How the Play-to-Earn Model will Transform Video Games & More

We recently met with Luis Buenaventura, country manager for the Philippines for Yield Guild Games as part of our “What is New in the World of Blockchain” series. We discussed the concept of Play-to-Earn, a business model now being successfully deployed and growing not just exponentially, but organically for video games and in time, beyond.

Let’s explore this exciting new business model, what it means today, especially for those in low income economies, how it has changed the lives of so many already, and how it may change many more industries worldwide.

Context in the World of Video Gaming

“Play-to-Earn” is new. The term was coined only late last year. To understand how potentially revolutionary this new model is, let’s keep in mind video gaming has been based so far on a simple model, more like the opposite of Play-to-Earn. Until this new phenomenon, anyone wishing to become a player would pay $50 or more for a video game software after purchasing the required console and controller hardware. Today more and more players have the option to play a game for free, and rather than have to pay, they are getting paid through their mastery of certain skills, items won and other game achievements. These rewards have begun as mere micro-payments, but have grown to create an entirely new industry for players worldwide.

Axie Infinity, a Prime Example

The best example we have for this new model today, is a video game called “Axie Infinity,” which is extremely popular in the Philippines. It takes a familiar style seen in Pokemon, with its own characters and mythology. The game creators leaned toward a design for its characters to be cute, and play to be easy to learn. Players can collect, breed, raise, battle, and trade creatures called "Axies,” uniquely digitized as NFTs—Non-Fungible Tokens that are verifiably unique.

The founders themselves most likely had no idea of the great cultural impact their game would have, especially in less developed regions of the world. The Axie Infinity phenomenon especially took hold in the Philippines where it is still the most popular of any country. Currently, there are about 2 million daily active players of Axie Infinity, with 50% of them living in the Philippines. 

This is basically how the game is played: one player has their own set of Axies with a minimum number of 3, to battle against another player’s set of Axies. The game is completely online on a mobile phone or desktop; no console or PC is needed. The winner receives a small cryptocurrency reward. When the game was first created in November 2019, this was miniscule and considered just an inconsequential bonus. At that time, the game was just about having fun. Today it has become much more. 

Players at the time might expect to make $50 a month, playing an hour or two a day. Over time, the cryptocurrency that underpins Axie Infinity became more popular, causing the price to appreciate. Instead of just $50 a month, skilled players began to generate sizable amounts of income for themselves and their families. $200 a month became $400 and then $600. Today good players make an average of $500 in monthly rewards. In the Philippines, $500 a month is life-changing money. 

Timing is Everything

Considering this recent phenomenon was happening during a worldwide lockdown, with most of the population losing jobs, a population quarantined at home, with only their internet, this exponential rise in popularity of a particular video game is not surprising. Playing Axie Infinity became one of the few activities one could engage in while at home with only one’s family and internet. And once the token value increased making this activity not just a pastime, but a viable means of earning an income, it expanded exponentially and organically. Keep in mind the  minimum wage in the Philippines is about $200 a month, and playing Axie for most players involves just two to three hours a day, more like a very part-time job. 

This paradigm contributes to a healthier life/work balance. With a higher standard of living attainable for even less hours of work, players are relieved of so much stress in their lives. They have more time for family, friends, further education in other fields and since learning game skills naturally opens curiosity for other endeavors for art and technology, players may gravitate more toward these fields. This, in turn, has the potential to enrich the local culture and beyond with further artistic and technological advances, creating a wonderful effect expressed by the well-known adage, “A rising tide lifts all ships.”

Thinking Beyond

Broader, more philosophical and potentially world-changing questions arise from this phenomenon. Might this new model of Play-to-Earn be adopted in other industries in other ways? Let’s explore a few. 

Would education itself, from middle school to university, to continuing education or on-the-job training, be upgraded by such a model? If we shift the presentation of education for children as well as adults from a scenario of obligation and dread to rewards and fun, could this impact education on a grand scale? Might this be most efficiently implemented in the private sector first, then moving to a broader model in the public sector?

In a scenario which many are now advocating, a universal basic income (UBI), might a rewards system for learning new skills be advantageous? Perhaps in a similar fashion, rewards might be possible for executing responsibility-encouraging community acts—perhaps cleaning up litter, recycling, helping with minor community repairs, etc.  

And so there is tremendous potential for this new model to impact various sectors of society in a positive way. From being entertained, donating attention and time, acquiring skills and executing these new skills successfully, players have seen real value on a financial level, and a higher quality of life may also be achieved. Play-to-Earn is just one of the many innovations in thinking, new technologies like blockchain have inspired and facilitated.

Watch our conversation in the full length video with Luis Buenaventura to hear how his various endeavors are enabling more players and artists to increase their skills and visibility in the gaming space, the NFT space and beyond. And while you’re on our YouTube channel, make sure to give us a “thumbs up” if you enjoyed our conversation. Subscribe to our channel there to be alerted whenever we post a video of an interview with new innovative thinkers in the space, breaking new ground with new ideas to take us forward into the future and beyond.

Image by Phuc Nguyen from Pixabay