Play-to-earn games attract attention because players can “earn” money. Unfortunately, these titles have skewed economies and tokenomics, resulting in unsustainable projects. The focus may need to shift to play-and-own, giving players more incentive to commit for the long term.
Play-to-Earn Is Flawed
The appeal of play-to-earn games is tangible, although it has a few drawbacks. Nearly all these games require an upfront investment to play. Titles like Axie Infinity offer scholarships to negate that cost, yet it also slashes one’s potential earnings. Rewards will be split with the owner of the scholarship assets. Even so, that is not the biggest problem these games face today.
Creating an environment where players earn virtually limitless rewards is not sustainable. Granted, most will try to sell off assets to recuperate their initial investment as quickly as possible. However, they will keep earning rewards afterward, which will likely end up on the secondary market.
If there isn’t sufficient demand for these assets, prices go down, earnings drift lower, and players need to sell more assets to make money. It is a vicious circle that spirals out of control quickly and can quickly destroy a play-to-earn economy.
Moreover, there isn’t necessarily an incentive for players to remain engaged in play-to-earn titles. With rewards losing value every day, grinding these games becomes a job.
That is not what video games are about, resulting in steep player dropoffs over time. Moreover, new players will see less room to make money and move on to other titles. Without cutting emissions and ensuring rewards are used for in-game purposes first and foremost, there is no sustainable future for these titles.
ICE Poker Goes A Different Route
Decentral Games, creators of ICE Poker, initially embraced the play-to-earn model. That changed a few weeks ago when the game pivoted to play-and-own. The primary objective was to reduce ICE token emissions, which have dropped by 55%. Secondly, delegated players – representing 90% of the player base – no longer receive ICE rewards directly. Instead, they earn “banked ICE”, which they can spend on in-game wearables to enter poker tournaments.
To be precise, players can convert “banked” ICE to the real token. However, it incurs a 70% penalty on holdings and requires a threshold of at least 6,666 tokens. There is more incentive to upgrade one’s avatar and play tournaments rather than focusing on the ICE rewards. Moreover, it allows ICE Poker to become player-owner-based and fuel long-term commitment. Removing the ongoing value extraction from the equation is crucial to achieving economic sustainability.
Changing Emissions Is Beneficial
Most would think the community does not like such an approach. Intriguingly, the ICE Poker community wants more incentives like these to ensure the game has a viable long-term future. Additionally, players have been burning “banked” ICE left, right, and center to enter tournaments and earn rewards. A recent “Super Shine Friday” event yielded the highest amount of ICE burned in a single day. Players spent over 1.35 million tokens on adding wearables and other upgrades.
That day saw more tokens burned than the current daily emission of ICE, which hovers near 1.28 million. It is an excellent example of how players will burn in-game earnings if they can reap long-term benefits. In addition, Decentral games buy back tokens through native earnings to further create sustainability.
Unfortunately, such a long-term mindset is absent in nearly all play-to-earn titles, but it is not too late for projects to embrace a play-and-own focus. Introducing effective token sinks generates value for holders, a concept found in most traditional online video games.