The Metaverse is a nascent worldwide virtual shared space formed by the convergence of virtually enhanced physical reality and physically persistent spaces, including the sum of all virtual worlds, augmented reality, and the internet. It is a web of fictional universes whose concept and existence serve as the foundation for Web3 social, competitive, narrative, and role-playing game settings.
Within the Metaverse, we’re seeing traditional models of social interaction, economics, and gaming begin to merge, blend and evolve. The Play-to-Earn business model is a new trend in the gaming industry. It embraces an open economy and pays out monetary and asset rewards to players who provide value to the game world by creating content, engaging, completing quests, and being a part of the world.
The basis for this gameplay concept is to allow players to generate value based on how much time and energy they are willing to invest in the game. This kind of income is derived from various activities such as mining ores, gathering resources, making recipes, etc.
The earning potential comes from developers building the games with a core vision of an open economy, then integrating players into that economy by allowing them to earn cash for their time and talent, with devs retaining some royalty rights in secondary sales, or taking a percentage of the secondary market through commissions.
There's no secret why companies have started using this model; they're looking for new ways to monetize their products by allowing users to gain by enjoying their new worlds. It's likely to bring creative gaming concepts and retention tactics that haven't been seen in modern games.
Gamers' control over in-game assets and the ability to increase their value by playing actively are two critical elements of the play-to-earn business model. Players are creating value for other gamers and developers by participating in the game's economy.
Play-to-earn returns gaming to the gamers.
It's an inversion and rejection of the exploitative Loot Box mindset, where players are encouraged to spend more and more real-world currency to generate in-game currency and purchase ever-more-powerful upgrades, weapons, and tools that help them succeed.
These real-world currencies can be used in exchange for goods or services within the game, allowing developers to upsell virtual items to users who are already emotionally invested in their world. This naturally creates an uneven playing field, turning games into gambling experiences and paid interactions that eschew the spirit of gaming in favor of base monetization.
Even if players can unlock new content by spending real money on Loot Box microtransactions, they're still unable to partake in many parts of the game. So long as users are confined by specific boundaries, developers can continue to sell them on purchases that increase their overall level of play.
The reasons why companies are transitioning to the new economic model (where users can actually earn in-game currency and purchase items with it) are pretty straightforward: people like the idea of trading digital goods, but they hate feeling trapped, manipulated, and taken advantage of.
In a Play-to-Earn experience, the currency is generated by the players' time and talents invested in the world. They're free to play it as much or as little as they want, unlocking new items and activities at their own pace. This is the perfect path for game companies looking for ways to go beyond traditional IAP models.
This kind of framework succeeds because it empowers players to be responsible for their own success and gives them an incentive to put in the time and effort required to make themselves powerful. It also provides an excellent incentive for players to create, build up their own assets, and contribute to the betterment of the game world.
The new business model encourages game companies to focus on long-term usage and retention, ensuring that their users don't get tired of using the product. By creating an experience where players are uniquely rewarded for participating in the game's economy, developers can foster increased engagement and satisfaction with longer-term gameplay opportunities.
All of the items obtained in a session have monetary worth. So if a player defeats 10 enemy avatars and gets 3 items, each with $0.50 worth, they would have $1.50 in their pocket after the session is over.
If users earn assets by participating in activities that benefit others, such as mining for ore and sharing it with crafters who use it to make equipment, they can use that currency to purchase items or directly impact their progress. If users can sell their items, they will be motivated to play based on personal gain rather than playing time - allowing developers to incentivize players for long-term engagement instead of merely creating content.