Is It Realistic to Depend on Play to Earn Crypto Games for Profit?

Play to Earn games have taken off since the likes of Axie Infinity started becoming extremely popular.

20:30 12 August 2022

Play to Earn games have taken off since the likes of Axie Infinity started becoming extremely popular. However, the real question is whether or not they are good for long-term profitability and are they sustainable?

In order to understand whether or not they are indeed profitable in the long run, it is important to learn how they actually work.

 

How do Play to Earn Games Make a Profit?

Aside from learning how to earn from Play to Earn games, it is also important to understand how they make money. Once you understand how they make money, you’ll be able to understand whether or not they can sustain you for long term growth.

 

Axie Infinity, for example, allows players to earn crypto called Smooth Love Potion or SLP. These SLP tokens can be earned in-game and later exchanged for real-life money or other cryptocurrencies. The problem, however, is in how these SLP tokens retain their value. Axie Infinity, although it has a reserve of SLP tokens, mints new tokens to reward players. This, in turn, devalues SLP in general, and the only way to increase its value is through burning more SLP.

 

Axie Infinity can afford to give SLP rewards to its players due to the number of new players buying their NFT characters and battling them. This means if no more new players join the platform and players within the platform stop playing, Axie Infinity will no longer earn and thus no longer be able to give satisfactory rewards to its players.

 

Some other Plays to Earn games follow a similar profit structure model, and the more new players join the game, the more profitable they become. However, the real question is whether or not they are profitable long-term and can they sustain their profitability.

 

Will Play to Earn Games Remain Profitable?

Play to Earn games can remain profitable as long as new players come in. When a game stops attracting new players, there is a huge risk that the game will no longer be able to rake in additional income and thus not be able to pay its players sufficient rewards.

 

With this being said, most NFT games or Play to Earn games usually have a profitability timeline. This means that existing players will remain profitable on the platform when they are played within this timeline while more new players are coming in.

 

Once this timeline expires and no new players join, however, this will result in a drop in rewards for the players. Like most assets, the goal of players is to earn more than they spend. If a player spends too much on a particular game, they will have to either play more or rely on higher rewards to make a profit.

 

However, the price of the crypto being used is also directly related to its profitability for crypto games. If the price of the crypto backing the game decreases, this would result in the project itself failing. It is also important to note that there have been a lot of crypto games that just weren’t able to survive.

 

 

How to Maximise Profitability in Crypto Games?

If you want to maximise the amount of profit you make from crypto games, it is important that you enter at the right time. If you enter when the cost is too high, you will risk a loss if either the project or its rewards go down.

 

However, if you enter the game when it is not yet kicking off, this could also put you at risk of investing in a dead project. Not all Play to Earn games kick off, with some of them resulting in a loss for players.

 

When choosing a project, aside from a supportive community, you also have to look at whether or not the game will expand and if their expansions are good for the project in general. Sometimes, investing in crypto can be more profitable than playing the game itself.

 

For example, some investors made more money investing in AXS than playing the game itself. The coin, however, has experienced significant price drops, so it is important to do your research if you intend to buy it.

 

Making Money Despite a Declining Game

There is, however, a way to make money despite a game declining in price. This is through shorting its crypto. Since this trading feature is not available to every trading platform out there, you can sign up for websites like Bitcoin Profit. This kind of platform isn’t necessarily a trading platform. However, it offers a simple method to potentially earn with play-to-earn tokens— something similar to Axie Infinity, Decentraland, and The Sandbox. 

 

Before shorting crypto, or a token, however, it is important to learn more about the crypto you are planning to invest in beforehand. Due to the volatile nature of bitcoin and the crypto market as a whole, it is important to do your own research before investing in any highly-volatile asset.

 

 

The thing about earning from Play to Earn games is that the game can only pay players as long as it makes money itself. If a game stops making money, it will no longer be capable of playing its users, which would result in them either not making back their investment or, worse, losing money.

 

If you are planning to invest in any Play to Earn game, it is important to do your own research to ensure it is still profitable or has potential for future profitability. However, if a game is declining, this could signal that it is no longer a profitable investment.

 

Conclusion

Despite Play to Earn games being an unorthodox way to make money, it is still important to consult a financial advisor to make sure you don’t invest more than you can afford to lose. Unlike other investments, Play to Earn games can be riskier and thus should be invested in with care. As a rule of thumb, it is important to never invest money you cannot afford to lose.