cryptonews.net
A recent report by blockchain research firm Messari suggests bet-to-play could represent a “10x paradigm shift in crypto gaming,” with skill-based gameplay gambling leaving play-to-earn and play-to-own models in the dust.
Although bet-to-play (B2P) has been hailed as a revolutionary model that allows gamers to effectively bet on themselves, there is a major potential roadblock that might prevent it from making good on its apparent promise: the unclear regulatory picture around this type of game could cause considerable disruption down the road for builders and players alike.
Indeed, stringent gambling legislation – the sort that has crippled countless crypto casinos and other risky enterprises over the years – could have powerful effects on Web3’s budding B2P industry. So despite the hype, now is not the right time to go all-in.
What is bet-to-play gaming?
In a nutshell, bet-to-play compels players to wager money for the right to play skill-based games to win rewards.
The model bakes gambling into the gameplay level, with players ponying up to create a collective prize pool and smart contracts facilitating rewards for the most skillful gamers. And the winner takes all. For instance, ten players could each pledge $2 (or 2 ETH) for the potential to win $20. But there is no real element of chance at play, as gamers retain control of their destinies and rely on technique to triumph..
According to Messari, this all-or-nothing model is far more sustainable than its predecessors, as 100% of revenues can be derived directly from gameplay if the developer desires. And the B2P model has already become highly popular in Web2. Known as “real-money games” outside of web3, these games sit at the intersection of two monster markets: mobile games, which saw over $100 billion in revenue for the first time last year, and iGaming, which has been on a similar upward trajectory.
Today, the real-money market is estimated at a cool $2 billion, with thousands of mobile releases available on the Apple and Samsung stores. But the success of this market has depended heavily on a mechanism that is anathema to the Web3 ethos that informs how creators build B2P games: geo-blocking.
Are real-money games incompatible with Web3?
Real-money games’ tremendous success has relied on studios’ willingness to geo-block access to certain users to comply with local regulations. This action, however, is at odds with the core principles of web3, which emphasize decentralization, transparency, and inclusivity.
If bet-to-play web3 games are forced to adopt such restrictive measures, doesn’t that defeat the whole point of blockchain-based games, which are supposed to delegate power away from central authority?
Some studios pursuing bet-to-play models might refuse to restrict access to their releases. But, as we saw with crypto gambling platforms, governments – including those in China, Thailand, and South Korea – can simply step in and limit access themselves, demolishing user engagement in one fell swoop. While a B2P game studio could mount a legal challenge, it would entail considerable risk and expense – much more than many small studios can afford to take on.
On the face of it, it seems premature to say that bet-to-play will dramatically overhaul either the ownership-based model (play-to-own) or what can broadly be described as the playing-and-trading model of P2E. We just don’t know what B2P’s regulatory reality will be or how much studios will have to compromise on their model.
A risky pivot
Expect many game builders and investors to gravitate towards B2P, intrigued by Messari’s proclamations and the prospect of riding another wave. But in time, the game studios that do choose to pursue this route will likely face an important choice: compromise on Web3 values and geoblock users, or move forward regardless and risk regulatory repercussions. Of this latter category, only those who have the extensive resources necessary to confront compliance challenges head-on will survive without significant damage to their accessibility and user base. For the vast majority of builders, though, this isn’t the time to make such a risky pivot.
In the meantime, there are many other paths for studios that are seeking a lower-risk route to success. And they’ve already paved the way for new creators to follow: Web2 and Web3 games that offer frictionless onboarding, terrific design, and easy accessibility – combined with in-app purchases and other proven monetization strategies – will always be in vogue, while trends come and go. And no matter what the future of B2P looks like, Web3 studios can continue to find ways to augment traditional games with blockchain-based ownership to create deeper, more flexible marketplaces for in-game commodities.
While bet-to-play has undoubted potential, decentralization and gambling laws will always make odd bedfellows. Ultimately, only time will tell how gambling regulations affect the nascent B2P sector and whether or not it represents a “10x paradigm shift” in crypto gaming. For now, a healthy sense of skepticism.
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Corey Wilton is the co-founder and CEO of Mirai Labs, a leading international Web3 gaming studio headquartered in Vietnam. Mirai Labs’ first release, Pegaxy, was recognized as the second-most popular crypto project in the Philippines in 2022.