Play to Earn is right, they did it wrong.
This is packed with my thoughts over the past 2 years.
"Ackchyually it’s play and/to earn/own…"
Don’t care, won’t care. We are talking about this concept: here’s a game, players are eligible to get something with monetary value from playing the game, and it’s legit - not grey market trades. Some would narrow down the term to describe games with on-chain rewards only, but putting rewards on-chain is only a versatile solution that solves other problems and opens lots of new possibilities for the game, not defining the play-to-earn concept itself - more on that later.
For those who are curious, the pivot from "play-to-earn" to "play-and earn" eliminates the implication of guaranteed payouts or profits, that adjusts player expectations and good for a list of legal reasons too. "Play-to-own" in my opinion is more like stating the obvious with same underlying concept from many other games out there - created from player actions or not, if a blockchain game’s rewards aren’t owned by players, that could only mean such rewards are not in decentralized form and they should really think twice why are they building a blockchain game. I don’t really want to judge too much here, so let’s not get distracted.
Play-to-earn isn’t new, at all.
Think about athletes.
Countries compensate Olympics medalists, like the U.S. is paying $15,000 - $37,500 per medal. Soccer leagues always going on and on. Horse racing events happening twice a week are gambler’s favourite in Hong Kong. People get good at sports, receiving sponsorships from governments and brands, winning prize money or said compensations. "Keep money out of sports! Sports must be done in their purest form!", said no one ever. At least not from the people I’ve met over the past 30 years, maybe from people who are against gambling, but never about cash prizes.
"But these aren’t video games!" Esports has entered the room.
"But we will never be pros like them!" Are you at least a bit better than some other people and don’t mind watching ads? Cash prizes games like hypercasual hub GAMEE are there for years, way before the term play-to-earn ever existed, even before blockchain and mobile games. As far as I could remember, circa 2000 there are PvP online quizzes with cash rewards that you must purchase game credits to play, and that game is not Who Wants to Be a Millionaire, just a very simple sub-1 RTP profit model.
This brings us to two types of play-to-earn: one being closed systems that pays players with what they’ve paid, where RTP is usually the key; open systems takes the prize money from somewhere else too, blurring the line of investment-returns for both game hosts and players. These two are proven somewhat sustainable in many ways, and "get good get paid" isn’t evil at all.
Now we put the sinister "blockchain" back into the equation.
Wait what? So blockchain is the poison to play-to-earn? Let’s quickly go through some common conversation enders: because they are ponzis, greedy teams dishing out cash grabs for speculators without building the game, whales control token prices…but the thing is, most of the accusations towards blockchain are probably irrelevant to how good or bad a play-to-earn is, even not much to do with play-to-earn itself.
Look, blockchain didn’t invent ponzis. Ponzis thrive on blockchain nowadays because this new world lacks regulations and has no geographical barriers (but rewards in play-to-earn are accessible to anyone for the exact same reason). I wouldn’t spend more time on criticizing ponzis or any forms of scams here because we are talking about how to do things right, that would take a lot more than "don’t be a scammer". You are not the only one witnessed the fall of ponzis, so did all the developers working on their blockchain titles over the past 2-3 years.
If play-to-earn’s off-chain counterparts work, it is reasonable to think the same could work on-chain, like GAMEE already has this on-chain sister app Arc8, ads-free and mainly runs on a sub-1 RTP model.
"Crypto is not money!" most of the times players can still exchange their rewards on-chain for fiat, because the crypto market is still there. Like it or not, it doesn’t break the "monetary rewards" statement.
"Blockchain games are just devices of speculation with no gameplay!" They can have good gameplay too, and whether NFTs/tokens are for quick bucks is more about game economy design, part of the reason why I’m writing this. Just because the horrible ones are flooding the market now, doesn’t mean there aren’t good ones on the way, taking both time and experience to develop (forgive me for not bringing up more names here, if you understand). Good gameplay alone probably won’t earn play-to-earn a good name in the next 1 - 2 years though, as long as the knee-jerk reflex against blockchain is still there.
Ye olde "keep crypto/NFTs out of games" shouts often mean "keep money out of games" like back in Diablo 3’s auction house fiasco, or pay-to-win in freemium models. Basically, people have legit reasons to hate progress purchasable with money, but that “purchasable progress" isn’t always present in every play-to-earn (on or off-chain), again heavily depends on design.
So, hope that I’ve proved a self-sustainable fun not-ponzi not-scam play-to-earn game is possible, and blockchain can’t ruin it with the tech alone.
But we aren’t done here.
