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#Post#: 747--------------------------------------------------
The History of Gaming — From Pay-to-Play to Play-to-Earn
By: boaza jakina Date: February 24, 2023, 8:48 pm
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The History of Gaming — From Pay-to-Play to Play-to-Earn
Until recently, games were split into two main models of
monetisation: pay-to-play and free-to-play. However, a new model
has started to emerge, dubbed ‘play-to-earn’. Here’s a brief
overview of how gaming economics have shifted over the years.
Paid Games/Pay-to-Play (P2P): The First Video Games
It all started with arcade games back in the early 1970s. Arcade
video games worked off a pay-per-play model. Like the name
suggests, games were monetised per play. Arcade goers would have
to stump up a small amount to enjoy one or two rounds of a game.
This was hugely profitable.
When home consoles arrived on the scene in 1972, game developers
saw a need to introduce a new revenue model: single payment.
This new method of payment meant that players could simply pay a
one-off sum in order to gain total access to a game. Examples
include FIFA and Super Mario Brothers.
In the late ‘90s, subscription models — games that require the
player to pay a regular subscription fee in order to maintain
access to all parts of a game — were introduced. This method was
especially popular with MMORPGs (massively multiplayer online
role-playing games) like Tibia, Runescape, and World of
Warcraft.
Free-to-Play Games (F2P)/Freemium: The Next Chapter of Gaming
In the free-to-play (F2P) business model, players have access to
the core of the game free of charge, but are encouraged to spend
money on enhancements, such as additional live, unrestricted
playing time, an ad-free experience.
During the early days of the Apple App Store, the majority of
early mobile games like Angry Birds, for example, were based on
the traditional premium model (i.e., paying for the game up
front).
In October 2009, the App Store introduced in-app purchases for
free apps, enabling players to purchase digital items, such as
in-game currency and resources, to enhance their experience.
Soon after, popular mobile apps like Angry Birds, Temple Run,
and Plant vs. Zombies would switch from the premium model to
what we call ‘freemium’. Video games like DOTA 2 and Team
Fortress 2 quickly followed suit, adopting the free-to-play
business model while offering purchasable cosmetics.
Play-to-Earn (P2E) and the Advent of GameFi
In 2017, Ethereum launched CryptoKitties, the first widely
recognised blockchain game. Shortly after, a number of other
decentralised blockchain games were launched, including Ether
Shrimp Farm, Ether Cartel, and Pepe Farm. These games use a P2E
economic model, which provides players with the opportunity to
monetise their time spent playing games.
In P2E games, in-game assets are usually represented as NFTs,
which players can obtain through in-game advancement and
gameplay. Unlike traditional video games, where developers
control all in-game economics, players in P2E games have
ownership and control over their digital assets. They can even
contribute to game decisions and help shape the future of the
game through the accumulation of tokens.
Take Fairy Cat Gamefi (Fairycat .net), for example, a blockchain
game that rose to prominence in 2022. In Fairy Cat, players
collect, breed, train creatures called ‘Fairy Cat’. Unlike
conventional in-game items, each Fairy cat and item can be
traded on the game’s marketplace for real money.
The game has one native cryptocurrency: USDT. Which is what
players earn through playing the game.
With all that said, games like Fairy cat can have a cost of
entry. In order to start playing, users must adopt one pet
character. Building out an average team in first stage would
have cost around US$30
This initial cost is still a huge barrier for many, especially
as the vast majority of blockchain game players currently hail
from developing countries. This hurdle has led to the rise of
gaming guilds — platforms that enable NFT owners to lend out
in-game assets (NFTs) in return for a share of the assets
generated — which reduce the considerable upfront costs for
would-be participants. The most well-known guild is Yield Guild
Games (YGG).
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