Why the current Play-To-Earn model is not sustainable, and how the G4AL model redefines and upgrades it with a more progressive and sustainable approach.

In-game economy

One of the key factors for a Play-To-Earn model to be successful is to have a sustainable economy. Axie Infinity was the first game that obtained millions of users playing a blockchain game, and the total market cap of AXS (the token of the platform) reached 10 billion USD. The model that Axie Infinity (and many other games that copied it) uses is simple:

Players need to buy 3 NFTs called Axies to play the game.

The more they win, the more they get rewarded with the in-game token called Smooth Love Potion (SLP).  The only use for the token that gets burned after, is to breed new Axies. Users can combine two existing Axies, to create a new one.

To convert the token into fiat, it’s required to move the SLP token into an external exchange and trade them for other users with an SLP/USDT pair. This model is only sustainable when new players are entering the game and depends on their demand for buying Axies. When there are no new players entering the game, the economy collapses quickly because there is no reason to keep breeding Axies. As a result, SLP does not get burned, which causes major inflation in both sources, NFTs and SLP.

This is precisely why Axie is not sustainable anymore, because there is a huge inflation problem. With the lack of new players and how the entire system is designed, the current economic model collapsed beyond the point of no return.

The current model transfers the money from new players to old ones, making early investors and players the only beneficiaries.

Below are the key points of why the current Play-To-Earn model is not sustainable and how G4AL approaches and solves these problems.

Low utility of in-game tokens

In a Play-to-Earn economy, the game must offer different services that require the use of the in-game token. The entire model relies on players needing that token to enter and progress in the game. The demand for the token is linked to the services that the game offers. These services have a cost that requires the token that is farmed by players, which drives the demand for it. If the token is used, players put a fair value depending on the demand/supply in the market.

The in-game token gets farmed daily by players, those newly farmed tokens are minted meaning that every day the total supply increases creating an inflation problem.

The graphs below show the current model in Axie Infinity:

  • On the left, the mint-burn ratio shows how more than 30x times are minted every day more than burning. That means that every day the circulating supply of their in-game token SLP increases considerably.
  • The right side shows the price action and devaluation in price. A higher minting ratio than burning equals a significant price devaluation.
Data from www.axieworld.com
Chart from SLP/USDT pair in www.CoinMarketCap.com

 

In order to reduce this, all the tokens that are used for in-game services get burned. If the game does not offer enough mechanisms to burn them, the rate at which tokens get minted is far higher than the rate at which they are burned, creating a huge inflation problem. If players do not have an incentive to re-invest what they farmed, they sell their tokens. This selling pressure drives the price of the token downwards every day, meaning fewer rewards and ROI for the players.

In the model that G4AL offers, the in-game token has many utilities like gold (soft currency) in a traditional web2 game. There are many in-game purchases and actions that require the use of the token to progress in the game.

In Elemental Raiders, the first game that G4AL will launch this year, the in-game token has many utilities such as:

  • Buying Chests
  • Buying Skins
  • Minting NFT Skills
  • Upgrading NFT masteries
  • Buying soft currency

All these features are important to progress in the game.
Players can spend their farmed tokens to progress faster and have a better team value, giving them more chances to win more games and more rewards which result in increased earnings.
With all the services that are available in the game, there are enough burning mechanisms to reduce inflation with an equal mint-burn ratio.

The system is designed to incentivize the players to re-invest their farmed tokens to progress and win more rewards. 

NFTs have no progression

In games like Axie Infinity, when a player buys an Axie, the NFT has no progression. Players can’t upgrade them, and the NFTs do not change over time.

This system has many flaws because progression is one of the best features of a game to retain players.
One of the biggest mistakes in current blockchain games is that the time spent in the game is not taken into account, and the game lacks content and features. This creates games that, besides the potential ROI, players have no incentive to play.

At G4AL, the amount of time spent playing the game matters.

The model is designed in a way that players can monetize their time playing the game.

