming and NFT ownership. As many as 32% of people in the Philippines already own NFTs with another 9.5% expected to flow into the space in 2022. Where are other countries when compared to the Philippines, and can we learn anything about why the Southeast Asian countries are leading in adoption?

Connected to a global economy

The aspect that immediately comes to mind when analyzing NFT ownership statistics is the fact that cryptocurrency networks are global by default. Simply by virtue of using them, people are connected with others from all corners of the globe. This means that a meaningfully large community of users, players, traders and marketplace participants can be assembled with relatively little effort.

With NFT gaming, players are given a means to acquire NFTs through spending their time playing games. However, it is not enough for players of NFT games to be able to earn them, they also have to be able to sell them. Otherwise, it is not worth the players' time to earn the NFT in the first place. In order to sell them, there needs to be a marketplace and buyers willing to spend a reputable currency such as Tether (USDT), Bitcoin (BTC), Ethereum (ETH), Binance Coin (BNB) or SOL. 

It is through this medium that millions of people are given the means of participating in a global economy. This is of course contingent on people being able to turn their cryptocurrencies into currency that is usable within their local economies to acquire the necessities of life (food, water, shelter).

As long as people can play games, earn NFTs, and then use the proceeds in the real world, there is a future for play-to-earn gaming. However, data suggests that this narrative maps onto circumstances in developing nations more than in G7 nations like the United States. As many as 70.6% of people in the States do not know what an NFT is. Whereas 48% of people in Nigeria are already “in the know”.

The future of play-to-earn (P2E) gaming

The future of any individual P2E game is embedded within the future of the platform on which it exists, in addition to there being gamers to play the game and the ability to use the proceeds for everyday expenses. Statista says that 3.24 billion people play games. We need to take into consideration that many of the players may just be engaged with games like Angry Birds and Candy Crush Saga. Although one is forced to consider how much of this market will shift to P2E gaming when they learn there is a monetary incentive to do so. 

The current model is such that players spend hours a day playing freemium games and being served advertisements in the process. Why not do away with the advertising model, create NFTs, allow users to earn them, then charge a royalty on each sale? In this way, play-to-earn gaming represents a new way for game developers to economically incentivize engagement with their games. This model is already disrupting job markets, giving players a way to earn more money playing games rather than sewing shoes together at the local factory. The future of play-to-earn gaming is in redirecting people’s productivity from physical economies to virtual ones.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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