In a New Year celebration letter, Yosuke Matsuda, the President of game developer Square Enix, mostly known for the Final Fantasy game, said the company believes in the potential of in-game tokens and in play-to-earn economies. In the coming year, Mr. Matsuda predicts increasing ways to reward players, such as through creative contributions to the game as opposed to just playing. He also acknowledged the bubble in non-fungible token prices.
Despite the increase in popularity in play to earn games, the enthusiasm has come mainly from blockchain enthusiasts and emerging players that were a niche of consumers before the earning feature. There has been a backlash from mainstream gamers over the play-to-earn concept. They see the goal of gaming as fun rather than money-making. To date, players of one of the biggest blockchain games, Axie Infinity, earn money by farming in-game objects. And that farming process is through gameplay such as fighting monsters or other players and completing quests.
Matsuda predicts that if gamers have the opportunity to earn by creating in-game content, it will invite mainstream players with a stronger passion for the game itself rather than the earning component. This is because among the players who are resistant to playing to earn, there are those who “play to have fun” and those who “play to contribute”, meaning that they want to help make the game more exciting. If the opportunity to create is combined with the ability to earn, some of the resisting players might give these games a chance.
“By designing viable token economies into our games, we will enable self-sustaining game growth,” said Mr. Matsuda. “It is precisely this sort of ecosystem that lies at the heart of what I refer to as ‘decentralized gaming,’ and I hope that this becomes a major trend in gaming going forward.”
If players can earn through both playing or creating, there will inevitably be a disparity in the kind of audience that these games will attract, as some will be looking to explore their creative side while others will be looking to use their gaming abilities to make a profit. With two different kinds of earnings, game developers will have to be thoughtful of the kind of rewards structure they set up to keep all the types of players happy. On the other hand, they could focus the earning aspect for creators only.
Of course, not everyone will welcome changes with open arms. Some players strictly just want to play for fun. As earning becomes a potential motivation for participating in the gaming industry, it will create different market segments. The target audience for play-to-earn games may differ from conventional games.
Meanwhile, IMVU, a metaverse-like platform launched in 2005, enables users to create in a similar way to Mr. Matsuda’s description. Creators can design clothing and objects for the metaverse and sell them to other players. Last year it launched its own fixed-price tokenized in-game currency as an alternative to in-game credit, and it can be cashed out. Perhaps due to its fixed price, it received a no-action from the SEC, meaning it is not classified as a security.
Other developments in the play-to-earn industry involved Animoca’s partnership with the Bored Ape Yacht Club, Metasoccer’s plan to launch a virtual soccer league, and Mythical Games’ $150 million funding at a $1.25 billion valuation.