How P2E Crypto Games Can Stay Competitive During a Crypto Winter

We might be on the precipice of crypto winter, but if forecasts are accurate, it should be a warm one. Even then, any kind of market downturn is never a cause for celebration, and between the general crypto downturn and recent scandals, the play-to-earn (P2E) crypto industry has taken a relatively heavy blow.

But even with a looming crypto winter, that doesn’t mean it’s the end of the road for the burgeoning market—far from it. Despite shaken consumer confidence, P2E crypto gaming is still on target to surpass $200Bby the end of 2022.

Axie Infinity’s massive security breach earlier this year, along with recent accusations of it being a Ponzi scheme, was a much-needed wake-up call for the industry. Although the fallout has been felt across the crypto gaming space, it has provided a roadmap for remaining competitive during the upcoming crypto winter.

Let’s take a look at some of the things forward-looking developers are focusing on to revolutionize the industry.

Economy Evaluation

After enduring an unprecedented security breach resulting in the loss of $600M+, crypto gaming giant Axie Infinity suffered further losses when multiple social media influencers and major news outlets started questioning whether the game was essentially a Ponzi scheme.

The biggest part of the issue is that Axie is built on what’s called a two-token economy, meaning it has both a utility and a governance token. This model tends to have mint/burn ratios that are left unchecked, which in turn leads to hyperinflation and enormous sell pressure on gamers and investors holding project tokens.

The only way to reduce this pressure is through a steady flow of new funds, which is what has led to the accusations of Axie being a Ponzi scheme.

To combat this sort of hyperinflation, developers need to shift to a single-token economy. When projects have fixed supplies, there’s no risk of hyperinflation or mass printing, creating greater coin stability for both investors and players.

This type of stability will be essential going forward to improve consumer sentiment toward the P2E industry as a whole.

Be Environmentally Friendly

Another increasingly essential aspect of P2E gaming is environmental friendliness. Most of the current and upcoming projects have NFT components, which has raised some concerns in certain circles over the effect these games have on the environment.

Cries of alarm over the environmental impact of NFTs are nothing new, and they’re not entirely unwarranted. However, some of the criticisms NFTs face are not entirely founded, or at the least, they’re not entirely grounded in the reality of the current situation.

It’s important to understand that blockchains use different consensus mechanisms to validate new chains in the block. Most people are aware of the Proof of Work (PoW) consensus, which relies on mining to validate transactions. But until recently, many people were not aware of the Proof of Stake (PoS) consensus, which requires fewer resources due to groups of people coming together to form staking pools to validate transactions.

In a headline-making move, Ethereum is transitioning to a PoS consensus. However, while it was still using PoW, it was the most popular blockchain for NFT minting, leading to concern and outrage over the increasing popularity of NFT projects.

As the Ethereum move shows, though, there are other options. Developers wanting to reinstill trust and confidence in the P2E crypto space need to focus on PoS-based blockchains, whether that’s the future Ethereum or existing PoS ecosystems like Solana.

Focus on Improving Gameplay

Another relevant criticism of the current P2E industry is that these games just aren’t fun to play. Developers in the past (and even in the present) argue that gamers are there to earn, not to enjoy the gameplay.

But that sentiment is shifting, especially as Web3 becomes more commonplace. In an increasingly crowded field, developers need to stand out, and the best way to do this is to emulate the success of Web2 games, notably in gameplay.

Most current games feature shoddy graphics and non-existent storylines, which do little to entice gamers to return other than the potential to earn money.

Savvy developers, on the other hand, are taking their time with their projects, preferring to focus on creating AAA-quality games with solid backstories. They’ve realized that the first out of the gate may “win” in terms of earning curiosity-seekers looking to make a quick buck, but it isn’t the recipe for an enduring project.

Alpha releases are starting to become the norm, as seen by projects like Wizardia and Mars4. And there’s also an increased focus on building communities within these projects. By getting feedback directly from the people who are invested in the game, these developers are making improvements and altering their roadmaps before launch.

Takeaway

Although P2E gaming may have hit a few roadblocks this year, the industry as a whole will recover with the right vision for the future.

But the projects that emerge victorious after the crypto winter will be the ones who ensure they’re on the right path from the get-go.

Burgeoning developers who focus on tightening their economies, staying environmentally friendly, and creating games users want to invest in are best positioned to lead the way for the future of P2E crypto gaming.