Author: Tobin Kuo, Founder and CEO of Seraph
Play-to-Earn (P2E) once had its glory days—"once" being the key word—but that is precisely the problem. Its time has passed. The excitement came from the earnings, not the game itself, nor the outcomes; it resembled a user-interface-driven shift work rather than a game.
Fairly speaking, these experiments were not without value. They proved that wallets can be controllers, assets can be portable, and communities can collectively own the worlds they love. However, it should not—and cannot—be denied that subsidies distorted every design choice into a vampiric mechanism. Everything was about extraction: recruiting, inflating, cashing out, and repeating.
As the audience dwindles with the faucet drip rate, the reasons to continue playing decrease. Therefore, let us now allow P2E to die, without gentle farewells or eulogies. Slowing down should not be met with fear or disgust; it is merely a natural process of exploration. Now, it should be seen as a filter—a filter that forces teams to build games that people would want to play even if their native tokens went to zero.
Game Finance (GameFi) needs to clear away traditional thinking and mechanisms, learning from the past and taking three simple steps: expand game elements, reduce earning elements, and give this genre a chance to thrive.
P2E made GameFi chase token earnings rather than the true purpose of games: fun. The end result is an economy collapsing under design choices that extract fun at every turn. This is a painful reality, where the returns of incentives outweigh what gameplay can offer.
As retention rates collapse, new funding slows, and token spirals down, projects fail under pressure. The numbers do not lie. In the second quarter of this year, blockchain game funding fell by 93% year-on-year, while the number of daily active wallets decreased by double digits.
Over 300 Web3 games have ceased to be active, exposing how shallow engagement is when rewards no longer cover grinding. This is a painful and bitter pill to swallow, but it brings clarity.
Games that have nothing to offer beyond rewards are dead or dying, and now builders can only start anew from the ruins of P2E. It is time to launch systems that can truly entertain people.
Regulation further opens the door to amplify reality checks: this is a healthy step for the GameFi landscape. When clear boundaries are drawn around the plague of money-first, fun-second game loops, P2E games, simply operating as extraction machines, are treated as gambling.
Consider India's legislation banning money-based online gaming, scrutinizing "money-first" mechanisms that cannot escape when they blur into consumer harm or gambling. This does not mean the end of on-chain gaming; it merely forces games to be created for their purpose (rather than becoming drained gambling engines).
Teams building P2E games now must address the T-Rex in the room: no more building to extract, no more hype. No more extracting from the fun of the game in exchange for inflationary tokens and false "games." The era of real games has now arrived. Start building.
The corrections have been outlined in the second quarter data. Funding is drying up, and retention rate tricks no longer fool anyone. Games built on spreadsheets and issuance timelines were never constructed with true long-term considerations.
The way forward is expression, not extraction. It is about creating worlds where seasonal resets recycle value in fresh ways, where items are truly earned through effort, skill, and perseverance, not bought through shortcuts.
Healthy systems respect scarcity as a design principle—moments, achievements, and artifacts are important precisely because they cannot be infinitely replicated. The idea that players primarily want another source of income must be discarded. Games are not financial tools first; they are spaces for creativity, competition, and community.
It is time to let Play-to-Earn fall without regret and view it as a detour rather than destiny. The true driving force of the industry will come from a return to the values that have always supported great games: joy, mastery, and meaningful play.
The determination to build the next generation of great games will not come from token mechanisms or speculative cycles, but from respecting the player-first spirit that has always propelled this medium forward.
Author: Tobin Kuo, Founder and CEO of Seraph.
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Original: Opinion: The P2E Gaming Apocalypse is an Opportunity for Industry Rebirth
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