P2E, the illusion or temptation to make money through games

The biggest buzzword in the game industry these days is P2E.

Netmarble and NC Soft jumped in stock prices as soon as a forgotten game company announced that they would prepare a P2E-based game and Wemade, which drew attention from the game industry by releasing P2E-based Mir 4. You and I are entering the P2E game market to the extent that there is no game company that does not prepare P2E games.

Some say it's the future of gaming, some say it's a giant Ponzi scam, P2E. Make money by playing games?

Is that really possible? What is P2E? P2E is an abbreviation for Play To Earn, which means making money by playing (games).

Basically, a method of selling items or characters obtained while playing the game as NFTs (Crypto Kitty). A method of selling the goods obtained by playing the game in coins (Mir 4). There are two main ways to do this.

CryptoKitties, called the original P2E game, was released in November 2017.

At that time, CryptoKitties was known as a blockchain-based game, not a P2E game.

P2E started getting attention from Exy Infinity.

Exci Infinity, which was able to sell coins obtained through gameplay, became very popular in low-income countries such as the Philippines, Brazil, and Venezuela, which were hit hard by the corona virus.

People who lost their jobs due to COVID-19 started making money with Exi Infinity, and as money-making games became popular and it became known that the revenue earned through game play was higher than the average wage, both of you jumped into Exi Infinity.

In the case of the Philippines, which accounts for 60% of all Exi Infinity users, the ripple effect on the Philippine economy was so great that game companies said, “Exi Infinity has fed hundreds of thousands of people in the Philippines.”

When the success story of Exy Infinity appeared, game companies rushed to release P2E games.

What was the first P2E game?

Can someone tell me what was the first P2E game? If you ask me, I'll answer Lineage, not Exy Infinity or Crypto Kitty.

Lineage had a differentiating factor from its contemporaneous games.

It was the maintenance of the monetary value called Adena.

In other games released at the same time, gold drops at least 2-3 times more than the cost of a potion when you catch a monster, so you can collect gold by hunting a little.

The accumulated gold had no place to use it other than to buy consumable items such as potions, so it was difficult to get rid of it.

There is a monetary inflation phenomenon, like Zimbabwean banknotes.

Lineage was a little different.

The drop rate of Adena, the in-game currency, was horribly low compared to other games.

For example, when I was a beginner, the easiest way to catch a dwarf is 10 won for catching one, but it costs 40 to 80 won for a potion to catch a dwarf.

Lineage had an extremely difficult structure to level up and level up equipment in a normal way.

However, there is one way to tailor the equipment. That's 'cash payment'.

As of the late 1990s and early 2000s, 1 million adenas were traded for about 100,000 won in cash.

It took at least a month for a beginner to collect 1 million adena with his bare body.

By investing 100,000 won in cash, you could skip this whole process

People who wanted to buy time as money and who thought of buying Adena as an investment did the smart thing.

If you hunt in a high-level hunting ground with equipment that is tailored for real money, you can recover the invested amount as it is, or earn several times the amount of money depending on your efforts, so cash transactions were active.

In business terms, it is like capital. Adena, although the exchange rate is reduced
(200,000 won → 100,000 won → 50,000 won for 1 million adena)
It played the role of money. There are several factors that made Adena able to maintain her vitality for a long time.

as previously described
(1) Low drop rate for collecting Adena in the normal way;
(2) An environment where all goods in the game can be purchased with Adena in the shop;
(3) A system in which the strength of a character is determined by the ability of the item, not the control. There are three main factors.

The most important thing is the so-called Lineage-like system, in which the strength of a character is determined according to the item's ability value.

Lineage can become stronger than its opponent if it is equipped with expensive and good items, regardless of the skill and control of the game.

When PK (Player Kill) that can kill opponents is combined with this, Lineage Like's opponent competition system is maximized.

The criterion for how strong my character is is not how long the game has played and good control, but how smart do I have to hit good items? will be

Appearance of Cash Item

The era of PC online games represented by Lineage and WOW. The main source of income for game companies was the flat-rate billing model.

It was a system where you could enjoy unlimited games for a certain amount of money, such as 29,700 won or 19,800 won per month.

In this process, the items obtained by the user were solely the responsibility of the user.

Cracks started to appear in this composition when NC Soft sold cash items that affect gameplay.

Previously, you could win the competition by purchasing with cash and matching good equipment, but now you have to purchase game items sold by NC Soft to gain an edge in the competition.

Before the cash item was released, the supplier who could obtain the item was a monster. After the cash item was released, a supplier called the game company was added.

This change has great implications for users.

It opened the way for game companies to directly sell items that were traded between users through the trading site.

Let's take an example. If item A is traded at around 10,000 won on the trading site, the game company sells cash item B, which has a similar value to A, at 10,000 won.

It's about providing a legitimate opportunity for game companies.

With the appearance of the stochastic item draw, the most vicious billing inducement system in the history of games, the subject of cash purchase changes from 'user → user' to 'game company → user'.

In the past, rare items that can be obtained from boss monsters that can be captured by dozens of high-level users can now be obtained through cash draws sold by game companies.

Users no longer have to challenge the higher hunting grounds by leveling up hard to get good items.

You can also get items by drawing.

I call this the casinoization of games. The reality of the current mobile game is that there are no adventures, challenges, and achievements, and only draws, speculation, and game company profits remain.

This is the reason why many people viewed negatively when NC Soft announced the release of a new game combining NFT and blockchain.

 

Legalization of in-person cash transactions, Mir 4

Mir 4 Global is a global service of Mir 4 that was launched in November 2020. It's been almost a year since the game was released.

