Blockchain-based play-to-earn (P2E) games often rely on cryptocurrencies and NFTs to build and maintain in-game economies. However, as digital assets come under increasing regulatory scrutiny in various regions, these games face novel challenges. For example, the United States has tightened tax reporting requirements for cryptocurrency transactions, which has increased complexity for both P2E players and developers by requiring transparency of all token-related activities.
Similarly, Europe is improving its regulatory framework for digital assets. The European Union’s Markets in Crypto Assets (MiCA) Regulation, which came into force in 2024, requires crypto companies to secure licenses and adhere to consumer protection standards. This places additional requirements on P2E developers, who may need to adjust their tokenomics and gaming infrastructure to comply with these rules.
NFTs, which play a key role in many P2E games, are also highly regulated in some regions. In countries like China, NFT activity is closely monitored to curb speculative behavior. China has imposed strict controls on NFT trading to curb the growth of unregulated markets and speculative trading, significantly limiting the opportunities for P2E developers and players.
On the other hand, countries like Japan and South Korea are passing laws to protect users and organize NFT markets without hindering innovation. This creates a more favorable environment for the development of P2E games, potentially accelerating the development of region-specific projects in these areas.
Thanks to mechanics offering cash prizes and random outcomes, P2E games are increasingly viewed through the prism of gambling in some countries. For example, the UK and Australia are assessing whether certain aspects of these games may require a gaming license, raising concerns about their accessibility to the general public. For developers, this means navigating an additional layer of regulatory requirements, including the need for certain licenses in certain jurisdictions.
Modern P2E games are evolving to include multi-layered designs that work on different levels to attract a wider audience. For example:
- Multiblockchain functionality: By using multiple blockchains, players can operate in-game assets across different networks. Titles like Gods without chains rely on Ethereum to issue cards, but interact with other blockchains such as Polygon or Binance Smart Chain to provide a variety of transaction options and lower fees. This approach increases accessibility and reduces costs, appealing to a larger number of players.
- Many genres in one game: Some P2E games span multiple genres such as collectible card games (CCGs), role-playing games, and strategy games, which increases their appeal. This model allows players to interact with the ecosystem through different gameplay styles, increasing replayability and engagement.
- Cross-platform availability: P2E gaming is increasingly available on mobile, desktop and online platforms, allowing players to choose their preferred device. Games like Infinity Axia offer both a mobile app and a web version, increasing reach and extending user interaction time.
P2E platforms support developers in creating scalable ecosystems where users can earn, purchase and trade digital assets. This cross-platform approach expands access, improving the gaming experience and attracting a larger audience.
Detailed information on platform trends, dynamic and in-development P2E projects, and comprehensive data on the current state of the P2E industry can be found in our Q2 2024 report. research report.
Strict regulations on cryptocurrencies and NFTs have the potential to snail-paced down the growth of P2E games, but could also make them more resilient to financial and legal risks. Projects that meet these regulations will gain access to broader markets, increasing user confidence and attracting institutional investors.
With multi-block and multi-genre setups, P2E games can create elastic ecosystems that can operate in a variety of regulatory landscapes. This resilience will enable successful projects to adapt to local regulations and optimize global opportunities.
Developments in the second quarter of 2024 show that the future of P2E gaming will be greatly influenced by changing legal requirements. Developers must adapt to novel regulations surrounding cryptocurrencies, NFTs, and gambling to ensure long-term viability. However, the multi-blockchain and cross-platform capabilities of P2E gaming provide additional opportunities to address regulatory challenges and expand the player base.
