How Do Blockchain Games Make Money?

• By Ashley Richmond
• July 12, 2024July 12, 2024
• Blockchain

Blockchain games are games that use blockchain technology. We play these games on decentralized networks. Unlike traditional games, we own our in-game items. These games use blockchain to record and verify transactions.

Blockchain games started gaining attention around 2017. We saw the launch of CryptoKitties, a game where we could breed and trade virtual cats. It was one of the first blockchain games to show us the potential of this technology in gaming. Since then, we have seen many more games emerge. They keep evolving as blockchain technology advances.

Blockchain adds transparency and security to our gaming experiences. We benefit from true ownership of in-game assets, meaning no one can take our items away. This level of ownership is something we don’t get with traditional games. Blockchain also introduces new ways for us to earn money while playing. It changes how we interact with games and creates new opportunities for us as players.

In this article, we will take a look at how blockchain games earn money.

Revenue Models in Blockchain Games

Let’s have a detailed look at how blockchain games make money.

Here’s a comparison table summarizing the various revenue models in blockchain games, including their unique features, potential earnings, examples, and unique data.

Blockchain games offer various revenue models. Let’s examine deeply how in-game purchases, NFTs, and other methods generate income.

1) In-Game Purchases

In blockchain games, we often make in-game purchases, commonly known as microtransactions. These transactions involve small payments that enhance our gaming experience. Here’s how in-game purchases work:

• Skins: We buy skins to customize the appearance of our characters or items. These visual upgrades do not impact gameplay but make our gaming experience more personalized.
• Power-ups: Power-ups give us temporary advantages in the game, such as increased speed or strength. These purchases can help us progress faster or gain an edge over other players.
• Exclusive Items: Some games offer rare or exclusive items that we can buy. These items are usually limited in quantity, making them valuable and desirable.

In-game purchases provide a continuous revenue stream for developers. Every time we make a purchase, it supports the game’s development and maintenance.

2) Non-Fungible Tokens (NFTs)

Non-Fungible Tokens, or NFTs, are unique digital assets that play a significant role in blockchain games. Here’s how NFTs work in gaming:

• Definition: NFTs are digital tokens that represent ownership of a unique item or piece of content. Unlike cryptocurrencies, which are fungible, each NFT is one-of-a-kind.
• Role in Games: In blockchain games, NFTs can represent in-game assets such as characters, weapons, or virtual real estate. We can own, buy, and sell these NFTs.
• Revenue Generation: NFTs generate revenue through trading. When we buy or sell an NFT, a fee is often collected. Popular examples include rare items in games like CryptoKitties or collectible cards in games like Sorare.

NFTs create a new economy within games, allowing us to invest in and trade valuable digital assets.

3) Tokenomics

Tokenomics refers to the use of tokens within blockchain games. These tokens serve as the in-game currency and have various uses:

• In-Game Currency: We use tokens to buy items, pay for services, or unlock features within the game.
• Staking: Some games allow us to stake our tokens. By locking them up for a period, we earn rewards such as additional tokens or rare items.
• Transactions: Tokens facilitate transactions within the game, ensuring a smooth and secure exchange of value.

Successful games like Decentraland and The Sandbox have robust tokenomics models. These models create a thriving economy within the game, providing us with valuable and useful tokens.

4) Play-to-Earn (P2E) Models

Play-to-Earn models are revolutionizing how we interact with games. Here’s how P2E works:

• Earning Rewards: In P2E games, we earn rewards by playing the game. These rewards can be in the form of tokens, NFTs, or other valuable assets.
• Converting to Real Money: We can convert these rewards into real money through exchanges or marketplaces.
• Examples: Popular P2E games include Axie Infinity, where we earn by breeding and battling creatures, and Splinterlands, where we earn by playing card battles.

P2E models provide us with an opportunity to make money while enjoying the game, turning our gaming time into a source of income.

5) Initial Game Offerings (IGOs)

Initial Game Offerings, or IGOs, are a way for us to invest in new blockchain games. Here’s how IGOs work:

• Definition: IGOs are a fundraising method where developers offer early access to their game in exchange for funding.
• Benefits: We get exclusive content or early access, while developers receive the necessary funds to build and improve their games.
• Case Studies: Successful IGOs include My Neighbor Alice and Alien Worlds, which raised significant funds and built strong communities.

IGOs provide a win-win situation for both developers and players, ensuring the success of new games.

6) Staking and Yield Farming

Staking and yield farming are mechanisms that offer us additional ways to earn in blockchain games:

• Staking: We can lock up our tokens for a specific period to earn rewards. These rewards can include additional tokens, rare items, or other benefits.
• Yield Farming: Yield farming allows us to earn interest on our in-game assets. By providing liquidity or participating in farming pools, we earn returns.

These mechanisms incentivize us to engage with the game for longer periods and invest more in our in-game assets.

