LARP stands for Live Action Role Play. If you're unfamiliar, it's where people dress up in costumes and act out roles like a live action game of Dungeons and Dragons. That might sound dorky to you, but the motivation for LARPing is just like any other game. RPG video games can be really fun, but the choices available to the player are limited to what the game developers build.
D&D and LARP offer much more freedom because it's in the real world and is only limited by your imagination.
If you want to wear the Legendary Boots of Butt Kicking, as long as the other people you play with are okay with it, you can do it.
Blockchain offers a similar future for video games. If you can look past the current environment of rug pulls, high prices, and boring games with the promise of X% APY, blockchain is about giving control to the players.
For a truly decentralized game, the original game developer will do the initial world building, development, and community building. Once the game is established, players would be able to make their own in-game items, spinoff games, new game modes, modifications, etc. Truly decentralized games aren't owned by the publisher. They're open source and community supported. The publisher is just a vocal member of the community.
If you design the Boots of Butt Kicking and want to use them in the game, you just need to get the people you play with to agree to it.
This is similar to what you can do in games like Roblox or Minecraft, but the real difference is portability. Your Minecraft server mod is all you need for you and your friends, but new game items on blockchain can be universally adopted by the community without needing the approval of the publisher. Then you can wear your shiny boots into any game or even sell them for a profit.
P.S. This level of freedom isn't present in any blockchain-powered games today. We need to focus more on the "play" side of play-to-earn. The "earn" should just be a side effect, not the entire focus.