Following the rise and fall of play-to-earn games in 2021, a new generation of blockchain games is focusing on accessibility by utilizing a new “factory NFT” model.
The Present Situation of Crypto Gaming
Crypto gaming is at a fork in the road.
Last summer, the concept of “play-to-earn” gaming shook the crypto world, driving adoption and turning those who jumped on the trend early into millionaires. Axie Infinity, a turn-based role-playing game in which players battle squads of cute creatures called Axies for token rewards, was at its heart.
Axie Infinity’s popularity soared due to its tokenized incentives, which essentially allowed players to earn real money through the game.
For a time, players from developing countries such as the Philippines could earn many times the minimum wage simply by playing the game.
Axie Infinity’s moment in the spotlight, however, was brief. Although the game’s NFTs skyrocketed in value as productive assets, it quickly became clear that the game’s play-to-earn system was unsustainable.
The primary issue with earn-to-play games was their inflationary tokenomics.
In the case of Axie Infinity, the game was able to keep the value of its SLP reward token stable during its period of parabolic growth.
Existing players could use SLP to breed new Axies and make a small profit to support all of the new entrants.
However, once the flood of new players died down, demand for Axies and SLP plummeted, lowering the amount of money players could earn from playing.
The reflexivity of their NFT assets has also hampered play-to-earn games.
When people realized they could make a living off of Axie Infinity, the value of Axie NFTs skyrocketed (players need three Axies for the game).
As a result, the barrier to entry for new players increased, creating a negative feedback loop that contributed to the game’s declining adoption.
Learning from the mistakes of play-to-earn games, a new generation of cryptocurrency games is pioneering a new model.
This model, known as the “factory NFT” system in the blockchain gaming community, allows owners of so-called “genesis” NFTs to mass produce other NFTs and items required to play the game.
The idea is to divide a game’s NFTs into two categories: valuable productive genesis assets and inexpensive “replicas” that most players will use in-game.
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