Play-to-earn, crypto and NFT games

What you're actually buying

An entry stake: NFT characters (unique digital items recorded on a blockchain; Axie Infinity needed three of them, costing several hundred dollars, in 2021) and the chance to earn tokens that can be sold. What you hold is a volatile token and digital items whose value depends on new buyers arriving. Your earnings come out of the money later players put in.

How it works

Play-to-earn inverted the free-to-play trade. Instead of players paying real money for a virtual advantage, new entrants paid in upfront NFT purchases, or simply their time, to mine tokens that earlier adopters and guild managers could cash out. Players who couldn't afford the entry cost borrowed characters from managers and handed back commissions of up to 75% of their earnings. In effect, early players are paid from later players' money, so the loop only works while new capital arrives faster than new tokens are created. STEPN's developers later admitted the game needed 'a constant supply of new players' to survive. The real product was recruitment.

When it's fine

The wage model has no healthy form, and it should never be aimed at children. What survived has been rebranded as 'web3 gaming': asset ownership and trading, minus the promise of a wage. Judge it as a trading product, not as a game.

Where it came from

Axie Infinity's average daily players peaked at 2.7 million in 2021. Filipino 'scholars' who couldn't afford the entry cost borrowed Axies from guild managers; by September 2021 typical earnings had already fallen below the Philippines' minimum wage. On 23 March 2022 attackers drained the Ronin bridge of about $620 million, which the FBI attributed to North Korea's Lazarus Group. Axie's SLP token lost over 99% of its value after a July 2021 peak; STEPN's GMT and GST tokens fell more than 99.8% after peaking on 28 April 2022. By 2023 Axie's daily players had fallen to around 250,000. Ubisoft's Quartz NFT platform, bolted onto Ghost Recon Breakpoint in December 2021, sold roughly 15 'Digits' in total before support ended on 5 April 2022.

Rules and regulation

PEGI, Europe's age-rating system, rates games with cryptocurrency or NFT features PEGI 18 under its 2026 criteria.

Historical prices and revenues are in US dollars at the time unless marked A$.