With the emergence of blockchain technology, the gaming industry has changed, particularly in terms of player incentives. Two developing models, Play to Earn (P2E) and Play and Earn (P&E), have grown in popularity, with participants receiving monetary benefits for their engagement. However, the two models differ significantly, with each providing unique benefits and problems.

In this blog, we will look at what these models are, provide real-world examples, compare their characteristics, examine their challenges, and decide which model is most suited for the future of gaming.

What is “Play to Earn” (P2E)?

Play to Earn (P2E) is a gaming concept in which players get rewards, usually in the form of cryptocurrency, tokens, or non-fungible tokens (NFTs), for performing in-game assets, reaching milestones, or just playing the game. These prizes can then be bought or sold on decentralized marketplaces for real-world currency.

How It Works:

• Monetary Rewards: Players acquire assets (such as cryptocurrencies or NFTs) by performing tasks, leveling up, or competing against other players.
  
• Real Ownership: Players own digital property like in-game items and assets, which are frequently safeguarded using blockchain technology.
  
• Marketplaces: Decentralized markets allow players to exchange or sell earned assets for real-world value.

A real-world example of P2E: Axie Infinity

Axie Infinity is one of the most successful play-to-earn games. In this blockchain-based game, players breed, nurture, and combat monsters known as Axies. Players receive Smooth Love Potion (SLP) tokens as a reward for their efforts, which can be exchanged on cryptocurrency platforms. At the time, players in nations like the Philippines earned more than the national minimum wage by playing Axie Infinity, illustrating the economic potential of P2E.

What is “Play and Earn” (P&E)?

The Play and Earn (P&E) approach, on the other hand, places the major emphasis on the fun and enjoyment of playing the game, with earning possibilities serving as a further benefit. Rewards in P&E games are frequently used as a bonus or supplementary aspect rather than the primary incentive for participation. P&E guarantees that the player experience stays interesting and meaningful, rather than focusing on financial gain.

How It Works:

• Focus on Fun: Gameplay is intended to be organically satisfying, with profits acting as a bonus rather than the primary appeal.
  
• Balanced Economy: Unlike P2E, PnE games seek to avoid an overemphasis on income in order to ensure the game’s life.
  
• Player Retention: By focusing on enjoyment, PnE models strive to increase player retention and promote healthy in-game economies.

Real-world Example of P&E: The Sandbox

The Sandbox is a virtual environment where gamers may develop, control, and sell their gaming experiences with NFTs and the local currency, $SAND. Unlike P2E, The Sandbox emphasizes creativity and social engagement, with income potential serving as an extra reward rather than the game’s driving force. This ensures that the core experience—exploring and building in the virtual world—remains central.

Features Comparison: Play to Earn vs. Play and Earn

Focus of Gameplay

Play to earn: In P2E games, the primary goal is to gain tokens or other financial rewards. Players frequently join for monetary rewards, with gameplay occasionally taking a back seat.

Play and Earn: P&E games focus on the player experience, making sure the game is fun and engaging first and foremost, with revenue considered a secondary advantage.

Earning Mechanism

Play to Earn: Earnings are an essential component of the P2E paradigm, with rewards built into gaming mechanisms. Players earn cryptocurrency rewards or NFTs, which may be turned into real funds.

Play and Earn: P&E games allow players to earn prizes, although they are often less monetarily motivated. The benefits in P&E games are rarely the primary motivator for players, and the framework promotes long-term participation over immediate gains.

Player Motivation

Play to Earn: P2E gamers are frequently enticed to games because of the possible financial rewards. This might result in a high churn rate if market circumstances change and token values decrease.

Play and Earn: In P&E games, players are driven by their enjoyment of the game, which leads to longer-term engagement. The additional possibility to profit is viewed as a bonus rather than the primary reason for taking part.

Sustainability

Play to earn: Tokenomics frequently raises concerns about P2E’s long-term sustainability. When there is an overstock of tokens, their value falls, causing economic collapse in the game’s ecosystem.

Play and earn: P&E models are more sustainable since they rely less on token incentives and instead prioritize player happiness and long-term involvement.

Advantages and Disadvantages of Play-to-earn and Play and earn Model

Advantages of Play-to-earn

Income Generation: P2E games allow players to make money, often in large sums, which can be life-changing in certain places.

Economic Inclusion: Play-to-earn games have expanded the gaming industry to include those who previously did not have access to standard gaming platforms.

Decentralization: It gives players more control over their assets, which may be traded on secondary markets.

Disadvantages of Play-to-Earn

Speculative Nature: P2E games may be extremely speculative, resulting in price volatility in in-game assets and tokens.

Unsustainable Economies: Many P2E models rely on a steady intake of new players to keep the ecosystem running, rendering them prone to market collapses.

Monotonous Gameplay: When the financial advantages dwindle, players may lose interest since their major motive is money rather than enjoyment.

Advantages of Play and Earn

Engaging Gameplay: The P&E model prioritizes enjoyable and engaging experiences, which are likely to attract and keep players in the long run.

Balanced Incentives: The concept creates a balance between paying participants and providing great gaming, reducing the ecosystem’s reliance on market speculation.

Greater Retention: Because players are not entirely focused on earning, retention rates are better, with players continuing to enjoy the game after the novelty of earning wears off.

Disadvantages of Play and Earn

Slower Adoption: Some P&E games may see slower adoption than P2E games, since players may initially choose games that provide more instant money incentives.

NFT Fatigue: In some circumstances, gamers may become bored of the NFT-based benefits if they do not hold real-world value or utility inside the game. 

Challenges for Both Models

Regulatory Concerns: Many areas’ regulatory frameworks for cryptocurrency and NFT trading remain unclear. This uncertainty impacts both P2E and P&E games, particularly those that include more financial factors into gameplay.

Player Onboarding: Both models confront difficulties in onboarding new players, particularly those unfamiliar with bitcoin or blockchain wallets. Lowering entrance hurdles remains critical to mainstream acceptance.

Sustainability: Both approaches must consider long-term sustainability. P2E models are subject to speculative bubbles, whereas P&E games must strike a balance between enjoyment and rewards.

Which is better?

Determining which approach is preferable is heavily influenced by the aims of both developers and players.

For Players Seeking Earnings: If the primary aim is to make money, Play-to-Earn games like Axie Infinity may provide short-term financial advantages, but they are associated with increased risk and probable volatility.

For Players Seeking Entertainment: Play-and-Earn models, such as Big Time, are more likely to appeal to players who want to enjoy a well-rounded game while also earning prizes. Because of their emphasis on gameplay, these games have a longer shelf life.

For developers: Play-and-earn models appear to be a superior long-term strategy focused on increasing user retention and loyalty through great gaming. However, Play-to-Earn methods may generate faster buzz and money, but more volatility. 

Closing Thoughts

The gaming industry is changing as blockchain-based models that reward gamers emerge. Play to Earn has high earning potential yet often challenges with long-term viability and player depression. Play and Earn, on the other hand, takes a more balanced approach, emphasizing player fun while still providing for money benefits. As the gaming market evolves, the Play and Earn model appears to be more suited for long-term success, especially as more games prioritize user involvement and sustainability above short-term financial advantages.

Both models present tremendous prospects, but Play and Earn might be the key to unlocking gaming’s future.