China Cautions Citizens Over Blockchain-based Play-to-Earn Games
Chinese citizens have been warned to be wary of blockchain-based play-to-earn games, in what many assume to be a part of the onslaught on anything cryptocurrency within the borders of the country. This warning was communicated via the state-owned television channel, China Central Television (CCTV).
In two separate reports, the state-owned television channel warned citizens against participating in games like Farmers World, and other similar games that encourage people to play to win cryptocurrencies. The report depicted such games as scams, classifying them under the same category as those prohibited by the Chinese government.
To a lot of people, this does not come as a surprise, considering China’s current hardline resistance towards anything related to cryptocurrencies, including mining. Some of the reasons claimed by the government for taking a hard stand on cryptocurrencies include the protection of the country’s population from financial fraud and eliminating any activity that threatens the financial stability of the nation.
Two parties were fingered in CCTV’s report, both of whom were identified as intermediaries in the northwestern province of Shaanxi, and the southeastern province of Fujian. Both intermediaries claim to help people in China to connect to blockchain-based platforms where they can play games and earn cryptocurrencies. Both intermediaries are said to have advertised how they can help users connect to and play Farmers World, with the potential of earning up to 10,000 yuan, equivalent to USD 1,570.
Blockchain-based games with play-to-earn capabilities are a new trend in the blockchain industry with surging popularity. Several existing game developers have been noticed to adopt and implement play-to-earn capabilities on their platforms, while many new games have also emerged. As a result, the valuation of these game developers has skyrocketed into billions of dollars in the span of just a few months.
This explosion in valuation and the amount of funds flowing into the industry has attracted a lot of scrutinies, and rightly so. According to the report by CCTV, some of the acclaimed play-to-earn games are simply low-budget webpage games masquerading as sophisticated platforms just to rip off unsuspecting victims. Some of them operate like Ponzi schemes, where older players are rewarded from the fees paid by new players to keep the system running.
One of the companies visited by CCTV reporters is called Renren Liang Metaverse Research Center in Fujian. A director of the company told CCTV reporters that a Farmers World player could earn a return of up to 100% within 22 to 40 days, after buying an in-game item that could cost up to tens of thousands of dollars. Also, the company charges a service fee of 6,000 yuan and would be entitled to 20% of every player’s earnings.
In the case of Farmers World, it is a simulation game that allows players to pick tools, exploit resources and buy land to build large farms within the game’s ecosystem. The essence of the game as acclaimed arrives from trading items within the virtual farming ecosystem.
Another reporter in Shaanxi visited the company known as Juxin Software Technology, where a representative of the company boasted of up to 100% returns for players of Farmers World. Like Renren Liang Metaverse Research Center, Juxin Software Technology also earns 20% of every player’s earnings, but there was no mention of a service fee.
Play-to-earn games are currently on a trend across the online gaming industry. Major gaming platforms have developed robust games that offer genuine services and proven value in the industry. However, like other trends before it, many illegitimate platforms are using this opportunity to exploit unsuspecting victims, and this is what the Chinese government aims to avoid, especially when it has to do with cryptocurrencies.