Play to Earn: Risks

“Play to Earn” as “Work to Earn”

The first phase of Web3 gaming struggles to develop meaningful, healthy incentives for player communities to operate at scale. In their first iteration, games such as Axie, have emphasized the accumulation of “Financial Capital” through dual-token economies (e.g. AXS / SLP). By emphasizing pecuniary incentives, the “fun” related to play takes a back seat to economic arbitrage as a primary player motivation.

Privileging pecuniary incentives is toxic to long-term game development: they create negative costs detrimental to “play” as a core player activity. In the absence of play and fun, there is no game per se. Instead, what’s produced is closer to a player's “sweatshop” or “grind”: participants make daily calculations related to spending their “time” or “money” in exchange for earning financial return. Nothing could be further from play, as “time” and “money” in this context is better labeled as “work.” Grindy, pecuniary “Play to Earn” mechanics should be labeled honestly for what they are: “Work to Earn.”

Work to Earn game mechanics generate low-growth effects: the first generations of players, when the cost of entry is relatively accessible as the game economy is untested, fare better in the equation than successive player entrants, with game success. Over time, this serves to:

  • Ensure the “game” evolves into a less and less accessible pursuit: new players face an “entry fee” that can be hundreds of dollars. This ensures declining player participation- the opposite of a healthy growth strategy for a game.

  • Whatever financial return accrues becomes an ROI for the player. At some point, additional work provides no “positive economic return” and players exit the game. This reinforces churn on top of slow / negative player growth over time.

  • Tokenomnics in “Work to Earn” gaming force publishers to define at the outset their tokenomics as a fait accompli. Game evolution, A/B testing, working with the community to refine incentives - all basic tenets of game (and economic) design - are blocked by over-determined premature tokenomic systems, necessary to demonstrate the immediate potential “ROI” for the early adopter.

  • Inflexible, overdetermined, premature economic design increases the probability of long-term failure as the economy lacks adaptability, and cannot “learn”.

All major technical innovations go through iterations from their first generation to later generations. Ready Games proposes a contextual shift in “Play to Earn” game theory, away from the accumulation of financial capital as dominant player motivation, to the accumulation of “Reputational Capital.”

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