Play-to-Earn was the obvious king of crypto in 2021. Axie Infinity became the fastest-growing video game in history by growing its user base 4,900% in half a year. Gaming NFTs sales hit $5.17 billion by the end of the year. That hype transformed to Move-to-Earn in 2022 and obviously resonated with a lot of people: STEPN is a great example with its token price growing by 34,000% in a month.
Play-to-Earn was declared as a new paradigm that was going to redefine how we work, play, and are entertained. According to the Crypto Twitter it was single-handedly eradicating poverty and inequality before our very eyes as it provided a way for people in developing countries to make a lot more than minimum wage, just by simply playing video games. No longer was crypto locked in a bubble of speculation — it had achieved real-world use status with users "participating in the financial upside of the community”. Instead of having 100% take rates, games would distribute the revenue back to the players which would lead to a "stickier game and more opportunities for expansion".
Probably the most telling metric is the amount of investment poured into the industry. In 2021 crypto gaming projects received $3.6b in venture funding, which represents 13% of all crypto investments for the year. The conviction stayed strong in 2022 with $3.2b - 9% of total investments.
What about the earning part? Let's have a look at the 10 most profitable games from the top 50 by market cap. First place goes to Gods Unchained, with $1.67 in average daily earnings, and last to Million on Mars with $0.67, with the median rate of income being just $1/ day. Meaning that an 8h work day would bring us only a little more than $0.12/hour. Let's compare that to the minimum hourly wage in the following countries. The list includes both developed and developing countries - they were supposed to have a special place in the new paradigm of P2E.
So what's happening right now? Are we in a new paradigm yet? Not really. According to our research, user activity is steadily decreasing despite the fact that more games keep being released.
There's no country where you can't earn several/multiple times the medium P2E income just by working a minimum wage job. And we're not even taking into account social benefits, insurance, and the lack of upfront investments. Work-to-Earn is absolutely crushing Play-to-Earn.
Speaking about investments. The combined market capitalization of the top-50 games went from $16.8b to $6.2b in 5 months. That's a 63% drop vs the 45% drop of the total crypto market cap. The game which dropped the most amongst the top 50 games by market cap is Plant vs Undead - its token lost 99.9% of its value since its ATH. Nothing unique about that, there are many games in the top-50 by market cap that have lost 98%+ of their value since their ATH.
So we have very little play and no earning. It's safe to say at this point that some of the fundamental and thought to be revolutionary concepts of P2E turned out to be blatant ponzies. We have a huge ecosystem of projects that sit on an incredible amount of money with no clear idea of what's next. Things don't look good.
However, our extensive experience in the cryptosphere has taught us that crypto always finds a way. It doesn't pay to be pessimistic in this field. Not for a long time definitely. One of the great things about this industry is its resilience and antifragility - after an initial failure, it's always able to reinvent itself and grow into something revolutionary.
crypto always finds a way
An optimistic view of the current state of the P2E sector sits on the idea that we are in the same position as we were in the mobile games market after the success of Angry Birds. Back then there was a period of time when it became obvious that there was a big opportunity but the working models were still to be discovered.
Now we also have at least two blockbuster projects (Axie Infinity and Stepn), a few other successes, at least at the NFT presale stage, and a few moderately successful projects, if we compare them to an average Web2 game. With a few billion dollars invested in the yet-to-be- released games,we will probably see a lot of different experiments with business models that are going to disrupt the industry, with new unicorns being born as a result.
The P2E industry is now flooded with a not-so-big list of different types of companies:
so we stay optimistic
Game developers that were not successful enough in the Web2 world who are 1 looking to get rich using their mediocre set of tools combined with the P2E economy somehow built into a traditional mobile game.
A few elite teams that want to build a whole economic universe though there are no successful economic models, even in much less complicated projects.
