Play-to-earn crypto games have exploded onto the scene and are shaking up gaming business models. Here's how they work, and where the value comes from for investors.

There are a lot of play-to-earn games in the world.
They seem to be revolutionizing the gaming industry with a new format with huge appeal.

The source of the money is not known.

The currency that players earn within the platform contributes to the value of all play-to-earn games. Some small names are only looking to cash in on the metaverse craze because not every game has the same model.

Native token are used for in-game purchases and trading. They derive value through the use of their token which users and traders think is valuable.

The model used by Axie Infinity counts on players making a large upfront investment in game specific NFTs. The gaming economy can be injected with value if players can trade their in-game digital assets at an appreciated price with other players.

The token value collapses if everyone leaves and exchange their Axie token for another digital currency. Demand for the token continues if the game continues to be successful.

The game's owners and investors believe that people will continue to play and invest in it. Digital asset ownership is gaining mainstream acceptance.
Axie's axs coin gained an eye-watering 18,000% over the course of the year, while Decentraland's token rose by 4,000%, ranking the two of them among the best performers in the space last year.

Am I guaranteed to make money playing?

No. It depends on the amount of time you invest in the game, the popularity, and the demand for in-game assets.

Diego Di Tommaso, the co-founder of OVR, said that play-to-earn is not a magic pill that will make any game profitable for players.

Is the business model sustainable?

There are a number of problems associated with this concept because of the appeal of earning money. A game's ability to grow the economy it intends to build is a major risk.

Adrian Kolody, founder of Domination Finance, says that the only sustainable model is a play-to-earn model.

Being entertained and having a good time while playing could be watered down by people using bot-farmers as a way to make the most of the game for the sake of residual income, he said.
He said that bot behavior also encourages the auto- dumping of the token rewards that you receive from these games. Negative price action can mean certain death for some projects who rely on their token to do well for sufficient runway.

Continuous trading of in-game assets creates a need for a constant inflow of new players to maintain the business model.

How much is the game earning?

It was easy. Fees! A major revenue stream for the game is the fee for new players to purchase in-game currency. The price appreciation of native token is the most appealing part of the game.
Solid communities and brands give games an edge.

"Axie's longevity will be based on how fast it can grow its player base and drive additional utility to its in-game assets," said Kim. "Axie has changed people's lives, that's their competitive advantage." There is no other play-to-earn game with that level of loyalty.