Few things in the gaming industry have caused as much discussion – and division – as the rise of Web3. Blockchain games such as Axie Infinity have created a “play-to-earn movement” with in-game economies built on cryptocurrency rewards and non-fungible token (NFT) purchases. Their early success has encouraged some game developers and publishers to go all in on the play-to-earn model. That’s not just a risky move, but an unnecessary one.

Here’s what crypto and NFT-based games get right though: Tying gameplay to real-world rewards is a winning strategy for retention and loyalty. But you don’t need the blockchain to do that when there are already proven ways to reward players and drive their loyalty outside of the Web3 ecosystem. Instead of the volatile “play-to-earn” (P2E) formula, publishers can leverage the tried-and-true “play-and-earn” (PAE) strategy which has been paying off since long before NFTs and blockchain technology captured the public eye – and it’s only getting better.

The dawn of play-to-earn and play-and-earn 

Traditionally, gaming has been a one-sided marketplace: You (as a player) might buy a game from its developer, if necessary, and then spend through in-app purchases (IAP), buying from the developer. You sink time and money into games for the intrinsic value of fun, but receive nothing tangible beyond that, while the company is making all of the revenue.

Now, the landscape is evolving. 

💡Web3 tech like blockchain and NFTs has promised to make players “owners” and beneficiaries in their gaming experiences, introducing play-to-earn elements to gamers. With play-to-earn, gamers can achieve assets that have real-world value, which can then be bought and sold on the market.

💡 Play-and-earn, on the other hand, has evolved as a way to reward players materially alongside the intrinsic fun of play. While players don’t necessarily become “owners” in the same way as play-to-earn, they do achieve purchase power by earning rewards toward tangible items like gift cards.

Both avenues respond to the need to engage players in new ways and turn games into more of a two-sided marketplace. However, high-profile examples of each show that, today, play-and-earn is the more reliable option for mobile game publishers, proven to help increase player loyalty and lifetime value (LTV).

👀 Related reading: Mobile gaming trends of 2024: Top 7 developments set to define the year

Blockchain and NFTs in mobile gaming: Worth it or wait?

Most people’s first exposure to the concept of the blockchain came through cryptocurrencies such as Bitcoin. The same technology that allows the holder of a Bitcoin wallet to prove they possess currency also allows them to establish ownership of unique digital assets – non-fungible tokens (NFTs). Anyone who has ever admired their friend’s shiny Charizard Pokemon card could see how the same ideas of ownership and scarcity could lead to some interesting game dynamics when applied to a digital space.

Let’s take a closer look at Axie Infinity. It’s easy to see the appeal of this cutesy monster-battler, but its biggest draw is that it runs on the Ethereum blockchain. In today’s saturated mobile game market, players are seeking more than just entertaining gameplay to sustain their interest and investment in their favorite titles. In Axie Infinity’s case, the “more than just entertaining gameplay” lies in the game’s use of non-fungible tokens to represent in-game items. These NFTs can be bought and sold for Ethereum cryptocurrency, which translates to real-world monetary value – in some cases, more than $600,000 USD, according to Decrypt¹.

But rather than a wild success story, Axie Infinity serves as a cautionary tale for those hoping to jump on the blockchain bandwagon. Within a year of its 2021 peak, the game lost 62% of its player base and suffered a catastrophic hack that resulted in the loss of over half a billion dollars. While its developers at indie studio Sky Mavis have continued to add new features and seasonal events to support their remaining players, Axie Infinity hasn’t come close to reaching its former level of engagement.

This story is far from unique and only serves to highlight bigger issues within the blockchain and NFT marketplace. The landscape is already extremely volatile – and when an NFT game loses players, the value of its rewards drop, creating an endless cycle of setbacks and losses. Some high-profile brands such as Minecraft have even flat-out banned the use of NFTs in their game and community-led spaces.

The technology driving Web3 remains promising, and it’s possible that the marketplace will even out eventually. But that doesn’t help game publishers looking for ways to boost engagement and loyalty right now. Luckily for them, there’s no need to reinvent the wheel when there are already effective strategies that don’t rely on the blockchain or any other unproven technology.

How play-and-earn has made its name (and mark) on gaming

While they sound almost identical, there’s a big difference between “play-to-earn” and “play-and-earn.” Because of the highs and lows we’ve seen over the last few years, the term “play-to-earn” has made some gamers wary.

Many of these PAE games require an upfront cost. For example, Axie Infinity requires three Axies to start, which must be purchased with Ethereum. At the height of its popularity, this barrier to entry was seen as an investment that could potentially deliver significant returns. In the current crypto environment, however, this makes the NFT game more “pay-to-win” than “play-to-earn.” This poses a secondary issue: Data from the 2023 Mistplay Mobile Gaming Loyalty Report shows that the top reason players stop playing a game is because it becomes “too ‘pay-to-win,’” meaning it requires larger and larger investments to see any returns.

