“Play-to-Earn” is Not a New Concept
Do you remember the days when you bought a game and then played it and that was the full extent of your financial dealings with the company that had produced it? I do. Sadly those days have pretty much gone. As video games have become a more mainstream leisure activity, the business model associated with them has similarly evolved. Microtransactions introduced charges for additional content, which then paved the way for the “live service”. Video games have ceased to be standalone products and become yet another online leisure amenity that requires continuous payment to access. I’m sure developers working at the coalface of video games still harbour sincere desires to make a “good game” but it is clear that is not the goal of the big triple A publishers that finance them.
A cursory internet search quickly yields data regarding how the major video game publishers such as EA, Activision and Ubisoft are heavily invested in technology and patents that can be used to squeeze more money from their customer base. They have no earnest interest in producing good games but are more focused on how the product can make the player behave. They desire titles that yield a constant flow of revenue and their actions thus far show that they are not constrained by ethics and morality. They are happy to exploit those with addictive personalities, the neural divergent and the young. Hence it will come as no surprise that the industry titans are now turning their attention to blockchain technology and NFTs as a means to make their next generation of products even more financially lucrative.
Essentially the presence of these two latest buzzwords is a sign that the likes of EA, Activision and Ubisoft are preparing for “play-to-earn” gaming. Consider, if you will, the latest generation of “live service” games in which in-game currencies, items, services and even characters are subject to a predetermined scarcity. And that these virtual goods will have a real monetary value and are thus tradeable. The money earned by players will then unlock further content and thus the cycle perpetuates. Naturally the publishers will take a percentage of all transactions and therein lies the foundation of their new business model. What I find surprising about such proposals is not their very existence but the fact that the video games industry have only just got around to considering them?
For those gamers who may balk at the ethics of such a business model, it has existed to a varying degree for decades already. Since the turn of the century, the MMORPG genre has unofficially traded in-game resources for real money. Gold selling being the obvious example but there are other variations. Entire player accounts are traded online, as well as other non-account bound in-game items. However, all the money generated from such transactions at present goes to third parties. “Play-to-earn” ensures that the revenue stays with the publishers. And if you’re a “doubting Thomas” who feels that ethics and morality will trump capitalism, this idea has already been tried previously. Diablo III had a real money auction house in 2012 which ran for nearly two years. Consider that to be a beta test for Blizzard.
Therefore, I don’t think there is any doubt that “Play-to-earn” is coming. It already exists within Facebook gaming and some mobile games. However, I don’t think we’re going to wake up tomorrow and find that the triple A gaming landscape has changed overnight. Where loot boxes have trodden the fine line between gambling legislation and “surprise mechanics”, “play-to-earn”, with its trading in virtual commodities, will more than likely attract the attention of most countries' tax systems. Sorting out the legal aspects of such a game mechanic will be no small beer. But given the potential revenue that could be generated, I’m sure those video games publishers involved will lobby governments robustly to ensure that such games can exist legitimately. As for those gamers who are furiously clutching their pearls (or Mario plushies) in horror of the very notion of “play-to-earn”, there is an equal number who will see a means to make money, outside of traditional employment. Just like Twitch and YouTube afford similar opportunities.
It is this latter point that I would like to explore further. Let us embark on a thought experiment. First off, we must not just assume in our arrogance that European countries and North America are the sole target for “play-to-earn” games. In fact it is likely that they’ll initially launch in countries with less rigorous or “evolving” legislative procedures in place. Emerging economies with existing levels of poverty and cheap labour spring to mind. Naturally such an environment offers a potential means of income for those seeking employment. Thus when such games finally launch in Western countries they may well already have an established in-game economy up and running. Once again, rich consumers will initially seek to profit from the fruits of others labour. However, in a decade or so, the employment landscape in Europe and North America may not be the same as it is now. We may have a substantial level of unemployment due to technological advances and automation. “Play-to-earn” games may well be looked upon more favourably.
To summarise, “play-to-earn” as a concept is not new and may not be as unpalatable as some gamers would have you believe. All industries are subject to customer churn and therefore those gamers thinking that their departure from gaming sends some kind of message, may find themselves ignored by the major publishers, as and when they roll out games with real economies. However, the legality of managing such games is at present the biggest obstacle. Some political parties and institutions won’t like the concept of virtual work houses emerging as a means of providing employment. However, capitalism always seems to get its way eventually. Furthermore, by the time “play-to-earn” becomes any kind of reality, the current generation of gamers will probably be so conditioned to the iniquities of the industry, that they won’t offer any major ideological opposition.
