Current failures in the play to earn
Video games implementing NFT technology (currently known as 'play to earn') are a true revolution for the gaming industry. They also represent a better example of how they can be a source of revenue for a vast part of the world population very often in countries where many citizens are unbanked.
However, adopting this technology can be quite tricky, several projects are claiming to be 'play to earn' without actually having a healthy token-economic ecosystem and not being fun, delivering an unpleasant experience to users, players and the whole industry.
Video games were developed with a unique vision: to entertain. In addition, over time, the notion of video games evolved to such an extent that today you can immerse yourself in a story worth an Oscar or a successful tv series, where not only the mere fact of playing entertains you, but also its history, its lore, its landscapes, concepts, teachings... For us, the word videogame means something very significant and our concept goes far beyond just starting to generate a quick money scheme. For us, a video game has to be a life changing experience.
Quite often, NFT games lately released, seem to have a rough time maintaining a sustainable and healthy token-economic model. Over here, the key reasons:
When a play to earn bases a token-economic model, on a single token that is used to trade in game assets capable of generating revenues in the same token, it is inevitable that sooner or later the system will fall on its own.
Let's imagine a token with ''x'' supply: If this token is needed to purchase assets and minted by players as rewards for playing, we clearly observe a system where the new players entering are financially supporting the players who are already inside. This spiral works only until the growth curve starts to turn downward. When the number of recent players is fewer than the number of players already in the game, we start to witness drastic issues in the token, value, assets and rewards.
Subsequently, the famous "oracle" system has been widely used to handle price instabilities, yielding a fixed reward in the value of $dollars regardless of the value of the token. This lengthens the life of the projects because it allows a better control of the reward system, but it is still inefficient in the medium and long term, because when the project reaches a vast number of players and suffers a small price correction, the number of rewards in terms of the token increases at rapid rate, therefore causing a large number of tokens distributed, sharp drops and again an emptying the pool of rewards.
This system has been seen a lot in the so-called "click to earn", a business model that Foxtrot steadfastly avoids.
These exposed reasons are based on the results appreciated in the majority of projects that have considered this economic system in their game.
Example: A higher number of active users in a game leads to a better matchmaking rating between users. The same goes for skill level, the larger the community, the more players in the same skill range to compete with in a more balanced way.