Labor, Leisure And Money: Decentralized Gamers Are Setting The Rules For The New Digital Economy

It has been a decade since the U.S. National Endowment for the Arts gave its official blessing to video games as the 10th Form of Art, and the $336 billion gaming business is already among the world's largest media category, bigger than Hollywood, music or streaming services.

How video games changed leisure, entertainment and art industries for good is a well-known story. But the next chapter, perhaps the more disruptive, is just starting to be told. Blockchain-based decentralized play-to-earn (P2E) video games are unleashing a revolution in virtual -and real- economies and are about to redefine our notion of labor, time and money.

The complex recipe for video games' success has been studied for decades, and it can be summarized in its three main ingredients: interactive capability, technological progression and community building. Since nuclear physicist William Higinbotham devised the primitive "Tennis for Two" in 1958, video games have evolved at a prodigious pace, constantly leveraging any hardware and software advance to improve graphics, sounds, story complexity and playability until they have become multilayered art-works. At the same time, every technological breakthrough has enhanced participation to the point of total immersion and complete interaction.

Right now, the combination of several cutting-edge, fast-evolving technologies puts us at potentially the most exciting moment in video games history. From our first TV sets, to mobile phones, to the cloud, video games have conquered all possible devices. Now, VR/AR equipment is a step closer to making both the virtual and the real world more immersive than ever. At the same time, we are adding layers of content, moving from developers' content, to user-generated content, to AI-generated content, opening new paths for world-building.

And also the increasing high-speed 5G mobile connectivity is allowing community engagement to grow at a deeper level, from the initial single-player era, to multiplayer to massive interactive live events, from cult-size fan clubs to popular magazine forums to hyperactive online communities.

The new play-to-earn paradigm

But it is in the blockchain decentralized ecosystem where the video game's next evolution is literally changing the game. Until recent years, they were dismissed as a fad, but now cryptocurrencies are here to stay. With over 300 million users worldwide – and more than 18,000 businesses – we are witnessing an unprecedented rate of crypto adoption.

It is still a challenging environment, but the bridge between central-bank-issued currencies and cryptocurrencies is now well established. Crypto makes digital money real. The other fundamental leap in digital value comes in the form of NFTs or non-fungible tokens. These are capable of turning anything in the digital world into a unique asset. NFTs mean everything from identities to art can be stored or traded. In combination, they unleash the potential of decentralized virtual marketplaces, creating a revolving door between material economy and virtual one.

And this is already happening with decentralized P2E video games. Take "Axie Infinity" for example. The Vietnamese studio game went from 4,000 players to 2 million daily users and a $2 billion business in a few months after becoming popular in developing countries such as the Philippines or Venezuela. In those economies, the monetization potential of assets in decentralized video games is perceived as a viable livelihood – another option on the growing gig economy menu. In some cases, they offer better prospects than work "in the real world."

Speaking from experience, I have seen how Pegaxy, a racing game with futuristic recreations of the mythological winged horse Pegasus, has soared in just a few weeks with more than 200,000 races where participants compete for crypto rewards that they can cash out. All this in a game, which is completely free to play.

And it is not just emerging markets where this new labor-leisure paradigm is taking hold. More and more gamers in the U.S. and Europe have embraced these games that combine your unique NFT characters with the possibility to cash in on your efforts and advances. Crypto holders with low-to-medium wages are quitting their jobs in great numbers to focus on the crypto economy, just one factor fueling "the Great Resignation" phenomenon in developed countries.

Play-to-earn pioneers

Of course, we don't yet have a decentralized Grand Theft Auto or play-to-earn World of Warcraft. Yet. It takes years to develop a high-quality game and the first-movers in the space are generally crypto natives making mostly basic games (although no one should dismiss how a simple game can become a hit, such as 2014 Flappy Bird). Still, more and more players are embracing what is the dawn of a new era for gaming.

This is just the beginning. There is an obvious connection between the blockchain and the gaming community, and NFTs and virtual reality are bringing them together. It is only a matter of time before we see gamers onboarding the blockchain-powered metaverse, designing their unique identities and worlds, trading their special items and monetizing their assets and abilities. Earning, saving and spending in crypto. Play-to-earn games are just the pioneers, building the foundations of the new digital economy, and in doing so, redefining our concept of leisure, labor and money.

(Corey Wilton is a co-founder of Vietnam-based Pegaxy, a play-to-earn racing video game)