Just because such games are functional, doesn’t mean that the must of play-to-earn is automatically justified, or utilized in the best way possible. We probably shouldn’t be too harsh to "functional" play-to-earns when they are not harming anyone, but they aren’t the killer use case yet. Play-to-earn is the most ambitious attempt on combining external drive of rewards and internal drive of fun, it should hold much more potential than what we are seeing now. So how do we make better play-to-earns, and what would that holy grail look like?
Let talk about rewards in games.
Mystery box gives you a coin or a power-up when Mario hits it. Bricks are only worth 50 points when broken, but a few of those give you good 10 coins if you can find it and keep bumping fast enough. From the game god’s perspective, we want to reward players for jumping accurately and exploring actively (later for memorizing levels). Games are built on a set of rewards and punishments.
Now back to the definition of play-to-earn: play the game, you may get some rewards with monetary value. But why monetary? Short answer is nobody ever said we can’t, it is just that 99% of games we have now are built as completely closed systems so real life problems can’t touch it a bit. Once your action has created value more than an arbitrary score that no one else really cares, it makes sense to be rewarded externally.
This introduces two questions:
What kind of value has been created by players?
Who is going to benefit from the value created?
Or boil these down into…
What’s in it for who?
Athletes are rewarded for being good at the sport. They inspired other younger athletes, boosted morale of the whole country, even created some greatest achievements of the mankind. Esport players bring entertainment, generates income for the game from ticket and merch sales, attracts new players to the game. Arguably, they are creating value for the game developer and community only, but that’s still not a small group. These two are probably not the most inclusive examples because there can only be so many winners in the top place, practically not play-to-earn for 99% of us.
Let’s talk about the everyone examples, from worst to better.
What you do isn’t creating value for anyone at all, but you are getting rewarded anyway - imagine logging in daily to click on useless buttons, that won’t even become useful gameplay data for development. Usually comes with upfront payment like "buy this for $1000 and get $1500 if you keep playing daily" straight up ponzis "invite 5 new subscribers to get $50". I said I’m not gonna roast scams here so you can do that for me.
Loots tradable in real-money auction houses or as NFTs are valuable to players only, heavily depending on market demand. If sinks are not designed properly, inflation will easily send this kind of games down a death spiral. When the rewarders and rewardees are from the same group, it will also be very easy to calculate return on investment (ROI), favouring farmers that aren’t here for the gameplay at all, causing conflicts with the gamer kind.
Using ads and sponsors as income source and redistribute part of the profit in the form of reward: it is still dependent on number of players and revenue share from advertising platforms, more sustainable than taking from the players themselves. Value contributed by most of the players is in fact attention to the products or brands being advertised, player performance only acts as a multiplier and the difference of payout is more about boosting competitiveness among players than value generated, meaning that the reason of earning and action towards earning can be disassociated at some point.
If you are familiar with play-to-earns, you can try filling the blanks for them too. To unlock the true potential of play-to-earn, the hardest part isn’t just about how sustainable it can be, or even how good the gameplay needs to be, but creating value for something greater.
We are far, far from a play-to-earn that anyone can join, generate something meaningful to the real world, and get paid directly because of what’s being contributed. Yea I know, there is this awesome invention called work where you create value bigger than your pay check, if you are a doctor or researcher you are helping everyone too, kinda perfect except it’s not fun at all for most of us.
Okayyyy I’ll see myself out.
…and back with the closest thing that is open to everyone, and produces something for everyone.
Games that create value for everyone? That is a thing?
Yes.
It might sound too good to be true and looks kinda ugly…but hey, this game was released back in 2008 so it’s 14 years old already, and it is probably one of the most legit video game in the world.
Did you know that there is at least one thing human gamers are better than computers? Protein folding. It isn’t about shakes and chicken breast, but potential cures of numerous diseases. This is why researchers created Foldit to invite gamers over for amino acid puzzles much harder than an over-boiled egg. It is one of the most cited example of gamified crowdsourcing. There are also privately owned ones, like the now discontinued Tomnod asked the public to identify objects of interest after the MH370 accident. Gamified crowdsourcing can bring value that can even benefit the whole world, yet it is still fun. I mean, reCAPTCHA digitized so many books but it’s more like us being played and none of us had fun, so we are not inviting them to the party here.
Instead, we should invite blockchain to the holy grail.
Gamified crowdsourcing has existed peacefully before blockchain play-to-earn right? Why bringing in the rewards now? And why it has to be on-chain?
Because contributors deserve rewards, at least a token of appreciation.
