Play to earn crypto games, explained: how they pay and why most fail

What play to earn crypto games actually are

Disclosure: this article is editorial information, not financial advice, and it makes no predictions about any token's price. Gaming Trend Wire holds no position in any project mentioned and has no client relationship with any of them.

Play to earn crypto games are video games where playing can earn you something with real-world market value, usually a cryptocurrency token or a blockchain item you can sell. Wikipedia defines them as a subset of blockchain games with systems that let players earn cryptocurrency through gameplay, and notes that such games let players trade in-game items for cryptocurrency or represent them as NFTs.

The pitch is simple: you are not just spending in a game, you are holding assets you own. The catch is equally simple. Whatever you earn is only worth what other people will pay for it, and in most of these games that depends on a steady stream of new players arriving.

How the earning mechanics work

Most play-to-earn games run two layers. The first is an item layer: characters, land or equipment exist as NFTs, which Ethereum.org describes as tokens that are individually unique, each with a number that makes it unique. The second is a reward layer: a token that the game pays out for winning battles, finishing quests or similar activity. You can usually sell either on a marketplace or an exchange.

To touch any of it you need a crypto wallet. Ethereum.org explains that a wallet is a tool for interacting with your account, built on a pair of keys, one public and one secret. It also gives the warning that matters most for newcomers: you are responsible for keeping your keys safe, there is no customer support in crypto, and transactions cannot be reversed. A mistake with your seed phrase is a mistake with your money.

The Axie Infinity story: the blueprint and the warning

The game that defined the genre is Axie Infinity. Wikipedia reports it generated $21 million in its first couple of years, raised $485 million in July and August 2021 and peaked at 2.7 million daily players, before falling to roughly 250,000 by April 2023. Its reward token, SLP, crashed in February 2022 and lost over 99% of its peak value, according to the same entry.

In the Philippines, Wikipedia says, some players were able to earn enough to cover their cost of living, and guilds rented Axies to new scholars who had to meet quotas, with commissions that could run as high as 75%. When the token collapsed, the income went with it. Sky Mavis later removed references to play-to-earn from its marketing, as Wikipedia notes. We look at the country angle in our guide to [play-to-earn in the Philippines after Axie](/web3/play-to-earn-philippines-after-axie).

Why the economics are fragile

The structural problem is that the token is both the reward and the product. If a game pays out more tokens than players want to buy, the price falls, and when the price falls the earning stops being attractive. Wikipedia records journalist Jason Schreier characterising the play-to-earn model as a pyramid scheme, and says StepN's developer admitted that these games require a constant supply of new players or their token economy would collapse.

That is a heavy claim and worth keeping in proportion: not every game with a token is a pyramid, and some are simply games that happen to use blockchain items. But the pattern is consistent enough that you should treat any 'earn' figure as a best case that depends on other people joining after you.

The security risk nobody advertises

Money in crypto games sits behind real hacking incentives. On 23 March 2022, attackers stole about 173,600 Ether and 25.5 million USDC, roughly $620 million, from the Ronin bridge that Axie Infinity ran on, according to Wikipedia. It says the publisher took six days to notice and describes it as the largest breach in the crypto sector by dollar value as of May 2023. The FBI attributed the theft to North Korean state-sponsored groups, per the same entry.

For an individual player the lessons are practical. Ethereum.org notes that NFT security issues are most often phishing scams, smart contract vulnerabilities and user error such as exposing private keys. Use a separate wallet for games, never share a seed phrase, and treat any unexpected message offering free tokens as hostile.

Ownership versus income: what an NFT really gives you

Ethereum.org lists ownable items for games as one of the main uses of NFTs, and says owners can sell or swap what they hold without a platform arbitrarily taking it away. That is a genuine difference from a normal game, where a publisher can delete your account and everything on it. If an item is a real token in your own wallet, it can outlive the game that created it, at least on paper.

But ownership is not the same as value. An item is only worth something if a game still exists to use it and a buyer still wants it. A sword you own in a game with no players is a file with a receipt. Think of NFTs as a way to hold assets, not as a source of income, and you will judge these games more clearly than the marketing wants you to. The same logic applies to any token a game pays out: holding it is not earning it, and selling it is the only way to find out what it is worth.

Guild and scholarship arrangements add one more layer. Wikipedia describes Philippine guilds renting Axies to new scholars who had to meet quotas, with commissions that could run as high as 75%. Reporting like that is a reminder to ask who is taking a cut before you count any earnings as yours.

How the industry is changing the pitch

Developers have mostly moved away from the phrase. Wikipedia reports that after the hack Sky Mavis removed play-to-earn language from its websites and marketing, and that a 2022 Game Developers Conference survey found 70% of surveyed developers said their studios had no interest in NFTs, with only 1% integrating them. The new framing is 'play and own' rather than 'play and earn', and that matters because it sets a lower expectation about income.

Mainstream platforms have been less friendly too. We have covered how some games dropped the model altogether, for example [Ni no Kuni: Cross Worlds dropping blockchain](/web3/ni-no-kuni-cross-worlds-drops-blockchain), and how the wallet hurdle is shrinking in [web3 gaming dropping the wallet requirement](/web3/web3-gaming-drops-wallet-requirement).

How to judge a play to earn game before you spend

Start with the question 'is the game fun without the token?' If the answer is no, the earnings depend entirely on newcomers. Then ask where the reward token's value comes from: if the only buyers are other players farming the same token, that is a circular economy. Check how the game handles guild commissions, because Wikipedia's reporting on 75% cuts shows how much of an earner's income can leave before it reaches them.

Never put in money you cannot afford to lose, assume every figure you see in marketing is a best case, and read the developer's own documentation on token supply. If you want a plain-English primer on the technology first, start with our explainer on [what a blockchain game is](/web3/what-is-a-blockchain-game-plain-english-explainer).

Our take: who play to earn crypto games are for

Play to earn crypto games are for curious players who accept the risk and treat any earnings as a bonus. They are not a job, and the clearest evidence is the genre's own flagship: a token that lost over 99% of its value, a hack worth $620 million and a studio that dropped the label.

If you want to try one, start small, use a fresh wallet and judge the game as a game first. If you are mainly after income, the honest advice is that a regular job is far more reliable than any token.