Play-to-earn (P2E) was one of the most talked-about crypto narratives of the last few years. It promised players income for time spent gaming and attracted millions of users during the pandemic-era crypto boom. However, with the rise in token inflation, speculative user behavior, and unstable economies within the gaming environment, the model lost its popularity among players.
As a replacement, a new model was introduced called Play-to-own (P2O). Instead of chasing short-term token rewards, players now focus on owning digital assets with long-term utility and value. This article provides insights into why players are shifting towards P2O and how it is dominating the Web3 gaming space in 2026.
Key Takeaways
* P2E was plagued by inflationary token economics and speculative players, causing unsustainable economies.
* P2O focuses on ownership, interoperability, and long-term value rather than immediate rewards.
* Developers and investors are supporting ownership models to enhance retention, monetization, and product quality.
Why P2E Failed to Scale
The P2E model was based on players using their non-fungible tokens (NFTs) as a way of entering a game, earning tokens as a reward for participating, and then selling their tokens for money. The model only worked as long as there were new players entering the system, willing to pay money for the tokens that the players wanted to sell.
However, as soon as there was a problem with the price of tokens, which was usually caused by a general downturn in crypto, the player’s incentive stopped. For instance, Axie Infinity saw its daily active users drop from 2.7 million to nearly 959,000 peak users. As of April 2025, there were only 4.8 million daily active wallets across all blockchain games, a 10% decline from the previous month. This crippled the vast majority of all announced Web3 games.
What Makes P2O Different From P2E
P2O does not eliminate the blockchain or NFT component. It reorganises what those tools are for. Instead of rewarding players with tokens that need to be cashed out quickly before values drop, P2O rewards players with ownership of in-game assets that hold meaning inside the game itself.
The shift is best understood through a concrete comparison. In a P2E game, a player defeats a difficult boss and earns 50 tokens worth roughly $3 today, but maybe $0.30 next week. In a P2O game, that same boss drops a rare sword NFT. The sword is genuinely useful in gameplay, is limited in supply, and can be traded on the open market. Its value is anchored to its utility and scarcity, not to the speculative mood of a token market.
This reframing changes player behaviour in important ways. Owners take care of their assets. They stay in the game longer because they have something worth protecting and developing. Secondary markets become healthy trading environments rather than exit ramps.
Advantages of the P2O Model
1. Allows Digital Ownership
Gamers are increasingly interested in owning their in-game assets, especially after investing in virtual assets that cannot be resold or traded. Surveys indicate that many gamers are interested in trading their digital purchases, which indicates a need for ownership-based systems.
In P2O, users not only have full control over their in-game assets as NFTs or blockchain tokens but also can sell, trade, or use them across different platforms.
2. Offers Interoperability and Cross-game Economies
P2O focuses more on having an interoperable environment where assets can be traded across different games or metaverse platforms. This increases the utility of owned assets and their long-term value.
Developers consider interoperability as a popular tool to help create decentralized economies and user-generated content.
3. Better Alignment With Existing Gaming Models
In P2O, gamers purchase assets, and game developers sell content. The secondary market also develops organically without relying on token rewards. Successful implementations of P2O have demonstrated robust user acquisition and sustainable revenue streams.
Why P2O Transition is Gaining Momentum
P2O has introduced some specific changes that make it the model of choice for players in 2026:
What is the Implication?
For traditional gaming companies, the P2O model provides a more credible entry point into Web3. It aligns closely with how major studios already think about in-game economies, cosmetic markets, and digital item scarcity, without requiring them to build a functioning cryptocurrency around their title.
Investors are shifting capital toward sustainable gaming models. Token launches and speculative GameFi projects have lost appeal, while product-driven teams with real users attract funding.
Market forecasts suggest Web3 gaming will grow steadily through the late 2020s, with ownership-based models forming a key pillar of this expansion.
Bottom Line
The quick answer is that P2O represents a shift in game development, player retention, and value storage. P2E was an ambitious experiment that revealed both the potential and pitfalls of Web3 gaming. The reliance on token rewards was not scalable, leading to a search for a better way.
However, P2O has a more compelling value proposition: true digital ownership, interoperable assets, and a sustainable game economy. By shifting focus from yield to utility and retention, it is quickly becoming the new GameFi narrative.
In 2026, those who grasp this difference are building the games that will shape the industry for the next decade of blockchain gaming.
