Why do P2E games fail?

Play-to-earn (P2E) crypto games were presented as the absolute revolution in the gaming industry. The idea was simple and appealing: players earn cryptocurrencies or valuable NFTs by simply playing the game. This sounded like a dream scenario where gaming was no longer just entertainment, but could be a serious source of income.

Yet in April 2026 it turns out that the practice is more stubborn. A large part of the first generation of P2E games has not stood the test of time. Many projects lost their value extremely fast, users dropped out en masse and the internal economies collapsed. In this article you read what P2E games exactly are, how the underlying technology works and what the fundamental reasons are why so many of these projects ultimately fail.

In short

• P2E games reward players with tokens or NFTs for their achievements in the game.

• Many early models turned out to contain "ponzinomics", where profit depended on new inflow.

• Hyperinflation of in-game tokens is one of the main causes of failure.

• The so-called "death spiral" caused many coins to drop by more than 95% in value.

• In 2026 the market definitively shifts from Play-to-Earn to Play-and-Earn, where playing pleasure comes first again.

What are P2E games?

Play-to-earn games are blockchain games in which players are rewarded with cryptocurrencies or Non-Fungible Tokens (NFTs). Unlike traditional games, where all collected items remain the property of the game developer, blockchain gives the player real digital ownership.

From traditional gaming to GameFi

In traditional games, players spend time and money without this directly yielding financial returns; the value remains "trapped" in the game. In P2E games, also called GameFi (a contraction of gaming and finance), it revolves around value creation that is tradable outside the game. This means that players:

• Have full control over their in-game items (as NFTs).

• Can earn tokens that are tradable for euros on exchanges such as Coinmerce.

• Can sell their digital holdings to other players on an open market.

How does the earning model work in theory?

In the ideal theory, a P2E game is a closed, circular economy based on supply and demand. Players earn tokens by completing tasks. New players then in turn need these tokens to buy characters or become stronger. This creates a constant demand that keeps the price of the token stable or lets it rise. In theory, this system grows organically as long as the community grows.

Why do most P2E games fail?

Although the concept sounds revolutionary, most projects struggle with deep structural problems that have become painfully visible in 2026.

Reason 1: The zero-sum problem

In many early P2E games, the value came exclusively from new players who bought tokens to be able to start. This means that the profit of the 'old' players was paid directly by the deposit of 'new' players. As soon as the growth of the number of new players decreases, there is no more fresh capital to cover the payouts, causing the system to implode.

Reason 2: Unlimited token supply and inflation

To keep motivating players, new tokens must continuously be issued. If more tokens are printed than are "burned" by the game (for example through upgrades), hyperinflation arises. This lowers the purchasing power of the players and makes their earned crypto worth less per day.

Reason 3: The death spiral

When the token price starts to fall, a vicious circle often arises:

• Players earn less expressed in euros.

• Out of fear of further declines, they sell their earned tokens immediately.

• This increases the selling pressure, causing the price to fall even harder.

• This process repeats itself until the token is almost worthless.

Reason 4: Earners vs. Players

The biggest problem is often the motivation of the users. Many "players" in P2E are actually investors who do not enjoy the game, but only come for the money. As soon as the return (the ROI) drops, they immediately leave for the next project, which accelerates the decline. A game without real fans cannot survive in the long term.

The fall of Axie Infinity: a real-world example

Axie Infinity was the figurehead of the P2E sector and shows exactly where it went wrong. During the pandemic, people in countries such as the Philippines earned a full monthly salary with the game. However, when the inflow of new players stagnated, the economy could no longer handle the enormous amount of printed "Smooth Love Potion" (SLP) tokens. An enormous hack of 620 million dollars on the Ronin network in 2022 was the death blow for trust, after which the prices of AXS and SLP never fully recovered.

93% of blockchain games fail within a year

The statistics in 2026 are relentless: the vast majority of blockchain games do not survive the first year. This is often because developers build a financial product with a "game layer" on top, instead of a fun game with an economy in it. Copying the economy of Axie Infinity — without removing the mistakes — has led to a graveyard of failed projects such as early versions of STEPN and Pegaxy.

Is P2E dead?

Certainly not, but the model has matured in 2026. The sector has shifted to Play-and-Earn. Here the gameplay is central. Earning crypto is a nice side effect, but not the main motivation. Successful projects in 2026 focus on:

• High entertainment value: The game must also be fun without the financial reward.

• Sustainable tokenomics: Tokens have real use in the game and are consumed faster than they are created.

• Low entry costs: The threshold for new players is low or even free (Free-to-Play).

What does this mean for you as an investor?

If you are considering investing in gaming tokens in 2026, it is essential to look beyond the promised returns. Analyse the tokenomics: is there a limit to the number of tokens? Is the game actually playable and fun? A project that can only survive through constant growth of new players is a risky gamble.

Getting started with crypto at Coinmerce?

Do you want to invest in the future of gaming or other promising crypto sectors with a better understanding of the market? At Coinmerce you easily buy and sell the most important gaming tokens and cryptocurrencies within a safe and regulated environment. We offer you the tools and the knowledge to recognise trends and to participate in the crypto market in a responsible way. Create an account at Coinmerce today and discover which projects do have a sustainable foundation in 2026.