Play-to-earn (P2E) crypto games are built on blockchains and allow players to earn cryptocurrency, NFTs, and other digitals assets for progressing through the game. 

P2E gaming assets can be sold on mainstream NFT marketplaces and sold on customized gaming NFT marketplaces in exchange for digital currency. Additionally, P2E games offer a variety of revenue streams for developers including in-game purchases, metaverse advertisements, trading fees, and royalty fees. 

Because of blockchain technology, crypto games not only offer unique monetization models, but can protect the integrity of user data, user safety, and are quickly becoming one of the most popular segments of the gaming industry.

How do P2E games make money?

Play-to-earn games make money through mechanisms such as in-game purchases, metaverse advertisements, and asset trading fees.

1. In-Game Purchases

In-game purchases are one of the main ways that play-to-earn games generate revenue.

Players can buy in-game assets such as characters, weapons, and other supplies using cryptocurrency, to enhance their gaming experience and progress more quickly.

This is similar to the traditional pay-to-play model, except that the in-game assets in P2E crypto games have real-world value.

In popular P2E game The Sandbox, for example, players can buy plots of land, in-game items, and other digital assets.

While it’s possible to play The Sandbox without spending any money, doing so may result in slow progress. To keep moving forward, players typically make purchases.

2. Metaverse Advertisements

Most P2E games implement a metaverse in their gameplay (i.e. a virtual universe where players can explore, interact and create in-game assets.)

It’s possible to place ads in this interactive virtual environment, similar to billboards in the real world, allowing game developers to earn revenue from advertisers.

Because metaverse advertising is entirely digital, ads can be shown to laser-focused audience segments.

The same "billboard" can show different ads to different players based on their interests, potentially providing a much higher return on investment than the real world equivalent. This allows game developers to charge a premium for sponsorship.

3. Asset Trading Fees

P2E games offer players the option to trade in-game assets. Game developers can generate revenue by charging fees on each such transaction, and also small royalty fees. Some of these fees can be used to reward miners who process the transactions and help secure the network, and they may also act as a deterrent to potential malicious actors who attempt to wash trade NFTs to manipulate asset prices.

How do gamers earn money playing P2E crypto games?

Because assets gained through gameplay hold real-world value and can be sold on marketplaces, P2E crypto games offer opportunities for players to earn money.

1. Earning In-Game Digital Currency or Tokens

One way players can earn money with P2E games is by earning cryptocurrencies via gameplay. P2E games often have their own built-in cryptocurrency or token that can be acquired through in-game activities. Players can then sell these tokens on cryptocurrency exchanges for real-world money.

Here are some examples of P2E games and their respective native tokens (in-game cryptocurrencies):

• Decentraland ($MANA)
• The Sandbox ($SAND)
• Aavegotchi ($GHST)

2. Collecting In-Game NFTs 

Players can also earn money with P2E games by collecting NFTs and selling them on marketplaces for real-world money.

Many P2E crypto games have built-in marketplaces, where players can buy and sell their in-game assets.

3. Professionally Trading Assets

The ability to trade gaming NFTs also provides an opportunity for professional arbitrageurs and day traders to make money from P2E crypto games, by purchasing in-game assets and reselling them for a profit on another platform.

What should you consider before playing P2E crypto games?

Before you dive into P2E crypto games you should protect yourself by doing thorough research and paying particular attention to the legitimacy of the game, smart contract security, and game mechanics.

Remember that play-to-earn games come with inherent risk, so due diligence is crucial before connecting your wallet to these games or signing transactions.

With the right precautions, you can have a great time earning real-world rewards while gaming.

1. Legitimacy of the Game

P2E crypto games are a relatively recent innovation, so users should be vigilant when selecting a game.

It’s important to check that the team behind the game is legitimate, and to read up and see if anyone has had a bad experience while playing it.

Sometimes, spammers create fake websites with addresses that are very similar to legitimate sites.

Interacting with these fake websites can drain your wallet of funds, so always double-check where you are connecting your crypto wallet and do not engage if the website looks suspicious.

2. Smart Contract Security

Smart contracts are an integral part of P2E games. Before playing a game or interacting with its smart contracts, ensure that it’s secure by checking that the code has been audited by a reputable smart contract auditing company.

It’s vital that the smart contracts do not have bugs or loopholes that could allow hackers to steal your funds.

3. Game Mechanics

Before beginning to play a P2E game, familiarize yourself with the game mechanics and look out for any malicious clauses in its terms and conditions.

Read up on the game rules to understand how rewards are distributed, fees are charged, etc.

The gameplay should be fair and not favor one particular party over another.

You should also check whether there are restrictions on withdrawals, and whether in-game items can be exchanged for fiat currency.