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Play-to-Earn or Play-to-Own: What’s the Difference?

Posted July 8, 2022 5:35 pm
4 min
By Frederico Aranha

Looking back at early 2013, I finally saved up enough money to purchase a new graphics card to start playing Diablo 3. What a wonderful moment that was. The long-awaited third installment of the world famous Diablo franchise, was finally within my reach. 

The game brought along a feature called the Real Money Auction House, which offered players the chance to own their in-game assets and earn money by selling them – long before the existence of Non-Fungible Tokens (NFTs).

However, the experience didn’t turn out well, leading to the Auction House being taken down, and so was my first trial at a “Play-to-Own” game. But what does that have to do with crypto, Play-to-Earn, and Web3 gaming as a whole? Everything! 

From 2018 and onwards, game projects began to surface with a single promise: to offer players the possibility of earning real money through gaming. Known to many as NFT games, they skyrocketed in popularity like wildfire. In fact, in Brazil 2022, the largest country in South America registered six out of ten Google searches were focused on NFT-based games when researching crypto projects and assets. 

Such games became known as “Play-to-Earn,” or simply “P2E.”

The Concept of Play-to-Own

Let’s track back to Diablo 3 for a bit. One of the main reasons behind the demise of the Real Money Auction House was due to the majority of players focusing their efforts on buying and selling their in-game items rather than actually playing the game. 

This killed the grind to find relatively good items, with players resorting to the easy way out of flat out buying them; this veered the game away from its fun aspect, and became a means to an end: making money. 

Yet, Diablo 3 didn’t have an in-game inflationary token offered as a reward to players, nor a governance token alongside it. The game was merely about offering players the possibility to sell items farmed while playing. 

In this sense, Diablo 3 was unofficially one of the first “Play-to-Own” games in the market, without Web3 infrastructure.

The main characteristic difference between Play-to-Earn (P2E) and Play-to-Own (P2O) is that players of the former receive a certain amount of in-game tokens/rewards for performing a certain action(s). 

Categorically speaking, P2E players are rewarded with an in-game token that is also inflationary – the more the game is played, the more tokens are minted and rewarded –  while having in-game utility. However, without new players joining the game, the token quickly loses value. 

Meanwhile, P2O games focus on offering ownership of in-game assets without rewarding players with in-game currencies. 

A Line in The Sand

In between P2E and P2O, there is an aspect of “play-and-earn,” which is where the majority of Web3 games are now attempting to readjust their economies to be more balanced and even deflationary.

Fast forward to 2022, and we find ourselves in the middle of an everything bear market – not solely around crypto.

The collapse of LUNA sent shockwaves across the industry, affecting a large proportion of the crypto industry. For now, the party is officially over, with numerous projects, people, and companies left suffering huge losses. 

However, like past crypto cycles, dev teams are still building. In fact, we’re still seeing teams launch new games on a weekly basis. Because of this, we’re still in the experimental phase of Web3 gaming in terms of tokenomics and game mechanics. 

With that said, will play-to-earn economies continue to fizzle and how will P2O games adjust their strategy? Can gaming studios find a sustainable mix of fun and monetary value creation?

As more and more large studios enter the space, new advancements will be made with incorporating Web3 infrastructure into gaming. I’m excited to see how that plays out. 

One thing is clear from my experience with Diablo 3: combining fun and ownership in a sustainable way is the elusive goal. To that end, games will need to keep experimenting until they find that perfect recipe.

If you want to keep on learning about P2E games, read the following aticle:
“Play-to-Earn Gaming: The Birth of a Sleeping Giant”.

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