Founders who are very enthusiastic about 2 the P2E model but know nothing about
game development.
And also a few teams that are simply sucking up the money from the market via NFT/token sales.
That’s what we got. Of course, there are also very balanced and experienced teams with successful backgrounds and even founders who have previously sold their gaming studios with good profits. But most of the industry is listed above. Consequently, we will most probably see just a few games made good enough to enjoy both the game part and the economic side. But at this stage of market development, even a few of them will be enough to move the market forward with even more billions invested.
The answer is probably not only in the ability to build fun games with a good economy but in the type of players populating the P2E games and the APYs they need. It is obvious that the Axie Infinity model was based on comparatively big profits for a large number of players that could only be obtained by a Ponzi-style economy, but in successful Web2 games there are a few times more players and most of them will be glad to get at least something out of the game, as they won’t consider playing it as a job like some people in the Philippines did, who played Axie Infinity in scholarships.
The big question is whether the Play2Earn market will become a huge part of the overall gaming industry (like mobile gaming in the last 10 years) or will it eventually deteriorate into a very niche one, like social games on Facebook.
With our six years of experience in crypto (we founded ICORating back in 2016), we also understand that one shouldn’t expect to see the Web2 models copied in crypto. Instead, there are always incredible new models appearing that are based on the principles of decentralization, deep community engagement, and an open economy. We believe the same principles will shape the new gaming industry and we will definitely see tremendous inventions in this space in the coming years.
Future Trends
There are numerous strategies to be tested in the coming years in the crypto gaming space.
First of all, we will see the Free2Play model heavily tested with iOS/Android games that require no crypto to play but give rewards either as some sort of NFT or «virtual» tokens, both of which will be convertible into real crypto on the web app. The average Web2 user in this case will have the necessary motivation to dive into crypto tech, get a wallet, and finally interact with the Web3 part of the game. Sounds complicated but promising. A good example is Upland.
We can’t wait to see how these experiments change the industry. And can’t wait to play these games too, of course!
As the Axie model seems to have collapsed, a new trend has appeared in the past couple of months - the Play AND Earn model, which is based on the idea that a user plays the game to have fun and receives some crypto (not much) for doing something valuable for the community, like selling his advanced loot or coaching others, etc. This is similar to the unofficial markets around the big Web2 games, but officially and with crypto. Probably, one should first build a big and really popular game and then create a crypto economy around it, and not vice versa, but doing so could also be interesting.
Next — the upcoming AAA games that promise a playing experience never-before-seen in both the Web2 and Web3 space. We believe that these projects will also be way harder to launch than existing Web2 and Web3 games. We will be very surprised if there will be a real AAA game available earlier than 2025.
The final one is taking really successful Web2 games and rebuilding them into a Web3 clone, with the same teams doing the rebuild since they 100% know how to make them popular. In our opinion, this is the most promising trend as it is crucial to have a VERY good game to make a sustainable economy around it, as we can see now.
All P2E Games Status
To date, there are 1,528 projects on
the GameFi market, as of August 2022.
have reached a full release and are in Live status
projects are in beta testing
projects are undergoing alpha testing
projects are in development
projects are preparing to hold a presale and raise funds for development
All P2E Games Status
It should be noted that only 1⁄3 of all games in development are live now. The upcoming launches promise to be very diverse and bring a lot of new ideas to the market.
The alpha and beta test games currently tend to be free for everyone in order to attract a new audience that can try the game and decide if they want to play it in the P2E mode, therefore creating a kind of Free2Play experience in the P2E world.
All P2E Games Status
The total average DAU of active P2E games is 689,377 users, as of August 2022.