Folding @ Home helps folding proteins too, but instead of running on your brain juice, it takes computational power of your PC. You can join teams and contribute your points to the team, competing for the top place that rewards you…nothing. Some hoomans started the Dogecoin Folding @ Home initiative, collecting dogecoin donations and redistribute them to those who contributed points on behalf of the team. I don’t need to sign up with PayPal, the good hoomans don’t have to know my bank account number either. The sum is tiny, but workable.
Blockchain is one of the most frictionless ways to distribute rewards. The lack of funding or manpower, the complexity of rewarding based on contribution…many of these factors that held us back from paying contributors, can be solved by blockchain.
Now imagine this blockchain version of Foldit.
I created this folding solution, it gets minted into a NFT containing the details, permanently stored on-chain even if one day the research gets shut down completely. I can choose to redeem rewards with these NFTs. One day one of these solutions becomes a cancer cure, I can start an auction of the NFT, part of the royalties from the sale goes back to the research team, or if I feel like so - all the proceeds can be donated to the team too. This record of discovering a cancer cure is tied permanently to my wallet, possibly my real life identity too.
"Where do the rewards come from" you ask? Instead of single source of research funding, anyone can be a patron, best part of it is all players are incentivized to get new patrons. On-chain records will prove I am one of the best solver in the world, I can look for backers to donate on top of the redeemables, and my backers will get some bragging rights too. Instead of donating money, companies can offer cash vouchers or in-game items instead. Such prizes will go into a treasury wallet that the contents will be fully visible to everyone, there can even be a community report mechanism to remove expired or suspicious prizes. Each prize can be redeemed at a fixed cost of several NFTs, or enters a lucky draw pool.
"Where is the worthless pump and dump token?" Nobody ever said we need that token at all, but if you think it really is a must: airdropped based on contribution only, limited liquidity, buy-and-burn as monetary contribution…I still think it’s not intuitive and not as cool as "Cancer Cure N-45678" with a 3D model linked to the metadata. But who knows, another game another story, there is probably one that is easier to manage with fungibles.
Of course, not all of them will be perfect.
Here are a few problems I can think of when combining play-to-earn with gamified crowdsourcing. Doesn’t mean they are unsolvable, but worth considering.
AI is getting better and better, meaning the fields that are once economical to crowdsource could be done by AI instead. DeepMind has already made its leap in protein folding, we could run out of ideas of stuff that can be crowdsourced, let alone gamified. There might be still a layer that we are not crowdsourcing the solution to the problem itself, but the most efficient solver, like an AI arms race for everyone.
Connecting games to the real life could also mean bringing in real life operation problems. What if technical support calls are overwhelming? How about exploits and cheats?
All the blockchain mess we have now until blockchain is common and secure enough. The inevitable clueless speculators? You said tokens are volatile so you want to switch to USDC? SEC would like to have a chat. What if a hack to the treasury wallet or smart contract takes everyone’s cake away?
Do external drive and internal drive work together to better motivate players, or external drives will screw up internal drive completely, like a fine to discourage late picking up of kids at daycare centers only made it worse? There are probably some scenarios that don’t matter, but some others should offer nothing more than gratitude?
What if the topic to be crowdsourced is unethical, like the most effective strategy at war?
I’m not looking to provide a blanket solution here. I believe we should all explore together and find out.
Wrapping it up…
Not every game should be play-to-earns, and if I haven’t made it clear enough, not every play-to-earns can become holy grails that benefits greater good, and that’s fine. Before some of you panic about every game on Earth will turn into blockchain games that one point is no longer just one pointless point in a sealed box, remember mobile games didn’t kill consoles, Candy Crush grandmas are also players, and orthodox "gamers" aren’t even the majority like you thought. Games and play are much bigger concepts that many of us are still curious to explore, you can’t stop us from trying to play DOOM on a 3D printer. Blockchain is just one of them with the greatest possibilities that unfortunately has a bad name now, and there are people trying to fix it.
One more thing before you go.
The contents of this post is on chain too. Before I clicked publish, I packed all the contents in a transaction sending from and to my own wallet, creating a permanent record with all the typos I didn’t correct. Go to this link → Click to see More → View Input As → UTF-8. (Mirror puts blog posts on chain too, but the text editor is not as good as Substack)
I know for some of you many of the concepts in this post are totally unheard of, even confusing - aren’t blockchains burning down forests? Aren’t NFTs just monkey jpegs you can right-click save? And what do you mean by creating a permanent record of this post with a transaction? The lack of common ground based on knowledge is exactly why discussion of blockchain games often fall back to shouts inside our own echo chambers.
I’m here to build that common ground.
This is the longest piece I’ve written in English in years (except design documents), so here are some more orange buttons that will make me happy if you click them: