Play to Earn: Expanding the Gaming Industry’s Horizon

2024-03-12, 07:57

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## [TL; DR]
In 2023 the video gaming industry was valued at $165 billion.

Games Store, Google Play Store and AppStore are examples of traditional gaming firms that entered into web3 gaming in 2023.

The advancement of the blockchain technology will help eliminate several challenges the sector faces such as high transaction fees and scalability issues.

## Introduction 
The emergence of the play-to-earn (P2E) model has changed the world of gaming through several ways. The potential for players to earn digital assets has made the web3 gaming sector to become popular.

As the gaming ecosystem continues to evolve and shift towards a more decentralized future play-to-earn games will likely play a major role in the entertainment industry.

In this analysis, we look at the current gaming environment and the reasons behind the popularity of blockchain based games, especially the play-to-earn ones. We shall also identify the leading P2E gaming protocols.

## Current State of the Play-to Earn Gaming Sector
The blockchain gaming sector is likely to improve from its recent state that started in 2022 and continued through 2023 which led to a decrease in its total market capitalization. In fact, in 2023 over 23% of emerging blockchain games discontinued due to financial distress.

One reason many Startup web3 games closed down was limited sources of income. Usually, their non-fungible tokens are sold on secondary NFT marketplaces which puts a constraint on their financial inflows. Also, the prolonged crypto market resulted in very low NFT trading volumes.

What exacerbated the situation is the long development cycle for crypto games which often consumes much financial resources yet bringing in limited inflows until they are well-established and recognized in the market. Sadly, very few games reach that stage.

Despite the challenges the NFT crypto gaming sector faced during 2023 there were many positive developments. For instance, the blockchain gaming sector attracted much investment. Interestingly, in 2023 several traditional gaming firms like Epic Games Store, Google Play Store and AppStore got involved in blockchain gaming, indicating the merging of web2 and web3 ecosystems.

In the future such a development will attract tremendous investment in the sector as other traditional gaming giants will be enticed to join the sector. Already, during 2023 blockchain gaming had a 34% average dominance of dApp activity.

Likewise, during the fourth quarter the sector attracted a high number of unique active wallets (UAW). For example, the average daily UAW count reached 1.1 million, indicating the growing engagement and enthusiasm in the NFT crypto gaming sector.

As per [DappRadar report](https://dappradar.com/blog/dappradar-games-report-2023-overview "DappRadar report") $2.9 billion was invested in 163 blockchain-based games and metaverse projects in 2023. However, there was a significant drop in both the invested funds and number of new gaming and metaverse platforms. As a fact, there was a 62% drop in the invested funds and a 19% in the number of new projects.

## The Future of Play-to- Earn Games 
We have briefly looked at the state of the blockchain gaming sector, based on what occurred in 2023. Now, we want to focus on the future of the sector.

As mentioned above, the gaming sector is growing and is attracting many projects and users. As the gaming technology improves it will lure more people to participate, as developers or players.

What the gaming sector is looking forward to is a rise in its adoption rate. As many people come to understand the blockchain technology and the role of digital assets in the economy they will definitely participate in crypto earning games. As well, the increase in the number of developers and players will spur innovation and growth in the industry.

We also anticipate that developers will be able to create more engaging and fun games which will attract many gamers. If playing to earn NFT games become more adaptive, captivating and user-friendly, they will likely attract many people to participate.

The advancement in the blockchain technology and increase in expertise will also help to solve the key challenges that affect play to earn NFT games. For instance, layer-2 solutions and sharding will help to overcome the problem of scalability which many gaming platforms encounter. This will make trending blockchain games more accessible to a wider audience and enable faster as well as cost-effective transactions.

As per [Techopedia article, Timsit said](https://www.techopedia.com/the-future-of-play-to-earn-crypto-games-burnout-or-revival "Techopedia article, Timsit said"), “The combination of improved UX, lower fees, and innovative in-game token models could propel blockchain-based games back into the limelight in 2024.”

As competition heats up it is more likely that developers will do much to inform their audience about their key gaming protocol features which will lure more players to the sectors. As soon as the developers become more active in painting an attractive picture about blockchain games their audience will expand.

As previously explained, many traditional gaming firms recently joined the web3 gaming space. This means we are now on track to witness the merging of web2 and web3 gaming features. As such, many gamers may switch from web2 games to play to earn games. The fact that there is an opportunity for people to earn rewards will likely attract many people to switch over from web2 games to web3 ones.

Again, in an interview with Techopedia, the president of the Blockchain Game Alliance and [Sandbox co-founder, Sebastien Borget, said](https://www.techopedia.com/the-future-of-play-to-earn-crypto-games-burnout-or-revival "Sandbox co-founder, Sebastien Borget, said"): “We are seeing Web2 publishers launching blockchain games, Web3 games are becoming more seamless due to the advancements in infrastructure and tooling, and more immersive and fun experiences than ever before. It is a strong use case for blockchain technology and has the potential to empower creators across the globe.”