7) Advertising and Sponsorships

Blockchain games can generate revenue through advertising and sponsorships:

• In-Game Advertising: Developers can partner with brands to display ads within the game. These ads can be integrated into the game environment seamlessly.
• Sponsorships: Brands can sponsor in-game events or special content. This partnership can be lucrative, especially for games with a large and active user base.

Advertising and sponsorships provide additional revenue streams and enhance the game’s financial stability.

8) Secondary Market Fees

Secondary market fees are another important revenue model:

• Trading NFTs: When we trade NFTs on secondary markets, the game developers often receive a percentage of the transaction as a fee.
• Ongoing Revenue: This fee provides an ongoing revenue stream. Popular games with active trading communities can generate substantial income from these fees.

Every time we engage in trading, a small fee supports the game’s developers, ensuring the game’s continuous improvement.

9) Subscription Models

Some blockchain games offer subscription models to generate revenue:

• Premium Subscriptions: They utilize a premium membership model that provides exclusive content, faster progression, or other benefits to subscribers.
• Steady Revenue Stream: Subscription models create a steady revenue stream, enhancing player retention and providing continuous value.

Subscription models offer us consistent and valuable benefits while ensuring the game’s financial stability.

Also read: Top 60 Blockchain App Development Ideas.

Blockchain Game Market Trends and Statistics

Here are five key statistics and trends in the blockchain gaming market for 2025:

1. Market Growth: The global blockchain gaming market is experiencing rapid growth. In 2022, the market was valued at $4.6 billion and is projected to reach $65.7 billion by 2027, with a compound annual growth rate (CAGR) of 70.3%.
2. Role-Playing Games (RPGs): Role-playing games are the dominant segment in the blockchain gaming market. These games leverage blockchain technology to enhance gameplay by ensuring true ownership of in-game assets through NFTs. Examples include “The Six Dragons” and “Guild of Guardians,” which allow players to create, trade, and develop unique characters and items securely.
3. Play-to-Earn (P2E) Model: The play-to-earn model continues to gain traction, transforming gaming economics. This model allows players to earn real-world value by acquiring, trading, and monetizing in-game assets. This trend is supported by the integration of decentralized finance (DeFi) protocols, enabling players to stake assets, participate in liquidity pools, and earn yields.
4. Decentralized Autonomous Organizations (DAOs): DAOs are becoming increasingly prevalent in blockchain games, allowing players to participate in game development and decision-making processes. This trend empowers gamers to become active members of the community rather than passive consumers, fostering a strong community-driven approach in games like “Alien Worlds”​.
5. Virtual Real Estate: The concept of virtual real estate is booming within the blockchain gaming industry. Players can own, trade, and develop land within virtual worlds, with some plots being sold for millions of dollars. This trend is expected to continue growing, with the virtual real estate market projected to reach $5.95 billion by 2028.

These trends highlight the dynamic and rapidly evolving nature of the blockchain gaming market, driven by technological advancements and new economic models.

Successful Blockchain Games Examples

Successful blockchain games set examples for the industry. We’ll review case studies of games like Axie Infinity, CryptoKitties, and Decentraland.

1. Axie Infinity

Axie Infinity is a popular blockchain game. We collect, breed, and battle creatures called Axies. The game uses a play-to-earn model. We earn tokens called Smooth Love Potions (SLP) and Axie Infinity Shards (AXS). These tokens have real-world value. We can trade them for other cryptocurrencies or cash.

Key Successes and Milestones

Axie Infinity has seen significant success. It has millions of active players worldwide. The game has generated hundreds of millions in revenue. It has become a leader in the blockchain gaming space. The community is strong and continues to grow.

Financial Performance and User Base

Axie Infinity’s financial performance is impressive. It has attracted major investments and partnerships. The game’s user base is diverse and global. Players from the Philippines, Venezuela, and other countries use Axie Infinity as a source of income. The game’s economic impact is substantial.

2. CryptoKitties

CryptoKitties is one of the earliest blockchain games. We collect and breed virtual cats. Each cat is a unique NFT. We can buy, sell, and trade these cats. The game’s revenue comes from transactions and breeding fees.

Major Successes

CryptoKitties brought blockchain gaming to mainstream attention. It showed the potential of NFTs in gaming. The game has had several high-value transactions. Rare cats have sold for thousands of dollars. It paved the way for future blockchain games.

Financial Details and User Base

CryptoKitties experienced significant success at launch. The game’s user base grew quickly. However, scalability issues slowed down its growth. Despite this, CryptoKitties remains a notable example of blockchain gaming. It continues to have an active community.

3. Decentraland

Decentraland is a virtual world built on the blockchain. We can buy, sell, and develop virtual land. The game uses its own cryptocurrency, MANA. We can earn revenue through real estate, events, and services within the game.

