Play-to-Earn Games: Can You Still Make Money Playing Crypto Games?

In 2021, people in the Philippines were paying their rent by playing a mobile game about cartoon creatures. Journalists wrote profiles about it. Venture capital poured in. The phrase “play-to-earn” entered mainstream vocabulary.

By 2023, most of those players had lost the majority of what they’d earned. The game’s token had fallen over 99% from its peak. An entire scholarship ecosystem had collapsed.

The story of play-to-earn is not a simple success story or a simple scam. It’s more complicated and more instructive than either version.

Here’s what actually happened, what survived, and what play-to-earn looks like now.

What Is Play-to-Earn?

Play-to-earn (P2E) is a game model where players earn cryptocurrency or NFTs by playing. Instead of spending money on a game and receiving only entertainment in return, you receive digital assets with real market value.

The idea sounds straightforward. The mechanics behind it are less so. In traditional gaming, in-game items (weapons, skins, characters) exist on a company’s server. The company owns them. If the game shuts down, those items disappear. You cannot sell them outside the platform.

Blockchain changes that. In-game items represented as NFTs are recorded on a public ledger. You hold them in your own wallet. You can sell them on any compatible marketplace, to anyone, at any time, regardless of whether the game is still running.

This shift from “you license this item” to “you own this item” is the foundational innovation behind P2E gaming. Everything else (the tokenomics, the scholarship models, the yield mechanics) is built on top of that.

How P2E Games Work Financially

Understanding the economics of P2E is essential before touching any of these games. Most follow a similar structure.

The token model

Most P2E games have two tokens: a governance token (limited supply, higher value) and a utility token (earned through gameplay, higher inflation). In Axie Infinity, these were AXS and SLP, respectively. In most similar games, the structure is comparable.

Players earn the utility token through gameplay. They can sell it on exchanges for real money. The governance token is typically purchased to access the game.

The entry cost

Most P2E games require upfront investment: buying NFT characters, land, or equipment before you can play. This creates immediate skin in the game for new players and generates initial revenue for developers.

Where the money comes from

This is the question most coverage of P2E ignored in 2021. In a functioning P2E economy, the utility token needs a sustainable source of demand – people buying it for reasons beyond reselling it to the next player.

When that demand doesn’t exist, the model becomes structurally dependent on new player inflows. New players buy in, providing the liquidity that pays existing players. When growth slows, token prices fall. When token prices fall, the earnings in dollar terms collapse, and when earnings collapse, new players stop joining. The spiral runs in one direction.

Understanding this before you invest in any P2E game is not optional. It’s the difference between an informed decision and a painful lesson.

Axie Infinity: The Rise

The game Axie Infinity was launched in 2018 by the Vietnamese studio Sky Mavis. It’s a Pokémon-influenced game where players collect, breed, and battle creatures called Axies, each one a unique NFT.

Players earned Smooth Love Potion (SLP) tokens through battles. SLP could be sold on exchanges. The governance token, AXS, allowed holders to vote on the game’s development.

During the 2021 crypto bull market, the economics looked extraordinary. SLP was trading at prices that translated into meaningful daily earnings, enough to cover living expenses in countries such as the Philippines and Indonesia. Stories circulated of families building houses on Axie earnings. Scholars, players who borrowed Axies from owners in exchange for a share of earnings, numbered in the hundreds of thousands.

At peak, Axie Infinity had approximately 2.8 million daily active users. AXS reached a price of around $165 in November 2021. Total in-game trading volume exceeded $4 billion.

For a brief window, the premise held: you could genuinely earn a living playing a video game.

What Went Wrong?

The structural problem with Axie’s economy was always there. SLP had no demand source beyond the game itself. Breeding Axies required SLP, but breeding created more Axies, which created more players earning SLP. The supply grew faster than any organic demand could absorb.

When the broader crypto market turned in early 2022, the feedback loop reversed. SLP price fell. Daily earnings in dollar terms dropped sharply. Scholars began earning less than minimum wage. New player registrations slowed. The drop in new players reduced buy pressure on AXS. AXS fell further.

By mid-2022, SLP had lost over 99% of its value from its peak. AXS had fallen from $165 to under $10. For players in the Philippines who had relied on Axie income, the collapse was not an abstract financial event; it directly affected their livelihoods.

Sky Mavis was not a bad actor. The game was real, the team was legitimate, and they’ve continued building. But the tokenomics were unsustainable at scale, and the correction was severe.

This pattern, explosive growth followed by token collapse, was repeated across dozens of P2E games between 2022 and 2023. Pegaxy, CryptoBlades, DeFi Kingdoms, and many others followed similar trajectories.

The Ronin Hack

In March 2022, the Ronin Network (the Ethereum sidechain on which Axie Infinity ran) was exploited in one of the largest crypto hacks in history. An attacker compromised validator nodes and drained approximately $625 million in ETH and USDC from the Ronin bridge. At the time, it was the second-largest crypto hack ever recorded.

Sky Mavis eventually reimbursed affected users after raising funds from investors. But the hack accelerated the loss of confidence in the ecosystem and added hundreds of millions in liability to a company already managing a collapsing token economy.

The Ronin hack matters beyond Axie. It demonstrated that Layer 2 bridges and sidechains, used across many P2E games to reduce fees, carry a significant security risk. The infrastructure that makes blockchain gaming cheap to use can also be a concentrated point of failure.

GameFi: What Survived the Crash

Not everything collapsed. The crash of 2022–2023 cleared out the purely speculative projects and left behind a smaller group of teams serious about building actual games.

Gods Unchained – A trading card game where cards are NFTs on Immutable’s Layer 2. It functions as a real game first. The NFT economy is secondary. It has maintained a consistent player base through the bear market.

Illuvium – An open-world RPG with high production values, built on Immutable. It took years longer to ship than announced, but it has released playable content. The team has consistently prioritized game quality over token mechanics.

Pixels – A farming and social game that gained significant traction in 2024 on the Ronin network. It represents a shift in P2E design: lighter mechanics, lower entry cost, and a more casual audience.

Star Atlas – An ambitious space MMO built on Solana. Development has been slow, and the scope is enormous. The final game doesn’t yet exist, but the project remains active and well-funded.

Off The Grid – A battle royale with blockchain elements, released in early access in 2024. Notable for attempting to reach mainstream gamers rather than crypto-native players first.

The common thread among surviving projects: they invested in making the game worth playing regardless of token price. That distinction matters more than any tokenomics design.

Web3 Gaming Now – The Honest Picture

The phrase “play-to-earn” has largely been replaced by “play-and-earn” in developer communications. That shift is deliberate and meaningful.

Play-to-earn implied the primary motivation was financial. Play-and-earn acknowledges that a game needs to be fun first; earning is a secondary feature, not the core value proposition.

The broader Web3 gaming space in 2026 is smaller than its 2021 peak hype suggested but more substantive than its 2023 trough implied. A few honest observations:

Institutional infrastructure is stronger. Immutable, the Layer 2 focused on gaming, has partnerships with major traditional game studios. The technical rails for Web3 gaming are more mature than they were in 2021.

Player expectations have shifted. The audience that came to P2E purely to earn has largely left. The audience that remains is more interested in digital ownership as a feature than in speculative token income.

Most new entrants still have unsustainable token models. The 2021 pattern — two-token system, inflationary utility token, speculative governance token — is still common. Be skeptical by default.

The games are getting better. This is the most important development. Early P2E games were primitive by conventional gaming standards. The gap between blockchain games and mainstream titles is narrowing.

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