Instead of “play-to-earn,” where the value of those earnings varies wildly based on market conditions, it’s time to shift our thinking toward “play-and-earn.” Play-to-earn games like Axie Infinity and other blockchain offerings prioritize earning over playing. Basically, the goal is the reward, and the playing is incidental to the experience. That means when the rewards start to lose value, there’s no reason to stick around. 

Play-and-earn flips this around and puts the emphasis where it belongs – on the fun. This makes the “earn” part happen through real-life rewards as an added bonus, rather than the whole point of the game experience. Plus, since these rewards can be used outside of the in-game economy, they’re not subject to the same market volatility as blockchain games. While technologies like blockchain and NFTs are still unproven in capturing the attention of these gamers, the tried-and-true concept of play-and-earn provides players with perks that actually matter in their day-to-day lives.

The extrinsic rewards of play-to-earn drive motivation for deeper engagement. These rewards come naturally as an “add-on” to the experience, but the gameplay remains, first and foremost, a form of entertainment. The rewards are simply a perk, not the primary reason to keep playing.

We know play-and-earn works because it’s been around in various permutations for decades. From classic carnival games to the modern mobile ecosystem, play-and-earn games have long proven their value. Our own data from the 2023 Mistplay Mobile Gaming Loyalty Report shows that real-money rewards, like those we offer on the Mistplay platform, are a powerful motivator for attracting new players to your game:

• 84% of players said they would be interested in starting to play a game where they can play and earn tangible rewards.
• One in four players said they would even leave their current favorite game and fully switch over for such an experience.

However, those rewards aren’t the reason they continue playing: Once they’re engaged, they’re motivated by in-game progression and reaching new milestones, exploring new content and features, and ample other reasons that have nothing to do with the value of rewards.

Our data also shows that 64% of players are likely to try out other games from the same publisher. In other words, using rewards as an engagement tactic helps get new players in the door and potentially turns them into lifetime fans.

The growth of blockchain games that take a similar approach to rewarding players proves play-and-earn is rapidly becoming the new standard across channels.

👀 Related reading: What players want: Play, spend, and loyalty trends for mobile gaming in 2023

Play-and-earn is driving loyalty in mobile games

By now, it’s clear that play-and-earn is the superior loyalty driver when compared to play-to-earn. So how can you use it to make your next game more impactful, or to update your current portfolio? A number of play-and-earn strategies have already laid this groundwork and created the exact two-way-street environment you’re looking for.

For example, Mistplay takes a platform-driven approach to loyalty. We partner with game publishers to bring their libraries to our platform and help players discover titles that are relevant to their interests through our AI-driven recommendation engine, as well as our AI-driven TROAS campaigns.

In return, players can earn gift cards to the Google Play Store and some of their favorite retailers like Starbucks. This has resulted in over 30 million lifetime game installs in just seven years. Mistplay has been offering tangible rewards to its mobile gaming community since 2016. To date, our platform has given away millions in gift cards to over two million monthly active users who dedicate their time to exploring a diverse collection of over 400 games.

‍Papaya Gaming, publisher of games like Solitaire Cash and Bubble Cash, takes a slightly different approach to play-and-earn. It leverages “the thrill of competition” – a key driver of engagement, according to our Loyalty Report data – by having players compete against each other for, in its words, “real-money prizes.” All of its games utilize popular mechanics and deepen engagement with ongoing tournaments, alongside the promise of rewards. As a result, Papaya hosts 15 million tournaments every day, which has paid off to the tune of 37 million game downloads worldwide in just four years.

Then there’s Avia Games, a platform that specializes in specific play-and-earn games. Like Papaya, Avia Games leverages players’ competitive spirit across a plethora of genres. By downloading one app, players can compete in over 180 million monthly tournaments. Its library is similar to Papaya’s in content; think competitive versions of classics like bingo, solitaire, and dominoes.

These are just a few examples of how the current play-and-earn landscape works. But there are countless others – with plenty of room for innovation. And unlike blockchain games, play-and-earn is proven to foster long-term loyalty, perhaps the most important metric for determining profitable growth in a saturated gaming market. In 2024 and beyond, I encourage game publishers to consider the value of going beyond just gameplay by implementing play-and-earn opportunities to boost engagement and retain the players who invest their time in your games.

👀 Related reading: Lessons in loyalty: Cross-industry insights for mobile game publishers

How Mistplay’s play-and-earn approach fosters loyalty and growth

As a long-standing play-and-earn platform, Mistplay has helped numerous mobile developers harness the power of loyalty to grow their audiences, increase D7 ROAS, and boost retention. We’re living proof that you can reward audiences without relying on fleeting trends and volatile technology.

All you need to do is find ways to let players share in your success. In turn, players reward publishers right back by continuing to engage with their products, leading to long-term profitability that’s difficult to achieve in today’s mobile ecosystem.

To learn more about the Mistplay platform, get in touch with our experts.