Elemental Raiders’ NFTs have progression, and players can mint and upgrade these NFTs, making them more valuable over time and more unique.
Players can use their farmed in-game tokens to progress and have a stronger account, which makes the player increase their chances to win more, so they can upgrade their assets or cash out for profit.

Many combinations with different stats and passives are involved in the level-up and skill system in Elemental Raiders, which creates NFTs that are rare and hard to obtain.

Elemental Raiders beta in-game footage

With the time and resources required to upgrade NFTs and their scarcity, NFTs are more valuable.

Entry barrier

In the current Play-To-Earn games model, players need to invest a huge amount of money to start playing it. Users can’t even test if they like the game. In most games, the economy is poorly designed and thus not sustainable in the long term. This means that the last players to start playing can’t recover the initial investment.

The graphic below shows the current entry cost to create a basic Axie Infinity team is roughly 300 USD. For reference, a traditional triple AAA video game requires a 60 USD spend.

Data source from Axie Marketplace in July 2022

In 2021, when Axie was at an all-time high, the worst Axies were valued at around 400 USD each, meaning that for entering the game with a basic team a player needed to spend around 1200 USD.

Free-to-Play is the model that G4AL decided to go with. The freemium model with micropayments is already a successful one in traditional games. The model merges the best of two worlds, web2 and web3, combining the key aspects of both of them. The free-to-play game with no entry barrier and a sustainable and progressive economy means that anyone can play the game.

G4AL creates a bridge between the Free-to-Play and Play-and-Earn models. Players can play all the games without any barriers and progress at their own pace.
Because of how the progression system works, players can level up their skills, and whenever they want, and at a low cost, they can convert their skills to NFTs and:

  • Trade them in the marketplace: Because the skill is levelled up and requires time and resources, the NFT is more valuable than the cost of minting it. It’s easy for players to recover the initial investment cost with time and effort.
  • Hold the assets and gain a Play-and-Earn status: Holding assets in the user’s account makes them eligible for earning token rewards when winning a PVP match.

The platform runs with a blockchain oracle mechanism.

The tokens that are required for purchases or upgrades in the game updates depending on the current token price. Meaning that the price value in fiat of the service is always the same. This feature is very important because it doesn’t matter at which stage of the game a player enters, they are not affected by fluctuations in the token price.

The entry barrier is the same for everyone and doesn’t matter if a player joins early or late in the game, making it fair for everyone meaning that not only early players benefit from the game.

Players can grow their account value and assets with the time spent in the game, meaning that playing the game makes in-game assets more valuable. 

In-game token distribution

One of the key aspects of current play-to-earn games is that they share part of the revenue in the game with all the stakers that hold their platform token, which gives it utility. However, this model does not incentivize the players, just the early investors or speculators.

The model of G4AL offers a different approach to blockchain gaming. Most of the rewards and revenue generated from the game go back to the user. The revenue generated is shared from the services that require the use of the platform token, G4AL Token (G4AL), as follows:

  • 50% goes to the pool rewards: Rewards are distributed via different airdrops, events, and top-ranking players.
  • 20% to buy the in-game token in the market and burn it: this helps heavily in reducing the inflation of the token.
  • 30% to in-game improvements: Such as server stability and future patch notes.

This is not applicable for in-game sales of NFT skins.

This model empowers and incentivizes players to keep playing the game and creates an economy where most of the money that enters the game stays in the ecosystem.

Active players are the most valued resource for a game to succeed. Rewarding and incentivizing players make the game economy much stronger. G4AL rewards players and not speculators.

Games with a finite horizon

Current blockchain games are not designed like traditional video games. The mechanics of the game are very repetitive and not enjoyable because they lack content and in-game progression. Players are only playing the game because they believe it can be profitable and earn money with it. When the game economy collapses and the game is not profitable anymore, players do not have any more incentives to keep playing the game.

G4AL focuses on having games that are fun and enjoyable to play. The game has two layers:

  • The most important one is the Free-To-Play layer, where the game is designed to have different key elements to retain users playing it. Fun, immersion, and depth are some of the key aspects that the game is focused on.
  • The Play-And-Earn layer can be switched off if needed meaning that G4AL games can be played on platforms where crypto is currently not allowed.

