Is the P2E Model Running Out? What is Next for Web3 Developmentby@mashabeetroot
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Is the P2E Model Running Out? What is Next for Web3 Development

by Masha BeetrootApril 28th, 2022
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On average, global gaming enthusiasts will spend 8.45 hours on various forms of gaming. With that personal investment, they would help the gaming industry earn more than $200B. The payback is the drive for achievement and the sheer fun and relaxation of gaming. Now, P2E games are trying to repair their balance and come up with a better mix between fun and real, monetizable payouts for achievements.

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On average, global gaming enthusiasts will spend 8.45 hours on various forms of gaming. With that personal investment, they would help the gaming industry earn more than $200B in annual revenues for 2021. Almost none of those revenues revert back to the chief drivers of growth- the players themselves. Their payback is the drive for achievement and the sheer fun and relaxation of gaming.

Enter play-to-earn, or P2E, an approach that promised to claw back some of the value of time spent gaming. This model performed brilliantly and briefly, proving unsustainable for two chief reasons. One was that the games pushed for an earnings-first approach, which turned the game itself into an endless grind. And second, the payouts were lower than expected, in the end discouraging users. Now, blockchain games are trying to repair their balance and come up with a better mix between fun, engaging games and real, monetizable payouts for achievements.

Why P2E is the Antithesis of Web3

The core of Web2 activity ended up being optimized for traffic. While this approach definitely produced value, it also streamlined anything from opinion to aesthetics, bowing down to the need of grinding out just the right activity to fit the algorithms. Web2 greatly increased user-generated content, but also left most of the earnings to a handful of big tech companies and platforms.

Web3 is a term ascribed to Dr. Gavin Wood, co-founder of the Polkadot protocol. The general idea is that Web3 would supersede the connected world of social media and curated content of Web2. Web3 was also supposed to use the decentralized power of blockchain structures. In 2022, some elements of Web3 are already in wide usage - the Brave browser and the MetaMask browser extension wallet. Contrary to Web2, the new technologies allowed the user to be paid directly for generating traffic and content.

The users of decentralized games are in the tens of thousands, bridging several blockchain protocols.

Games are the ultimate personal pleasure, tailored for stimulation and fun, so it was thrilling to expect an industry that would manage a double feat - a fun, connected experience that was also personalized.

Unfortunately, no such thing happened and players ended up obeying an even more restrictive demand. P2E games were optimized for playing at scale, quickly ditching the whole idea of putting the gamer first.

How Axie Infinity Turned into a Warning

A P2E game is, on the surface, a wonderful idea. Spend some idle time on your phone, accruing rewards that for some regions make up a neat monthly salary. That was possible for a while, courtesy of Axie Infinity, especially when the governance token AXS almost touched $160 and the reward token, Smooth Love Potion (SLP) was on a climb to its peak value above $0.30. Since the hot P2E summer of 2021, Axie Infinity never repeated that feat of high returns from gameplay, combined with windfall from selling rare playable Axies.

Axie Infinity still exists and evolves, but has reverted to a free-to-play mode and put its P2E balance back on the drawing board. Now, Sky Mavis has learned a lesson - the game grind was growing tiresome, and even exploitative. Instead of a vast network of small-scale players and their Axie teams, the game was strip-mined to secure earnings for a collection of big owners.

Those that had the capital to build guilds, secure powerful Axie teams and add a vast network of scholars could continue to eke out income, even as AXS and SLP prices continued to slide. But players that invested during peak times were left paying as much as $200 for basic Axies, not counting steep ETH transaction fees.

How to Solve the Problem: Bring in Play AND Earn

To solve the problem of the P2E race to the bottom of boredom, games must bring play to the forefront, and add crypto earnings only after securing a thriving game environment. Gaming that feels like a chore, with a preset requirement to participate in races for instance, will certainly make players hate the game. Initially, that hate may be mitigated by the payout, but P2E games already face problems with keeping up their token value.

A better approach is a casual game that can be taken up and dropped at any moment, while offering satisfying progress. Incentives take the form of achievements and quests or battles, with no minimum requirement to earn tokens at the price of mental health.

TimeShuffle is one of the upcoming games that watched at the sidelines as the P2E model faced the biggest challenges of retaining players and ensuring robust earnings. This game aims to put fun first, creating a no-pressure environment. When players advance, however, their levels and achievements are kept forever, and can be fed back into the game economy, actually helping for even more advancements and new features.

What TimeShuffle Changes to Build Play-And-Earn Economy

TimeShuffle starts out with a creative story of time travel, where two warring factions battle over control of the timeline. The battles are fought by a set of characters based on historical figures - you may meet Einstein, Cleopatra or Mary Curie, leveling up to surprising new forms and skills.

Time Shuffle will offer an entry point as a free-to-play game, where gamers will feel a sense of familiarity and will be gradually introduced to the NFT and token features.

For TimeShuffle, fun and personalized achievement is the game’s core and primary goal. Earnings will come second, when the player builds up achievements and generates unique playable characters. With entertainment as the primary function, the player will also have the option to tokenize their progress and mint valuable NFTs.

TimeShuffle solves the problem of having a productive in-game economy, which can give value for a play-and-earn model, without running the game into the ground. Traditional players need not be skeptical of blockchain games. The mission of TimeShuffle is to invite players to also join the crypto space with the lowest possible risk and with improved ease of use. TimeShuffle aims to speed up the integration of traditional gaming experience and tokenized value on the blockchain.

Genopets: Building Value with Move-To-Earn

Move-to-earn apps are a new model aiming to tap the physical world for the basic game mechanic that engages the player, but also creates a hard-to-fake input. Building on the success of fitness tracking, Genopets further gamifies movement and expands it into NFT and tokenization.

Genopets goes a step beyond fitness tracking, and ties up movement to a mixed quest, spanning the real and the digital. The game builds treasure hunt mechanics and habitats, similar to the Pokemon Go geotagging. To increase the appeal and build a sense of achievement, Genopets is a progressive game, again locking in personal achievement for each player.

Genopets, the game’s main monster characters, aso reflect this progress. Like Pokemon, the creatures go through a series of evolutions, with four stages (baby, young, adult and Mystic) reflecting their capabilities and upgrading potential. The game will also require time commitment and an element of surprise and rarity to produce value.

Game-First Approach: What's Next for Blockchain Games

Having a fun, appealing game is a sign that the project team is not abusing blockchain technology. Working on an appealing product with complex lore and mechanics is a sign that this game will not be another thinly veiled get-rich-quick scheme or even a Ponzi, with a bare-bones game as an afterthought.

Game-first projects also have a more conservative approach to NFT creation. For some games, the NFT sale is a big event, and then early investors get stuck for months, holding an image or a promise of a playable pet with no game in sight. Building the game and allowing players to first craft a character, ensure it is valuable and has use cases, and then mint an NFT if they want to preserve their character’s history on the blockchain.

Essentially, Web3 ideas want to put the decision power and value back in the hands of the end player. Game achievements and rewards are for the player, with no way to give unfair advantage to early buyers. The initial P2E model only took months to show it is not viable, and that the player base does not want to be optimized to support what amounts to a Ponzi structure.

With those lessons learned, blockchain games can now move closer to the Web3 idea and help create fun and the opportunity to exchange value without coercion.