Problems in Play2Earn world

Problems in Play2Earn world

Despite the rapid growth of Play2Earn market capitalization and the vast number of users, most protocols of this segment encounter similar problems. Such issues frequently lead to reduced interest in the game, the outflow of players, capitalization decrease due to token price drop, etc.

Having compiled a list of the most common issues in the industry, the DinoWars 🦖 team aims to analyze and avoid them in our project.

1️⃣ NFT as a revenue source

The excessive protocol dependence on NFTs often leads to a rapid capitalization drop in case NFTs are not an integral part of the game mechanics. This becomes especially clear if the primary revenue source of the game is connected to selling NFTs.

Using non-fungible tokens is common in GameFi due to their incredible utility potential. But if they are only used by flippers, the game community starts leaving, and the company loses profit. The reason is that any player-centered NFT collection has a price threshold, reaching which the tokens will only drop in value. That is why using NFTs must be based on game mechanics, and the profit from selling them shouldn’t be the main revenue stream of the protocol.

2️⃣ Volatile token inside the game

Many Play2Earn protocols tie game mechanics to their governance token – a volatile asset freely traded on the market. If the protocol economy is well-balanced and there are ways to spend this token, players get a perfect ratio of gaming and getting rewards. However, mindless distribution of rewards leads to eventual token devaluation and speculations.

A large number of tokens on the market and a lack of demand for them usually cause a massive drop in game capitalization and token depreciation. When game items are tied to a volatile token, there is an enormous space for speculation and direct influence on the gameplay both from the side of the players and the protocol. Therefore, the impact of the token on the game mechanics should be minimal to protect players from harmful influence and speculation.

3️⃣ More Earn than Play

Having game developers mostly focused on the earn part of the mechanics can lead to controversial consequences. On the one hand, this will facilitate revenue through the DeFi direction. But on the other hand, this will lead to the absence of actual game mechanics and repetitive gameplay.

In such a case, the protocol becomes attractive for yield farmers who benefit from automatic farming. Yet, this also leads to a drop in popularity among players (who actually make up a large part of the protocol community) and a decrease in the number of other users as soon as the price of the token falls.

A Play2Earn game that has lost players immediately ceases to be profitable. The thing is that no earn strategy, even the best one, will bring profit if there are no people who come to play. Players are attracted not only by the opportunity to earn but also by the game itself.

4️⃣ Lack of interest among players

The Play2Earn segment works similarly to traditional games in terms of motivating players and getting their attention. The lack of a familiar game components, in-game events, replayability, and other essential features negatively affect the audience. If the players are not interested in taking part in the game or if they have no incentive to enter the game regularly, the gameplay stops. And the more players have quit gaming, the fewer users you will have in the future. When you lose the community, attracting new users through the existing network of players doesn't work anymore.

5️⃣ Focusing on a single-player use case

Most Play2Earn games serve single players – users who enter the game once in a while, farm and play alone. This means that the game doesn’t imply any communication between players as there are no incentives for it. If the game requires no competition or other ways of user interaction, players have no incentives to actually communicate with each other except for exchanging NFTs and selling earned tokens. This leads to the absence of the game community, forums and discussions between players.

The social component is essential to the gaming community. If the game encourages communication, if there are different options for creating strategies, if the team implements various languages ​​for the competition of different players/clans/communities, the number of motivated players grows and so does the activity on the platform. When it comes to player engagement and communication, Play2Earn projects have a lot to learn from traditional Free2Play games.

6️⃣ Complex operations related to the blockchain part of the game

The majority of new Play2Earn gamers come from traditional Free2Play games, expanding their area of ​​interest. In fact, since the blockchain sphere is quite young, it has not gained the necessary level of adoption yet so that a person from any sphere could join the industry as it works in traditional gaming. Therefore, one of the problems that Play2Earn games have to solve is the facilitated entry of new players, even if they have minimal experience in the blockchain sphere.

Unfortunately, many protocols forget about this factor and, thus, can only attract a rather small community from the blockchain industry. Most often, these are users of the DeFi segment since many Play2Earn games have both terminology and tools tailored specifically for DeFi. This reduces adoption among players who are looking for good game mechanics incentivized in cryptocurrency.

With all that said, a promising Play2Earn game should strive to simplify the onboarding of new players and their involvement in the blockchain sphere.

7️⃣ Non-transparent system of rewards and funds flow

For the most part, Play2Earn is based on traditional DeFi mechanics aiming to provide profit for players. This includes farming on third-party protocols, getting profit due to token price fluctuations, using traditional tools for swaps and other operations.

Such mechanics do not allow players to correlate the profit to their actions or predict the amount of profit to be received. Thus, the incentivization scheme is no longer transparent for players, which leads to low adoption, decreased number of players, and a limited audience that consists almost exclusively of farmers.

DinoWars 🦖 clearly understands the issues mentioned above and the reasons for their emergence. That is why our main goal is to provide players with the best platform for entertainment and earning through the gameplay combined.