G4AL, with this games-as-a-service model, can create games with infinite content with multiple progressions, game modes, heroes, new skills, upgrades, and much more, meaning that the game remains attractive for players over time.

G4AL reinforces the idea that, at its core, a game must be a fun and enjoyable product, which ensures that players always come first.


Blockchain games are not user-friendly

Blockchain and cryptocurrencies are hard to understand and interact with. Most of the 3.5 Billion gamers worldwide don’t know how to send a transaction, set up a Metamask wallet or understand cryptocurrencies. This is the major problem right now for blockchain to go mainstream and have massive adoption.

In the G4AL Platform, it’s not mandatory to interact with the blockchain at all. Users can pay for all the services in-game with their credit card, and the platform automatically interacts with the blockchain. The platform converts the tokens required for the transaction with the service purchased in fiat directly, meaning that the user does not have to understand how the underlying blockchain technology and infrastructure work because the platform can do this for the user.

To create an account, users just need to use an e-mail/password with a 2FA authentication, similar to all traditional games.

This approach is easier to understand, rather than creating and interacting with an external wallet with low security, seed phrases, and private keys, that are common in current blockchain games.

A platform that is user-friendly and easy to use removes the barrier to blockchain games achieving millions of users.


Lack of experience making video games

Current blockchain games are developed by blockchain experts but not by game developers. This means that the quality of the product is considerably lower than that of web2 games. Blockchain games are mostly rushed for fast gains and depend on the market sentiment.

A new wave of good games is coming to blockchain gaming, and G4AL aims to be the first one to release a product ready to change the outcome for Play-And-Earn games.

G4AL has a management team with solid and complementary expertise in business, technology, and investments. The founders have a combined 125 years of experience in entrepreneurship, video games, and new technologies.

  • Manel Sort, the CEO, has more than 20 years of experience as a video game developer and producer, studio head, and CEO of companies in the video game industry. He has contributed to and released more than 60 games on all major platforms (PC, Xbox, PS2, mobile), generating more than $ 1 billion in EBITDA.
  • Art Director Javier León has 26 years as a CGI specialist, art director in video games and special effects studios in Europe and the US. He was nominated for an Emmy for title credits of the Netflix series The Crown, and is one of the 200 Best International Digital Artists, according to the Lürzer Archive.
  • Christian Gascons, COO, and Marc Tormo, Game Director, both ex-Blizzard Entertainment, have a background in video games both in large companies and entrepreneurial projects.
  • Carlos Blanco and Ernest Sánchez are thought leaders in the field of new technologies and the start-up ecosystem, with numerous achievements backing their expertise.

The G4AL team shipped more than 60 titles in the traditional game-as-a-service model and have previously been pioneers in implementing the free-to-play model which has become the web2 industry standard.

G4AL is committed to creating a platform with long-term value, which is why the team has a 10-year vesting period for their tokens.

Compared to other platforms this shows that G4AL is not focused on short-term gain and commits to creating a long-term and sustainable ecosystem.

The G4AL team is one of the most experienced and talented teams in the blockchain industry. With a full transparency model, their objective is to make entertaining games. 


First, raise the money, then do the product

In the blockchain game industry following the hype of the crypto market, there was a rush to announce new game releases as a result of the success of Axie Infinity.

Some of these games raised millions of dollars from investors in the hope that they would be the next hit.

However, these games were not under development, and most of them after two years have not been able to deliver a playable version of the games they promised. This resulted in investors losing their capital to games that were never shipped.
G4AL wants to do things right: The company first started with the development of its product: Elemental Raiders, and when it became clear that the team would be able to release the game, the focus was turned to raise money.

G4AL believes that having a finished game first to show everyone, is the right move. This makes much more sense in an environment where there are a lot of promises but no results.

Elemental Raiders beta in-game footage

Having a real and finished product makes the user trust the project and the company heavily. The key to success is to deliver on what has been promised.   

Article by Adria Mir, Games & Blockchain Expert at G4AL