The top 5 largest games account for 549,600 DAU, which is 79.7% of the total amount.
Top-5 P2E Games
All P2E Games Status
In the spring of 2022, the cumulative DAU for all P2E games reached record values and exceeded 1 million active users per day. By July, the number of players had decreased by 30% to 745,000 active users.

In August, the decline in user activity stopped, but there was no noticeable growth either.
of GameFi Projects
All P2E Games Status
All P2E Games Status
Market Cap of the Top-50 GameFi Projects
As of August 2022, the total market capitalization of P2E games is $10,000,000,000.00. The top 50 projects, including Metaverse projects, have a market cap of circulating supply of $6,260,813,000.00, which is 62% of the total. Excluding Metaverse projects, the market capitalization of the top 50 projects will be 31.5% of the total.
It is easy to understand that the top Metaverse projects (Sandbox and Decentraland) account for nearly 1⁄3 of the total market cap.
All P2E Games Status
Top-5 Projects Market Cap, as of August 2022
It is important to note that we take metaverses into account in this report, as we consider this genre an important part of the GameFi industry. We see metaverses as virtual worlds using blockchain technologies that allow their participants to earn money by participating in various activities, including gaming.
All P2E Games Status
In March 2022, the circulated market capitalization of the top 50 largest P2E projects was estimated to be $16 billion. By May, it had decreased by 60% to $7 billion.

During the summer, the capitalization continued to decline and by the end of August it was $6.2 billion. At the same time, the exchange rate of several significant projects over the past three months has shown signs of growth.
MARKET CAP DYNAMICS of the Top-50 P2E Projects
All P2E Games Status
All P2E Games Status
At the time of writing, August 2022, 380 P2E projects were in development. The combined market capitalization of the top five largest developing projects was $74 million. MagicCraft, with a market capitalization of $22,850,000.00, ranks first in the list of the largest games in development.
of the Top Developing Projects
A notable feature of P2E projects is the variety of blockchains on which they work. Different blockchains differ in transaction costs. The popularity of the blockchain is also essential. The more popular the blockchain is, the more chances a game based on it has to attract a large number of new players, which is one of the foundations of economic success.
The most popular blockchains for creating P2E games, as of August 2022 are Binance, Ethereum and Polygon. There are 644 games running on these networks that are in Live and Beta status.

There are 344 games on the Binance network, 188 games on Ethereum, and 112 games on Polygon.

BSC and Polygon are currently the most popular blockchains for P2E projects due to their low commissions, although we will definitely see new projects running on Ethereum as the commissions have significantly lowered since the Merge and the ETH ecosystem offers a lot of possibilities for much easier onboarding, as well as additional options for the users.
Projects’ Blockchains
The clear leader by market capitalization is the Ethereum network. In second place is the Ronin network, on which the famous Axie Infinity works. In third place is the Binance network. With Solana and Polygon networks rounding out the top five.
Market Cap Blockchains

P2E games include both standard genres, ones that are familiar to any kind of gamer, and unique genres, specific only to blockchain games. Initially, collectible card games were popular. A variation of this genre is Axie Infinity. In 2022, Stepn made a genre revolution, revealing the groundbreaking concept of a Move-To-Earn genre. Another popular genre is the Metaverse, which is leading by market capitalization. Hundreds of new games are currently in development, and perhaps in 2023, we will see a new genre revolution.

(Sources of information: XYZ2E Analytics, Dune. Dappradar, Footprint Analytics, Coinmarketcap)
The most popular genre among the top 50 largest games is RPG. Also, in the top five popular genres are Mining, Maps, Strategy and Automatic Battle.
The Metaverse genre has the largest market capitalization. The card genre is in second place by capitalization, and in third is Move-To-Earn.
Genre Market Cap

Since August 2022, more than half of all P2E projects require players to purchase NFTs or game currency to start playing. At the same time, even in free games, players need to make an initial investment to reach an acceptable level of earnings. Players usually earn either the in-game currency or NFTs for subsequent resale on the secondary market.

The high entry barrier that has prevented the mass distribution of P2E games is gradually decreasing. It is due to the introduction of a mechanism for renting gaming NFTs, and due to the gradual reduction in the cost of NFTs in the secondary market. Payback periods are gradually increasing in parallel with the decrease in the amount of daily earnings.

