With all the immense hype and marketing speculation surrounding cryptocurrency on the Blockchain, as seen especially in popular coins like Ether, Dogecoin, and Shiba Inu, it comes as no surprise that there’s been heavy discussion surrounding crypto games.
If you ask the general player base, crypto gaming is another greedy form of monetization that completely detracts from a quality experience. Conversely, there are those that believe a play-to-earn (P2E) model can surpass all other forms of entertainment on the planet. Many high-profile believers, including big publishers like Square Enix, have announced plans to restructure their entire corporate strategy around this method of play.
What exactly are crypto games, and why has there been so much buzz floating around them in the past few years?
How are games monetized?
There are quite a few terms used to describe the way a game is sold and how it charges players for the experience.
Before you begin to understand how crypto gaming works, it’s important to take a step back. Let’s observe the history of monetization in the video game industry, beginning with home consoles:
Standard Fixed-Rates
For decades, traditional video games have been sold at both retail stores and digital marketplaces for the price of $59.99 USD without any additional add-ons, downloadable content (DLCs), or special editions.
Even when mobile games began to truly take off in the early 2010s, titles were sold at fixed rates–forcing developers to continuously provide updates and patches at no further cost to the player. Before the Internet, what was shipped was what you got.
The standard fix-rate model applies to arcade machines in a comparable way. By exchanging several dollars for quarters, you are able to play various games at their individual rates.
Subscription
Aside from services like Apple Arcade, only the largest and most ambitious genres of gaming charge subscriptions. We especially see this in the genre of the massively-multiplayer online role-playing game (MMORPG).
Games like World of Warcraft (WoW) and Final Fantasy XIV (FF14) require monthly subscriptions paid on behalf of the player base to access the full content. This is because they are always online experiences that have untold expenses with regard to maintenance and ongoing updates.
Yet, over time, we’ve seen more MMOs switch to other practices.
Free to Play (F2P) / Play to Win (P2W)
In the wake of growing competition in the entertainment industry from every single angle, more and more games now offer the free-to-play (F2P) model. This is in spite of the fact that it has existed for almost as long as the standard fixed rate. In this scenario, players get immense value upfront with optional costs related to cosmetics, boosters, and other in-game items.
Some titles have been heavily criticized for taking this approach too far, allowing those who spend unfair advantages over others who don’t. This can be categorized as play-to-win (P2W).
How do crypto games work?
Play to Earn (P2E)
What does play to earn mean? P2E is the latest iteration of video game monetization. Also known as GameFi, it’s a business model that provides financial benefits to players who themselves contribute to the development of the game’s world.
There is evidence that claims that it has the potential to introduce retention models and concepts never seen before.
Crypto games use the F2P model as a basic foundation by providing almost no barrier to entry. While it costs nothing to get started, P2E operates in two key ways:
- Providing players the ability to own in-game assets
- Increase their own value by consistently playing the game
Through the player’s active participation in the virtual economy, they create value for the developers and their friends. As a result, they are awarded premium assets. These digital assets can range from raw crypto to in-game resources tokenized as NFTs on the Blockchain.
In short, you are (eventually) paid to play the game.
Which crypto is used in gaming?
Every individual crypto game tends to utilize its own coin which is actively traded across many popular exchanges. For example, the popular pet battling simulator known as Axie Infinity has players earning AXS coins, and others such as Illuvium use ILV coins.
How do I get gaming crypto?
You have every option available in terms of getting your hands on gaming crypto. The main draw to the P2E model is that you are awarded cryptocurrency just for actively playing the game and being a part of the growing community.
Still, you can spend regular money inside of the games themselves as an investment to gain an advantage. Consequently, end up earning more crypto than if you were to just play it for free.
However, all of these gaming cryptos can be purchased directly on popular exchanges with regular cash through Binance and Gemini, to name several. And yes, Coinbase does have gaming crypto as well. Of course, you’ll need to set up a dedicated crypto wallet to be able to convert the currencies.
How do you make money with cryptocurrency?
Cryptocurrency, like any other real financial asset, has a value that is constantly fluctuating based on market trends. In addition, it can be purchased and sold in the same way that securities such as stocks, bonds, options, and forex can.
Before you can hold crypto assets, you must have a dedicated wallet to store them in. These wallets are digital and require a free account with an exchange to sign up. Typically, you’ll have to provide a valid form of identity before receiving approval to trade.
For example, according to Yahoo! Finance, the average price of Cardano saw a massive price spike per coin in 2021. If you had traded USD through an exchange like Coinbase to purchase Cardano coins in January and sold them back in late August for USD, you would have more than doubled your investment.
Crypto games are just one way to make money with cryptocurrency. Some others include:
- Buying and Selling on exchanges (trading)
- Interest and Staking (earn passive income by holding)
- Mining (contribute directly to new blocks)