The game's global service, which did not gain much popularity in Korea, was unexpectedly well received.

In December, 21st, when it was the most successful, it ranked 8th in the global Steam concurrent users ranking, and reached 1 million concurrent users within two months of its release, establishing itself in the market. The story of how WeMade, a game maker that had been forgotten in the memory of users, came to the attention of the game industry at once.

This is because Mir4 Global is a game that opened the way to legally earn money by converting items obtained through game progress into coins using block chain technology and earning profits.

Here's how. After converting 100,000 black iron ore, which can be obtained through quest progress or gathering, into Draco Coin, this coin is converted back to Wemix Coin. Transfer the Wemix Coin to Bithumb’s Wemix Wallet and sell it to buy rice. Won is created.

So, how much profit can you make by mining black iron in Mir 4? Below is an article that directly installed Mir 4 Global and experienced black iron mining.

As a result of synthesizing various experiences, as of the end of January, the average user earns from 1,000 won to 3,000 won a day by digging hard for black iron. It is the price of whether you should buy a bag of rice if you work hard for a month.

The rate of return is so low that electricity bills do not even come up, let alone the value of the effort.

Wemix Coin and Scam

January 10, 22. As it became known that WeMade sold a large amount of its own issued Wemix Coin, the WeMix Coin plunged about 30% and the WeMade share price fell by 10%.

This Wemix coin is the same coin that can be exchanged for the black iron of Mir 4 mentioned above.

The value of the coins sold by Wemix is ​​estimated to be about 200 to 300 billion won by the industry. Wemade is known to have acquired Sunday Toz, the developer of Anipang, with the sale price of Wemix Coin.

This is the so-called Wemix coin eat-and-run controversy. As the controversy continued, WeMade CEO Jang Hyun-guk said in an interview with the media, "Acquiring a game company with the amount of sales of Wemix coin and increasing the number of games that handle Wemix coin is the way to expand the Wemix ecosystem and ultimately to increase the value of Wemix coin. Work"

He explained the reason for the coin sale. At first glance, it sounds plausible, but in reality it is not.

The total circulation of Wemix coins issued by WeMade is 1 billion, and WeMade holds about 700 to 800 million coins, and as of the end of 21st, about 150 million are circulating in the market.

Multiplying the 7,700 won Wemix coin market price at the end of January by the amount of WeMade's coins, WeMade currently holds about 5 to 6 trillion Wemix coins at the current market price.

The Wemix Coin white paper states that “out of 1 billion Wemix coins issued, 74% can be used to support long-term growth”. This means that in the future, about 700 million coins can be sold and used to acquire other game companies.

It's a really novel way to raise capital. If this method is widely used in the future, game companies will not need to issue a capital issue to raise capital or obtain a loan from a financial company.

The game company can link the coin with the game, then sell the coin and use the money to buy another game company.

How much did WeMade cost to issue Wemix Coin?

It is probably less than 1/100 of the revenue that WeMade earned through the sale of Wemix Coins.

How can investors trust the coin market when a company creates and pumps a pseudo-currency that is not legally applicable, then sells it at a high point and robs the blind coin investors' pockets to make a profit?

WeMade believed in the blueprint presented by WeMade and betrayed the trust of investors who invested in Wemix Coin.

 

The reason Bitcoin has been trusted is that the developer who created it and known as the owner of the largest number of bitcoins, Satoshi Nagamoto, never sold the bitcoins.

It is estimated that Satoshi Nakamoto owns at least 1 million Bitcoins. If you calculate at 40 million won per bitcoin, Satoshi has at least 40 trillion bitcoins.

Paradoxically, holders accepted this as trust because Satoshi, the developer and early entrant who held the most bitcoins, held the bitcoins even while the bitcoin price fluctuated.

Compared to other coins, the circulation is stable, and even Bitcoin, which is used as a currency in some countries, fluctuates severely. Can people really trust the coins that companies dispose of their holdings?

The reinvestment is done with the company's capital, not by extorting money from investors.

supply and demand

In July of last year, Exi Infinity's SLP coin, which was once quoted at 400 won, plummeted to 12 won as of January 22, 22nd.

What happened was that the amount of money you could earn with Exci Infinity, which once supported the Philippine economy and was famous for its money-making games, was less than half of the average wage even in low-income countries. Why did the value of the coin fluctuate?

This is because there are many people who sell the coins they earned with Exy Infinity, but no one buys them.

This is the supply and demand curve in economics.

The core of P2E. How will the produced goods be consumed? If the supply and demand curves are not maintained, profitability will decrease and gamers who entered only for profit will exit.

In other words, the P2E ecosystem can be maintained only when there are many whale users who sincerely enjoy the game and are willing to open their wallets for the growth of their characters.

And there is one more prerequisite.

Game companies must not sell items that could affect gameplay for profit.

If the game company directly sells the item, the whales will buy the item sold by the game company, not the item sold by the users.

Game companies only play the role of market makers, not providers. Supply should be left to the user alone.

The places that are making decent games don't even mention the P's of P2E.

It is ironic that game makers with a lot of speculation and controversy are saying that P2E and NFT are the future of games.

I agree to change the legal framework to classify in-game goods as assets and make them tradable, but the reason must not be peer-to-peer or NFT.

Although the game industry is shouting for midnight efforts, it is questionable whether the game industry, which has lost the essence of game fun such as excessive billing induction and complete gacha, and deceived users by focusing only on profitability, will be able to make a proper midnight effort.

The intrinsic fun of the game is adventure and competition.

It's not about making money. I wish there were more games where you can enjoy real fun and adventure, not just as a means of making money.