(Sources of information: XYZ2E Analytics, Dune. Dappradar, Footprint Analytics, Coinmarketcap)
Approximately 41% of all P2E games on the market use the Free-To-Play model. 47% of all games require the purchase of an NFT, and 11% of all games require the purchase of game tokens.
About half of the top-50 P2E games have a free to play mode. However, to start earning, even in free games, an initial investment is usually required. It can be in the form of buying a gaming NFT or game currency. As of September 2022, the average cost of entering the game is $70. The most expensive is the Aavegotchi project with an entry cost of $437. The cheapest entry is usually $1.
Projects Entry Cost
Maximum and minimum Top-50 GameFi projects entry cost, as of September 2022
TOP-50 GAMEFI PROJECTS Entry Cost MTM Dynamics
The payback period of the top-50 games has been growing steadily over the past six months. As of August 2022, the average payback time of funds invested in games is 148 days. The minimum payback period for the top games is 10 days.
Payback Period
Average and minimum Top-50 GameFi projects entry cost, as of September 2022
Shortest Payback Period MTM Dynamics
The high profitability of GameFi projects, which is what attracted most of the users to the P2E industry, has sunk significantly in recent months. The former leaders in earnings - Axie and StepN, have stopped generating income. The same can be said about most of the games. As of the end of August 2022, the average daily earnings in the largest games is $1.
Daily Earnings
Daily Earnings MTM Dynamics
Financing of P2E projects consists of investments, funds raised on the initial tokens and NFT sales, and secondary market commissions. The sales volume of game assets on the secondary market for the most capitalized games totals hundreds of millions of dollars.

(Sources of information: XYZ2E Analytics, Dune. Dappradar, Footprint Analytics, Coinmarketcap)
Many projects have received funding from IDO\IEO. As of August 2022, the fundraising leaders were Sipher and Illuvium, who raised $51 million each. Crypto Unicorns and Decentraland are next with more than $20 million. The famous Axie Infinity ranks only fifth with $11.5 million.
Raised on IDO
As of September 2022, crypto and blockchain projects have raised $36 billion in funding rounds. This is almost 25% more than in the whole of 2021. $9 billion has been invested in the GameFi industry, which is 95% more than last year.
Private sale rounds
As of August 2022, Axie Infinity is the leader in terms of NFT sales in the secondary market. In total, NFTs sold accounted for $3.6 billion. In the Decentraland and Sandbox metaverses, sales totaled $417 million and $360 million, respectively. Also in the top five is the horse racing Zed Run and M2E project Metamon.
Secondary Market NFT Sales
(Sources of information: XYZ2E Analytics, Dune. Dappradar, Footprint Analytics, Coinmarketcap)
Dynamics to ATH
In 2022, we saw the transition of the cryptocurrency market to a bear market. The exchange rate of all major currencies showed a significant decline. At the same time, many representatives of the GameFi industry performed better than the market average. For example, as of September 2022, Solana’s rate decreased by 87% from the maximum values. At the same time, the BinaryX exchange rate decreased by only 31%, Aavegotchi by 66%, and even the STEPN GMT token decreased by 83%.
Solana and top GameFi Projects’
Token Exchange Rate
Exchange Rate Dynamics
Over the past three months, the $SOL token rate of the top crypto project Solana has lost 17% in price. During the same period, the tokens of the popular DeFi Kingdoms ($JEWEL), Splinterlands ($SPS) and BinaryX ($BNX) projects increased in price by 14-28%.
Solana and top GameFi Projects’
Tokens 3mth (07-09.22)

In fact, even on a totally bearish market there are signs of growth in several P2E projects which gives us some optimism about the future of the industry.
Top GameFi Tokens
by Price Growth 3mth (07-09.22)
Games to watch out for
Mirandus →
A Gala Games project in the fantasy RPG genre. The developers plan to fully implement the concept of full ownership of the world by players. This idea implies that all objects in the game, starting with weapons and potions, and ending with entire villages and cities, belong to the players.