Play-to-earn gaming collapsed. Now builders are attempting one thing totally different

The mannequin that promised gamers a brand new digital financial system left most holding nugatory tokens. A Latvian recreation studio thinks it has discovered a greater approach.

The play-to-earn increase ended badly. Games that promised actual earnings by means of NFTs and in-game tokens noticed these belongings lose almost all their worth. Dozens of tasks shut down or stalled.

By the tip of 2025, funding within the sector had fallen 70%, and greater than $2 billion was misplaced to hacks, scams, and undertaking failures in a single yr.

Why play-to-earn failed

The mannequin was structurally flawed from the beginning. P2E video games relied on consistently issuing new tokens, flooding the market and driving down the worth of in-game belongings over time.

Most tasks solely survived so long as they might herald new gamers keen to purchase in. When demand dried up, the tokens collapsed and the video games adopted.

“Play-to-earn was marketed as a way for everyday gamers to profit,” says the CEO of Beetroot Lab, a Riga-based cell recreation studio valued at $100 million after a current fundraising spherical.

“What people don’t always realise is that these models were never really about gaming. They were about speculation. Once the hype died down, most projects collapsed.”

The possession mannequin

A rising variety of builders at the moment are experimenting with what they name “play-to-own,” or P2O. The thought is easy: as an alternative of incomes tokens that may be cashed out, gamers personal elements of the sport itself.

Assets might be saved, traded, or bought, with their worth tied to the participant group fairly than a token system designed to inflate and collapse.

Beetroot Lab’s flagship recreation, Zeeverse, is without doubt one of the clearest examples of this strategy. It is a free-to-play cell recreation set in an indigenous-inspired open world, mixing creature assortment and exploration.

Its land sale system lets gamers personal strategic sections of the in-game financial system. NFT land gross sales have reached $2 million so far.

“When players know their assets belong to them, it changes everything about how they play,” says Edgars Vecozoliņš, founding father of Zeeverse and Beetroot Lab.

The recreation has attracted backing from Mechanism Capital and Cherubic Ventures, an early investor in Coinbase and Slack.

Kevin Lin, co-founder of Twitch, can be amongst its particular person supporters.

Removing strain ways

Beetroot Lab says the shift goes past economics.

Most free-to-play video games use psychological strain to maintain gamers logging in, spending cash, and chasing rewards they might by no means attain.

Zeeverse has eliminated what its workforce calls darkish patterns: pressured day by day logins, synthetic progress obstacles, and fear-of-missing-out mechanics.

“People play because they enjoy it,” says Andrejs Volkovs, Head of Product at Beetroot Lab.

“If someone takes a break, they do not lose their progress or money.”

Growing market

The broader Web3 gaming sector is watching intently.

More than 50 million crypto wallets now work together with Web3 video games, a document excessive.

Market analysts predict the sector might be value $124.7 billion by 2032, supplied it strikes towards community-driven fashions.

In 2024, 65% of Web3 gaming funding went to groups with confirmed gaming expertise fairly than token hypothesis.

Beetroot Lab is now making ready for a Series A.