This year the video game industry is celebrating its 50th anniversary. From pixelated spacecraft to 3D avatars, the industry has progressed far and wide in a short period of time. More recently, the blockchain has played a central role in the evolution of gaming. Though the Play-To-Earn (P2E) model existed long before now, it exploded as the blockchain advanced in-game digital economies. However, the true value acquired from the blockchain is found in the latest model to emerge in gaming, Play-And-Earn (P&E).

What Is Play-to-Earn?

In P2E an upfront fee is paid to enter the game; during gameplay, participants try to turn a profit by winning levels, battling other players, etc. This has become a very popular gaming model, led in no small part by Axie Infinity. A blockchain game where players buy cartoon monsters and battle each other, Axie Infinity posted $4 billion in sales in February 2022, according to Cryptoslam!. 

Despite its popularity and profits, P2E is beginning to flag in the marketplace. According to UnixGaming CEO, Mirko Basil, “P2E is basically a job. It’s not fun. You do something and earn rewards. Then people cash out their earnings over and over. They don’t contribute to the community, they’re just doing their tasks and getting paid.” Play-to-Earn limits what a player can do within gameplay and isolates players’ incentives to earning, alone; this takes the original focus off of pure gameplay. 

Another flaw in P2E is in its game token economic structure, known as tokenomics; P2E largely depends on a constant stream of new players to replace the revenue lost by players who lose and leave the game. This in turn leads to extreme fluctuation of token price. Worst of all, token value can lead to the game developers executing a ‘rug-pull’ before the price dramatically drops, thus draining the players’ of their investment.

What Is Play-and-Earn?

Play-and-Earn puts a premium on fun, rather than playing for uncertain profit, as in P2E. The differentiating factor between the two is the use of NFTs (non-fungible tokens). In Play-And-Earn, Gamers take personal ownership of digital assets and can give back to the game’s virtual world, community and player experience. 

As CoinTelegraph puts it, “in-game purchases will be genuinely ‘owned’.” What is owned by the player can be taken out of the game and traded on major exchanges, sold outright or simply held as a hedge on a player’s crypto wallet. P&E focuses on quality gameplay for the broader community of players and involves building, owning and contributing. Altogether, this goes much further in extending a game’s longevity in ways P2E cannot.

The Future of Play-And-Earn

One studio that is leading the P&E evolution is Kitty Inu. Their game, Kitty Kart, is a kart racing battle royale built on the Ethereum blockchain. It uses the P&E model with the addition of a Free-to-Play scheme (no entry fee for players to enter). The game uses AAA-quality graphics and its own $kitty tokens, which are capped. With a team of in-house financial advisers and an engineering team that is specifically building the Kitty Kart marketplace, Kitty Inu is opening up new possibilities and is a strong forerunner for P&E gaming.

Play-And-Earn solves the problems in the Play-To-Earn model but has yet to be implemented by major gaming studios. Many established studios are hesitant to implement NFTs into their games because it is not known how gameplay will be affected, nor how users will greet the new format. But as blockchain gaming continues to grow, P&E will become mainstream. Without a doubt, NFTs are becoming a standard––if not a foundation––in the gaming industry.