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Newzoo on the evolution and future of play-to-earn

A new report delves into the play-to-earn market, and discusses how it may evolve
Newzoo on the evolution and future of play-to-earn
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A new Newzoo report has delved into the play-to-earn market.

From its beginnings in RuneScape and World of Warcraft, where professional “farmers” gather and sell in-game gold for sale on third-party websites – at risk of being banned or having their accounts suspended – the play-to-earn model has evolved into a legitimate branch of mobile gaming.

The rise of blockchain has made play-to-earn not just more common, but more lucrative. Now, rather than being an unsanctioned approach to gaming, the monetary gain is a primary – and often the only – incentive.
However, Newzoo argues that this model is unsustainable. Like a ponzi scheme, “Once player growth stalls and new players stop joining the ecosystem, the in-game economy would crumble.”

P2E game makers are faced with the challenge of creating a game which is both sustainable and accessible, and thus far publishers have found a solution. As such, no game has successfully brought P2E to the masses.

Newzoo states that the metaverse could offer a solution to this. As the metaverse continues to evolve, rewarded play is “likely to accelerate and evolve beyond the past and current forms of P2E.” In fact, the report states that “finding ways to sustainably reward this engagement is a necessary element if the vision of the metaverse as an alternate reality version of reality is to become true.”

Looking forward

Newzoo also state that it’s likely that the P2E model will expand towards a “play-to-own” model, with rewards such as fiat currency, real-world goods, and interoperable and tradable in-game items.

The report notes that one of the key challenges faced by P2E titles thus far has been striking the correct balance between “play” and “earn”. Finding ways to reward users could increase average session time and retention rates, benefitting both parties. However, most publishers lack experience in supplying such awards.

Collaborating with a gCommerce platform such as Scuti can cancel out the downsides of blockchain gaming, such as the volatility of in-game earnings, as well as the accessibility issues of traditional MMORPG’s which require a sizable time investment, meaning that any play-to-earn aspects are only available to the most skilled players.

gCommerce platforms seek to democratise access to rewards while preserving an enjoyable experience forall players. Players can earn in-app tokens in-game, which they can exchange for assets across any games on the same gCommerce platform, benefitting them and keeping engagement high. Players can also use these to purchase branded physical or digital goods.

In the case of Scuti, players are rewarded for their purchases, earning up to 5 percent of the retail price from purchasing physical goods on the markterplace, with game makers receiving a share of the profits. This allows developers and publishers to tap into the eCommerce market, currently valued at $4.9 trillion.

The report states that the advent of in-game commerce “presents a sizable and revenue-generating opportunity for (non-endemic) brands” Virtual world activations, branded in-game skins, and NFT collections can be viable strategies for brands hoping to create a metaverse presence, allowing them to sell goods directly to players. 

“Most people already shop online – gCommerce platforms simply change the channel through which they do so, from traditional eCommerce websites to in-game marketplaces.“

In June, Newzoo broke down the ten key trends of the future of the metaverse.