In 2025, Web3 games are undergoing a major transformation. The "play-to-earn" (P2E) model, once dominant with titles like Axie Infinity, is being replaced by approaches focused on digital ownership and content creation: "play-and-own" (P2O) and "play-and-create".
The Origin of Play-to-Earn and Its Limitations
The play-to-earn model gained visibility in 2021 through games like Axie Infinity, where players could earn cryptocurrency rewards by completing tasks or competing. This approach introduced direct financial incentives but soon encountered sustainability issues.
Main challenges included token inflation, oversupply of assets with no real use, and the constant need for new users to sustain the economy. In Q2 2025, 8% of Web3 games ceased operations, revealing the model’s fragility.
New Models: Play-and-Own and Play-and-Create
To address these issues, more stable and participatory alternatives have emerged.
Play-and-Own (P2O)
This model allows players to own digital assets, such as characters, land, or items represented by NFTs, that have value both in and out of the game. A clear example is Illuvium, where players collect creatures called Illuvials. These assets can be traded on decentralized marketplaces, with value defined by rarity and demand.
Benefits include a more balanced economy and the ability for players to retain control of their assets beyond the game environment.
Play-and-Create
Here, users not only play but also create experiences, levels, or items within the game. Tools like VoxEdit or The Sandbox’s Game Maker support this process. In this metaverse, creators publish their content and generate income through interactions or sales.
These new models aim to deliver more sustainable and engaging experiences, where players are not only part of the game but also own and build within it.
With a projected market exceeding $65 billion in the coming years, this shift is set to redefine how users, developers, and the blockchain ecosystem interact.
| Model Comparison | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Model | Definition | Example | Advantages | Challenges | |||||
| Play-to-Earn (P2E) | Earn tokens by playing | Axie Infinity | Immediate rewards | Token inflation, unstable economy | |||||
| Play-and-Own (P2O) | Ownership of tradable assets | Illuvium | User control, long-term value | Dependent on external markets | |||||
| Play-and-Create | Create and monetize content | The Sandbox | Active participation, creativity | Learning curve for new creators | |||||
Why Is the Model Changing?
Several factors are driving this transition:
- P2E Unsustainability: Tokens like Axie’s SLP lost over 90% of their value since peak.
- Demand for authentic experiences: Both players and developers now prioritize fun, creativity, and autonomy.
- Tech advancements: Accessible tools and AI integration enable NPC creation and personalized gameplay.
- Support from established studios: More traditional studios are embracing Web3 tech.
- Community incentives: Platforms like Mirror allow decentralized monetization, encouraging active participation.
Current Impact and the Future of Web3 Gaming
For Players:
- Greater digital autonomy
- New income opportunities for content creators
- More personalized and dynamic experiences
For the Industry:
- GameFi market projected to reach $50–100 billion in 2025
- Increased AI and blockchain integration in AAA games
- Expansion of user-driven metaverses like The Sandbox
Challenges:
- Technical learning curve for new creators
- Crypto market volatility
- Unclear regulations in some countries
Despite these barriers, legal clarity and technical innovation are expected to expand adoption in the coming years.
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