Selling Pressure

The play-to-earn concept is a new paradigm that will redefine how players participate in game development and generate monetary rewards through a game. At the same time, the novelty of this concept may threaten the sustainability of the game economy if monetary rewards are not well- structured and designed. In this regard, we define an unsustainable game economy to be a state in which an inflationary supply of tokens outpaces the demand for tokens.

In many play-to-earn, blockchain-based games today, the sustainability of the game is supported solely by new player growth. Typically, when a game is first released, players are required to purchase tokens to buy in- game collectibles before they can start playing and earning. The inflow of tokens from the buying of in-game collectibles would offset the outflow of tokens issued to players as monetary rewards. In such a scenario, the game economy can sustain itself on its own for as long as it can attract enough new players.

However, as the game reaches a plateau and new player growth declines, the inflow of tokens slows while players continue to earn tokens from the game and sell them on the exchange. This creates a continuous selling pressure in the market and negatively affects the tokens' value. Eventually, the entire play-to-earn concept collapses, as it is no longer attractive to earn tokens from the game itself.

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