Metaverse & Play-To-Earn Gaming: Benefit or Bane for the Developing World?

It’s June 2021. You are in Manila, and the temperature is touching a sweltering 310C. Normally you would be at work, but since the COVID-19 pandemic took over the world in March 2020 and forced you and everyone you know into a (seemingly never-ending) lockdown, you have been let go by your previous employer. Your attempts into entrepreneurship/self-employment have failed miserably. While the job market in the Philippines is slowly recovering, interestingly you are not in any rush to get employed. Your secret? You have started earning a living by playing video games on Axie Infinity, a blockchain-based play-to-earn gaming company.

Sound too good (or absurd) to be true? Think again. This is a commonplace story in several developing countries including Indonesia, the Philippines and parts of Africa and Latin America, where several people who lost their jobs during the pandemic found an alternate way to make a living and provide for their families by playing blockchain-/cryptocurrency-based video games. And just when you thought the world of Ethereum, NFTs and DeFi was getting hard to keep up with, there has emerged a new but increasingly powerful metaverse phenomenon that has the potential to transform not just the future of cryptocurrency and gaming but the future of work itself: play-to-earn (P2E) gaming.

So what is play-to-earn gaming?

At a high level, players earn money in games like Axie Infinity by unlocking tokenized in-game items that they can then sell in the game and/or on other online platforms and/or in exchange for fiat currency.

Confused? Don’t worry, us too. To better understand what exactly is play-to-earn (P2E) gaming, it is helpful to understand how this phenomenon came up. ETH-backed NFTs[1] first came on our radar in 2017[2] with the arrival of the now-famous project CryptoPunks. However, mainstream consumer interest in and adoption of NFTs only really picked up (and subsequently skyrocketed) in January 2021. What was particularly interesting about the feverish rise in demand for NFTs was that it fuelled a similar increase in the mining and creation of currencies such as ETH without any actual increase in their value. As we have learned in economics, such situations are ripe for hyperinflation, so there emerged an understanding within the crypto community that the production of new NFTs had to, in some form, be linked with the input of labour in order to justify changes in value[3]. To create this link between ownership of digital tokens and human effort, crypto developers turned to the gaming industry not only for its vast and growing user base but, more importantly, for the in-game content that players can purchase during their games. While such tokens were formerly owned by the game developers (e.g. PokemonGo owns the Pokémon characters that we see in the game), there was an opportunity to tokenise these digital assets into NFTs using blockchain and enable players to own the unique digital content that they win or purchase. Thereafter, if step one was tokenising the in-game content, step two was leveraging the decentralized integrity and security of these digital tokens to enable players to also sell them outside the platform where they are created and thereby generate real-world value for their content[4][5]. In this manner, P2E gaming has combined NFTs, DeFi (decentralized finance) and video gaming to not only provide an economically sustainable solution for the budding ETH and NFT industries but also a credible source of real-world income for gamers[6].

To explain how P2E gaming has become so popular (especially in developing countries), let’s go old-school and use our favourite economic concepts, demand and supply:

Demand-driven growth

As with all things related to the metaverse, there has been unprecedented consumer hype (demand, in simple economic terms) around P2E gaming. There are two key underlying reasons:

  1. A large, readymade customer base: as a result of the widespread unemployment due to the COVID-19 pandemic, there was a sizable group of people (especially in developing countries) who were out of a job and had no way to make a living. In countries where there is high literacy, widespread smartphone penetration and an avid gaming culture such as the Philippines, the arrival of P2E gaming (promoted by new-age gaming companies such as Axie Infinity) immediately attracted these unemployed players, who were interested in gaming and were keen to earn money regardless of their interest in cryptocurrencies. As consumer demand grew, so did the options provided by companies as Yield Games Guild to gain access to Axie tokens, which led to more customers signing up to play and widening the customer base.
  2. Strong network effects: beyond gaming and cryptocurrency having two of the biggest online communities, a core reason behind high consumer demand for P2E gaming has been the unique, deep-rooted community that has come up around the same. As more players join Axie (for example), the value of being part of the Axie community (whether online or in person) increases, thereby incentivising more people to start playing and the cycle continues. More interestingly, as these players aren’t just gaming together but also exchanging NFTs/tokens on these (and other) platforms, their relationships are evolving from being purely social to now having an economic component as well, which reinforces the existence and strength of the online community. Finally, as the growth of web3 prompts such players to increasingly build their lives online, it’s possible that the bonds formed through these games will extend to other transactions e.g. where to become a virtual landowner and which Guilds to contribute towards etc.

Supply-led growth

From a supply perspective, the growth of the P2E gaming model is driven by not only gaming platforms such as Axie Infinity and StarTerra (who are critical for the provision of games and the tokenisation of in-game content) but also ancillary platforms such as Yield Games Guild (who make the otherwise-prohibitively expensive tokens that are needed to enter the games affordable and accessible for new players), larger tech companies such as Meta and Microsoft (who are increasing their investment, and thereby generating broader interest, in this space) and other DeFi/web3 enablers[7]. In this manner, as new players enter and plug in outstanding holes in the ecosystem, the overall supply ecosystem for P2E gaming is becoming increasingly “full service” to offer increasingly frictionless interactions (whether social or economic) and greater access/participation across geographies, which will in turn drive customer demand across not only emerging economies but in developed countries as well.

And now for the main question: is P2E gaming something we should look forward to?

