GameFi
After the decline of play-to-earn smash Axie Infinity, many crypto game industry executives and developers have espoused a fun-first, gameplay-focused approach over pushing token rewards. However, longtime NFT game backer and Reddit co-founder Alexis Ohanian remains convinced that “play-to-earn” gaming is still the future.
“Within the next five years, the majority of gamers won’t play games unless they are being properly valued for that time,” claimed Ohanian, who is founder and current General Partner of venture capital firm Seven Seven Six, in a Twitter thread Wednesday.
“These games may face hurdles to adoption as the wider public adjusts to crypto and NFT trading, but as these technologies scale, play-to-earn becomes a no-brainer,” Ohanian added.
Within the next 5 years, the majority of gamers won’t play games unless they are being properly valued for that time.
The model is called “play-to-earn” and it will become standard for video games in the future.
Let’s talk about why ↓ pic.twitter.com/vPWlWmmK4a
— Alexis Ohanian 🧠 (@alexisohanian) May 31, 2023
Ohanian cited the six-figure sale of a virtual nightclub (Club Neverdie) in the early 2000s game Entropia Universe, plus more recent six-figure sales of Counter-Strike: Global Offensive (CS:GO) skins, as reasons why he believes games will broadly move toward the “play-to-earn” model.
In play-to-earn games, players earn something (typically a crypto token or an NFT) in exchange for gameplay hours, wins, or other achievements.
Axie Infinity Making Big Changes to Fix Its Ailing Play-to-Earn NFT Economy
He cited Axie Infinity as a title he believes is “leading the way.” But if this all feels like old news, that’s because it is.
Axie Infinity has generated more than $4 billion worth of NFT trading volume to date, but the game’s pioneering play-to-earn economy collapsed in early 2022. Axie’s token prices fell sharply, with the in-game SLP reward token now down 99.5% from its peak price, while the AXS governance token is down 96% from its own all-time high.
Ohanian is an investor in Axie Infinity creator Sky Mavis, however, and also was an early backer of Horizon Blockchain Games, the maker of NFT-based trading card game Skyweaver. He’s been an ardent proponent of crypto-fied video games, as well as a collector of high-value NFTs and backer of various Web3 startups.
Many crypto executives and game developers have argued against Ohanian’s stance in recent months, suggesting that play-to-earn is not a sustainable model for the industry.
Azra Games CEO Mark Otero, for example, previously told Decrypt that he is “not a fan” of play-to-earn games. And Solana Games General Manager Johnny Lee believes that play-to-earn games are not even games, but are actually DeFi products.
Did my guy leave this tweet in draft for 2 yrs https://t.co/XHQ5LhZQ7J
— Zhuoxun Yin (@ZhuoxunYin) May 31, 2023
While the responses to Ohanian’s thread were largely negative, plenty of crypto industry folks wondered why the VC decided to share such a message at a time in which much of the industry has moved away from the “play-to-earn” term entirely.
“Did my guy leave this tweet in draft for 2 yrs,” wrote Magic Eden COO Zhuoxun Yin.
“This is a terrible take,” wrote Wildcard Marketing Manager Phineas Totten in response to Ohanian’s thread. “Gamers have never measured monetary value pulled from a game and they shouldn’t start. Monetary value coming from a game is a bonus on top of the main value metric of enjoyment.”
