Play-to-earn games or crypto games are one of the hottest topics of 2021 due to their lucrative nature. Basically, it allows regular people like you and me to invest in a game, play it, and earn tokens that can be converted to cash. But aside from the earning part, what are its other effects, and what are the lessons we learned from it? Here are some of them.
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Developing countries are the biggest player bases
Play-to-earn games or P2E depend on investors or new players to survive. The bigger the player base, the better. And the players usually come from developing countries like the Philippines, Venezuela, and Brazil. Take Axie Infinity, for example. According to ActivePlayer.io, the Philippines account for 40% of their player base, followed by Venezuela.
P2Es have become a “sideline” for many Filipinos to augment their income. This is amplified by the pandemic when many lost employment as businesses suffered due to lockdowns. P2Es helped make ends meet either through investing their savings or through “scholarships.”
Fueled demand for better internet and mobile devices
P2Es requires that you play it on a PC, laptop, tablet, or smartphone. The more mobile, the better, as it allows you to play the game almost anywhere. As more people play, the demand for such devices increases. Those who already own a laptop for work might purchase another dedicated for P2E games. Those who want to play on a smartphone will be more careful when purchasing new devices as they’d want to be sure that it has enough powerful hardware to run multiple accounts.
Then there’s the internet. You will need a good connection if you want to access your account, claim tokens, make trades, and cash out. If you don’t have internet, you won’t be able to earn. Given that requirement, Filipinos will demand more from their ISPs to play P2Es, especially if they will heavily rely on it for income.
It emphasized the importance of DYOR
P2Es are considered high-risk investments, meaning there are high rewards but with a high risk that you will lose your investments. That’s why then a P2E project tanks or fails, or the value of the token drops significantly, you will lose your money. That’s why it’s sad to see people panicking saying that they used all their savings thinking it’s a safe investment.
That’s why you’ll often hear the acronym DYOR which stands for Do Your Own Research and that to “only invest what you can afford to lose.” Fundamentals in stock investment would provide a strong foundation in the crypto space. Although different from the government-regulated stock exchange, the knowledge on how volatile markets behave would be helpful.
Those who are new to the P2E industry should also research cybersecurity risks in the crypto space. There are plenty of instances of players losing funds from their crypto wallets or losing their valuable NFTs to hackers and scams. Again, DYOR is a must on these things.
It highlighted the importance of digital banking and its security
Banks have been pushing their digital services for a while now and were accelerated during the pandemic. Those who think they can benefit from online transactions took advantage, while those that rely on traditional banking, do not.
But with the advent of P2Es, those who want to earn from a project have no choice but to create digital wallets and bank accounts. The coins earned from the game will go to their crypto wallet (like Metamask), then to their Binance wallet where it will be sold for fiat, which is then transferred to their own bank accounts or e-wallets. The more P2E projects come out, the more people would invest and open accounts. Banks that have more friendly policies on incoming crypto-related transactions will be the most popular option for P2E players.
However, this also put a spotlight on the online security of banks as they have become big targets for heists. The BDO incident in December is a good example of that when the hacker siphoned money from BDO accounts and transferred it to a UnionBank account under a fake name, and used the funds to buy Bitcoin worth PHP 5 million from a cryptocurrency market. It raised important questions like how someone can create an account using a fictitious identity when banks are supposed to be strict and have KYC policies in place.
It called for regulation
P2Es have the potential to produce significant income that it has got the attention of regulators in the country like the Bangko Sentral ng Pilipinas (BSP) which, in August, said that it is actively monitoring Axie Infinity, how players use and exchange tokens or cryptocurrency assets known as Smooth Love Potion (SLP) as a form of payment, and the extent of its merchant network.
The Department of Finance (DOF) and the Internal Revenue (BIR) also emphasized that income from P2Es is subject to income tax. Sky mavis event issued a statement reminding players to abide by the laws of their home countries.
These also raised questions on how a government can regulate an online industry that works on a decentralized system.
Given the realizations and lessons mentioned above, it’s amazing to think that Play-to-Earn or P2E games, games that don’t even require a powerful and expensive CPU and GPU, have that much impact to help people with their finances through the pandemic, put into the spotlight digital banking and its security, get the attention of government regulators, and exposed how Filipinos can still fall for scams and hacking. And it’s just starting. We’ll definitely feel more of its effects as it becomes more popular and accessible.