Before we try to answer whether P2E is a boon or a bane, especially for developing countries, it is important to consider the implications of this phenomena on three levels:

I. Link between P2E gaming and cryptocurrency – is the current model too dependent on the value of crypto?

Gaming industry experts believe the merger of cryptocurrency and gaming has always been inevitable, especially since the advent of unique digital currencies within games. We’ve already seen this with current gaming behemoths like Roblox that offer their own in-game currency, Robux, pegged to the USD (indeed, this is currently worth more than the Russian ruble) and have managed to create an entire socioeconomic ecosystem based on this currency within their gaming “metaverse”. What makes Axie different from traditional games (and therefore relevant to emerging economies) is that the currency that they have chosen to underpin their games is cryptocurrency that presently carries considerable value in the broader metaverse and in the real world. However, this is also a double-edged sword – gamers can only earn value and benefit from games such as Axie Infinity for as long as the underlying cryptocurrency has considerable value in the digital and the physical world. Given how volatile cryptocurrencies have proven to be, it is unclear whether a gamer in Indonesia should truly consider his “job” as a gamer on Axie Infinity as a stable profession (beyond accepting such volatility as part of “understanding how to play the game well”[8]).

II. Impact on “phygital” interactions – is the current model a metaverse self-fulfilling prophecy?

Gamers within the P2E industry can (and currently do) convert most of their in-game earnings into fiat currency (after all, we’re talking about the unemployed population in developing countries, for whom the first priority is getting food on the table and taking care of their families). However, this is unlikely to remain the case for much longer. Key stakeholders in the industry, including companies such as Axie, are increasingly pushing for players to retain their winnings within the metaverse, whether that’s buying “virtual” land/real estate, investing in NFTs, re-investing earnings back into the games etc. As this trend continues and grows, it will be critical to ensure that the gamers, especially those from developing countries, are truly informed about their choices and the implications. It will also be important for governments to consider their own strategy should a large portion of the employable workforce start transitioning to the metaverse. Which brings me to the most important implication…

III. Implication for the future of work – is the current model poised to upend how work will be conducted within and across nations, and are governments prepared to handle this change?

Given how lucrative P2E gaming has proven to be, it is not surprising that we are witnessing a large portion of the workforce in countries such as Indonesia and the Philippines (where Axie has a strong presence) forsake stable jobs/careers in favour of playing games on Axie[9]. Furthermore, given how decentralised not only the job is (you don’t need to go to the Axie office to play its games) but also its perks are (Axie tokens can be traded anywhere), we’re also seeing gamers in other parts of South Asia, Africa and South America start to follow suit. And this is all happening without any formal contract of employment for these gamers by Axie or any formal regulation/taxation policy by the government for these earnings. In this manner, Axie and the P2E gaming industry is doubling down on the gig economy phenomenon and achieving unprecedented growth with little to no commitment for those driving this growth or liability towards regulatory bodies. If governments, especially in developing countries, do not take heed, it’s possible that they may be too late to protect their citizens or ensure the ongoing growth of a whole new (and undeniably complex) industry in a manner that promotes overall well-being.


In his book “21 Lessons for the 21st Century”, Yuval Noah Harari states that “humans are better at creating things than maintaining them” – in the case of P2E gaming, there is no doubt that there is an exciting opportunity to inject value into the metaverse by tapping into existing behaviours and preferences of the local population beyond crypto nerds, especially in developing economies that have been hard hit by the pandemic. Having said that, it will be imperative for governments and regulatory bodies to step in and set up the right systems sooner rather than later to ensure that the identified opportunity continues to generate value for all players in the ecosystem.

Nandini Mazumdar (MBA 2022) is a Co-President of the Tech & Media Club at London Business School. Prior to the MBA, she completed her undergraduate studies in Econometrics and Political Science at New York University and worked at Mastercard Advisors, offering consulting and advisory services in the payments, fintech and technology sectors. Nandini is an intern for the Wheeler Institute, contributing to the creation of content that amplifies the role of business in improving lives.

The Wheeler Institute is seeking to understand, illuminate and offer solutions to the challenges faced by the developing world, with an aim to identify the role of business in addressing these challenges and a focus on the implications and actions for those in developing countries. In support of our students, we approach this blog section as a reflective platform and a space where individuals can generate debate as long term agents of positive change.

Key Terminology:

  • Blockchain: a digital ledger/distributed database that is shared among the nodes of a computer network (Investopedia)
  • Cryptocurrency: form of currency that exists digitally or virtually, uses cryptography to secure transactions, and doesn’t have a central issuing or regulating authority, instead using a decentralized system to record transactions and issue new units. (Kaspersky)
  • Ethereum: a platform powered by blockchain technology that is best known for its native cryptocurrency and that accrues value through the security conferred by the distributed nature of blockchain technology (Investopedia)
  • NFT (Non-Fungible Token): are cryptographic assets on a blockchain with unique identification codes and metadata that distinguish them from each other. Unlike cryptocurrencies, they cannot be traded or exchanged at equivalency. This differs from fungible tokens like cryptocurrencies, which are identical to each other and, therefore, can serve as a medium for commercial transactions. (Investopedia)

PS: for those interested in learning about the history of gaming and where the industry is headed (especially with the involvement of cryptocurrency), Akshat Goenka from Moonfire Ventures has an excellent article on this topic:












  1. Julien Burch


    It’s true that crypto gaming is in need of maintaining, often times people fall to the volatile asset markets presented by each project. However, game developers are constantly improving not just the game experience, but also the sustainability of the game’s economy. Players are also given the opportunity to choose games based on personal preferences, it is indeed a growing concept.

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