## Play-to-Earn Games Market Capitalization and Predictions
Analysts in the GameFi sector forecast that there shall be a bull market in the blockchain gaming sector in 2024 which should lead to an increase in its total market capitalization.

In general, the video gaming sector has grown from $59 billion to $165 billion in 40 years, indicating a strong possibility of sustained future growth. More significantly, it is forecasted that the video gaming sector will grow to $474 billion by 2027.

Techopedia quoted [Cronos Labs’ Timsit as saying](https://www.techopedia.com/the-future-of-play-to-earn-crypto-games-burnout-or-revival "Cronos Labs’ Timsit as saying"), “On the <a href="/uk/price/cronos-cro" target="_blank" class="blog_inner_link">Cronos</a> network, we are expecting that Web3 games will start expanding from their core community of early adopters and start acquiring mainstream users this year.” The same trend should occur with the different leading gaming blockchains including <a href="/uk/price/solana-sol" target="_blank" class="blog_inner_link">Solana</a> and <a href="/uk/price/ethereum-eth" target="_blank" class="blog_inner_link">Ethereum</a>.

## The Most Popular Play to Earn Games Nowadays
Currently, there are hundreds of blockchain based games [with different play to earn mechanisms](https://www.gate.io/learn/course/p2e-fundamentals "with different play to earn mechanisms") and ways to earn rewards. All that the gamers have to do is to research and [choose the top P2E games they want to play](https://www.gate.io/learn/articles/top-10-best-play-to-earn-web3-games/1515 "choose the top P2E games they want to play"). Let’s briefly look at some of the leading play–to-earn games on the market.

<a href="/uk/price/axie-infinity-axs" target="_blank" class="blog_inner_link">Axie Infinity</a>: This is a blockchain game that entails breeding, training and battling digital creatures [called Axies](https://www.gate.io/learn/articles/what-is-axie-infinity/148 "called Axies"). The players can buy and sell in-game assets that exist in its marketplace. As such, they can earn cryptocurrencies which they can easily convert to cash.

Alien Worlds: Alien Worlds is a popular blockchain-based NFT card game where players can mine resources, battle enemies and trade in-game assets. Also, the players can earn its in-game currency called Dark Energy Crystals (DEC) which they can convert to other cryptocurrencies.

Gods Unchained: This is another blockchain-based card game that enables the players to earn rewards when they play and win matches. It has its marketplace where the players can buy, sell and trade in-game assets like decks and cards.

<a href="/uk/price/decentraland-mana" target="_blank" class="blog_inner_link">Decentraland</a> and Sandbox: These are immersive blockchain games to earn money through exploring their virtual worlds. The gamers can construct virtual buildings and share their life experiences. Thus, they can earn and sell their virtual assets and cryptocurrencies.

Read also: [The Best NFT Games to Play Right Now ](https://www.gate.io/learn/articles/top-best-nft-games-blockchain-gaming/1309 "The Best NFT Games to Play Right Now ")

## Conclusion
Play-to-earn games, which are digital games based on the blockchain, enable the players to create virtual assets which they can trade. Most of these games are immersive and have marketplaces where users buy, sell and trade in-game assets that exist in the form of NFTs. The video gaming sector is expected to grow and have a market capitalization of over $474 billion by 2027.

## FAQs about Play-to-earn games
### What is the best play-to-earn game?
Based on data from CoinGecko Gods Unchained is the best play-to-earn game at the moment. Nonetheless, there are other well performing P2E games such as Gala, Sandbox, Axie Infinity and Decentraland.
### What is play-to-earn gaming?
With play-to-earn gaming the players have a chance to earn in-game assets in the form of non-fungible tokens which they can convert into cryptocurrencies. In some cases, the players can earn crypto assets as rewards for their gaming efforts.  
### Is play to earn legit?
Many play-to-earn games are legit as they enable players to earn digital assets that have real world value. Nonetheless, like several blockchain projects, some games may not be legit if the aim of the developers is to swindle funds from unsuspecting individuals.
### Can I make money by playing games?
Yes, you can make money through playing games if you acquire the right skills and put in much effort. However, you need to do your own research before you invest your money and effort in any blockchain based game that uses the play-to-earn model.
### What is the highest playing to earn game?
Some of the highest play-to-earn games are Gods Unchained, Axie Infinity, Sand Box, Splinterlands and Green <a href="/uk/price/bitcoin-btc" target="_blank" class="blog_inner_link">Bitcoin</a>. It may be difficult to pinpoint one play-to-earn game that pays the most since the amount of money you earn also depends on other factors like your skills and effort.

<div class="blog-details-info">
<div>Author:** Mashell C.**, Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
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