Why does the "click to earn" mode signify progress in the industry?

By Ryan S. Gladwin

Translated by BitpushNews

As of 2024, one of the biggest winners in the cryptocurrency field is Telegram games. Prior to the airdrop this week, "Hamster Kombat" attracted 300 million players, and the token issued by "Notcoin" has a market value of nearly 30 billion US dollars—this click-screen game has produced one of the top 100 tokens globally.

All of this revolves around the "click to earn" mechanism, which is a simple concept but has more and more variations and derivative forms. Has this model really developed after the "play to earn" game craze dominated the last bull market? Or is "click to earn" destined to suffer the same fate of being ridiculed and scorned by the public?

In 2021, the "play to earn" model was very popular, especially games like Axie Infinity, a monster battle game similar to Pokémon, which at one point had nearly 3 million monthly active users. Players need to purchase or borrow three Axie NFTs to start the game—during peak periods, the entry cost could be as high as $600 or more—then they can win real cryptocurrency tokens through competition.

This model was so popular that people in low-income countries began to play this game as a full-time job. At one point, 40% of the game's players were from the Philippines.

Axie is a pioneer in a revolution that promises to benefit players over time, help people escape poverty, and redefine modern work. Many other games have tried to imitate its model. However, Axie's economy has gradually declined, with the prices of all tokenized assets plummeting, effectively hindering the development of the play-to-earn model.

In many ways, click-to-earn games are similar to the play-to-earn craze. Players are required to click on the screen and play simple games in exchange for in-game coins or points, which will eventually be converted into cryptocurrency tokens sent through airdrops.

So, why does the "click to earn" mode signify progress in the industry?

"Click-to-earn games bring a hopeful innovation to the traditional play-to-earn model with their simplicity and user-friendliness," Robbie Ferguson, CEO of the game network Immutable, told Decrypt. "These games significantly lower the barrier to entry, especially for newcomers to cryptocurrency. They are designed to build a more sustainable economic system from the start, which may help mitigate some of the challenges faced by the play-to-earn model."

Most play-to-earn games require players to invest money to purchase the game before they can start earning profits. This means that players must invest real money. In contrast, click-to-earn games do not have such requirements—players only need a smartphone capable of running Telegram, a simple messaging application.

Of course, this lower barrier to entry also means that the depth and complexity of the game are usually limited, resulting in a more superficial and repetitive player experience.

"As an emerging hot spot, click-to-earn games have indeed attracted widespread attention, but often struggle to maintain long-term user engagement," Andrew Saunders, Chief Marketing and Growth Officer at Skale Labs, told Decrypt. "To truly drive innovation in Web3 games, developers must combine the instant gratification brought by click-to-earn with a deeper and more attractive game experience to ensure that players remain interested in the game after the initial novelty wears off."

Indeed, most Telegram games require little to no special skills for players to succeed. For example, in Hamster Kombat, players only need to repeatedly click on the screen and choose the best upgrade options to passively earn tokens—this is the basic gameplay loop adopted by most click-to-earn games.

Some players don't even personally click on the screen, but have found clever ways to automate the game process, such as using a massage gun or using custom software scripts that may not be banned from airdrop activities. Although many play-to-earn games are also seen as having shallow content, games like Axie Infinity are still much richer in gameplay than Hamster Kombat.

"On the other hand, the play-to-earn model involves a complete gaming experience," Rob Wolff, founder of Digital Asset News, passionate about cryptocurrency games, told Decrypt. "This is more interesting because it provides opportunities for challenges, strategy, and skill-building, making the game able to continue to attract players over time."

However, this can also be seen as a drawback. According to data from Exploding Topics, casual games are the most popular type of electronic games in the United States, with 63% of respondents saying they often play these games. There are more players now than ever before, but many of them tend to play simple games. Click-to-earn games happen to cater to this characteristic.

This broad target audience, combined with a lower barrier to entry, may explain why Telegram games seem to be able to attract such a large user base. For example, X Empire claims to have about 45 million players, and Notcoin, as the debut game, has also reached 35 million users. Because almost anyone can join and start playing immediately.

"The main advantage of click-to-earn is its potential to reach a wider audience, especially in the major mobile gaming market," Karel Vuong, co-founder of the crypto gaming platform Treasure, told Decrypt. "By lowering the barrier to entry, it provides an opportunity to introduce previously untapped groups of people into the Web3 ecosystem."

Axie Infinity is a typical example, but not the only one. Another well-known case is the "earn while walking" game Stepn, which became popular in early 2022. It allowed users to earn valuable cryptocurrency tokens in the real world by selling NFT sneakers and walking or running. However, this craze quickly faded, and the value of NFTs and tokens sharply declined, causing significant losses for some investors.

The click-to-earn mode has appeared for a short time and has not yet exposed obvious flaws—although when players can start the game without investing any money, the monotonous gameplay and lower-than-expected airdrop allocation seem to be not a big problem. The click-to-earn mode focuses more on user engagement than on monetary investment.

"The economic model of click-to-earn is completely different from the play-to-earn model, as it is entirely based on advertising," Alena Shmalko, Ecosystem Lead at the TON Foundation, told Decrypt. While play-to-earn games rely on new participants to sustain the operation of their economic system, as explained in the Axie Infinity whitepaper, the click-to-earn model is funded through advertising.

This is a more sustainable payment method—advertising revenue is a way for many companies to cover operating expenses. But the question is, after the initial airdrop activity, do players have a reason to continue participating? Can the tokens maintain their value in the long term?

Shmalko added, "Every app needs to create further ways for token holders to extract value and ensure they are willing to pay for it."

For example, Notcoin has partnered with other game projects and has ambitions to become a platform similar to Netflix for launching new cryptocurrency games. Hamster Kombat is also trying new development paths, including expanding beyond Telegram and launching more games. It is still too early to judge whether these initiatives can retain players in the long term.

"Time will prove how click-to-earn creates a new sustainable economic model," Shmalko told Decrypt, "otherwise, they will face the same fate as play-to-earn games—once the hype ends, the product will have no demand."

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