Major Successes and Milestones

Decentraland has seen major successes. Virtual land sales have generated millions of dollars. The game hosts virtual events and businesses. It has partnered with well-known brands and artists. Decentraland has established itself as a leading virtual world.

Let’s Dig at Financial Performance and the User Base

Decentraland’s financial performance is robust. The game’s economy continues to grow. Its user base includes gamers, investors, and developers. The platform offers diverse opportunities for revenue and creativity.

Also read: How Blockchain Technology is Revolutionizing the Healthcare Industry.

How Players Make Money in Blockchain Games?

Players can earn money through blockchain games in several ways. We’ll explain play-to-earn models, NFT trading, and other income-generating activities.

1. Play-to-Earn Models

Play-to-Earn (P2E) models allow us to earn money while playing. We complete tasks, achieve milestones, or participate in events. In return, we receive rewards, often in the form of tokens or NFTs. These rewards have real-world value. We can trade or sell them for other cryptocurrencies or cash.

Many P2E games offer substantial earning potential. In Axie Infinity, we earn Smooth Love Potions (SLP) by battling Axies. In Splinterlands, we earn Dark Energy Crystals (DEC) through card battles. These tokens can be traded on cryptocurrency exchanges. Players in some regions use these earnings as a primary income source.

Many players have found financial success through P2E games. Some earn enough to support their families. For example, players in the Philippines have used Axie Infinity to generate significant income. Their success stories inspire others to join and participate in the blockchain gaming community.

2. Trading NFTs

We can buy, sell, and trade NFTs on various marketplaces. To start, we need a cryptocurrency wallet. We use this wallet to buy NFTs from games or other players. We can list our NFTs for sale in marketplaces like OpenSea or Rarible. Trading requires strategy to maximize profits.

Several marketplaces specialize in NFTs. OpenSea is one of the largest and most popular. Other notable platforms include Rarible, Foundation, and SuperRare. Each marketplace has its own unique features and user base. We choose based on our needs and the type of NFTs we trade.

Successful NFT trading requires knowledge and strategy. We should research trends and popular NFTs. Timing is crucial; buying low and selling high is the goal. Engaging with the community and staying informed about new releases can also boost our trading success.

3. Participating in IGOs

Initial Game Offerings (IGOs) allow us to invest in new blockchain games. We can participate by buying tokens during the offering. These tokens often give us early access or exclusive in-game items. We need to stay updated on upcoming IGOs and be ready to invest.

IGOs offer significant potential returns. Early investors can see the value of their tokens increase as the game gains popularity. However, there are risks. Not all games succeed, and we can lose our investment. Careful research and a strategic approach are essential.

Several successful IGOs have rewarded early participants. My Neighbor Alice and Alien Worlds are examples. Early investors in these games have seen substantial returns. Their success stories highlight the potential and risks of IGOs.

Have a look at the top cryptocurrency exchange software development companies.

Emerging Trends And Future of Blockchain Gaming

The future of blockchain gaming looks promising. Let’s explore emerging trends and predictions for the next decade.

1. Integration of VR and AR

Virtual Reality (VR) and Augmented Reality (AR) are set to revolutionize blockchain gaming. We will experience more immersive games. VR and AR can enhance our interaction with the game world. Combining these technologies with blockchain can create unique gaming experiences. While reading this you may also like diving into How Much Does VR App Development Cost?.

2. Cross-Platform Interoperability

Cross-platform interoperability is another exciting trend. We can play blockchain games across different devices and platforms. This flexibility enhances our gaming experience. We can switch from our computer to our mobile device seamlessly. It also allows more players to join and participate in the same game ecosystem.

3. Next Level AI and Machine Learning

Artificial Intelligence (AI) and Machine Learning (ML) are making games smarter. These technologies can create more dynamic and responsive game environments. We will face more challenging and adaptive opponents. AI can also personalize our gaming experience based on our preferences and behavior. Let’s see how artificial intelligence is shaping digital transformation.

4. Technological Advancements

Technological advancements will drive the future of blockchain gaming. We will see better scalability solutions. This will address current issues with network congestion and high fees. Improved security measures will protect our assets and data. These advancements will make blockchain games more accessible and enjoyable.

5. Market Consolidation and New Entrants

We will witness market consolidation. Leading games and companies may merge or form partnerships. This consolidation will create stronger and more diverse gaming ecosystems. At the same time, new entrants will continue to emerge. Innovation will remain high as new games and technologies are developed.

As I said earlier as well, the blockchain gaming market is expected to grow exponentially. Experts predict a multi-billion dollar industry by the end of the decade. We will see more games adopting blockchain technology. This growth will attract more players and investors.

Also read: How Blockchain Technology is Transforming Dating Industry.

FAQ’s

In this section, we’ll answer common questions about blockchain games. These FAQs will help you understand the basics and get started.