Axie Infinity Is A Classic Example Of What’s To Come For NFT Games

Proponents of NFT and blockchain games like Axie Infinity tend to push a specific narrative: you can earn money from activities that you would usually do in your spare time for free. In this universe, every single activity is ripe for monetisation, and quivering with profit-making opportunities. At the heart of Axie Infinity, in particular, is a supposedly inviting proposition: instead of collecting Pokemon—a pastime that Nintendo wouldn’t ever pay you money to do—why not collect these snoot-faced cretins called Axies?

That said, it’s difficult to understate just how popular and widespread Axie Infinity is. It was said to be the game that would propel blockchain games to the mainstream, and had even been a means for Filipino players to make a living in the midst of the pandemic. The game, too, has even become a form of wage labour, with many players unable to afford the exorbitant starting price—or investment—of a trio of Axies, which is now said to set players back at least $1,065 at one time. To help introduce more players into the Axie Infinity system, the game has set up a scholarship of sorts, allowing wealthier players to loan their Axies to others in exchange for a cut of their profits. So far, so Ponzi scheme.

But the thing about Axie Infinity is that for the bulk of its players, it isn’t really a game; it’s actually a job, and the Axie economy hasn’t always been thriving. For this scheme to work—and for the long-term sustainability of the game—there must always be an influx of new players and constant activity online. The value of new Axies and the game’s economy is contingent on having a constant stream of fresh money being pumped into it.

Then there’s the fact that more new Axies are continuously being created. This will eventually result in an issue of oversupply, which will push the price of the Axies so far down to a point where the game would become unsustainable for the developer, Sky Mavis. At the same time, its in-game currency SLP, which can be traded on cryptocurrency markets, is suffering from inflation. According to this report, the supply of SLP is steadily increasing, which is gradually nudging its market price down. The price of SLP residing at its lowest at $0.05 to $0.10 since September 2021 (as of this writing, the cost of SLP is now at $0.01). All these are taking place in the face of a dwindling amount of daily active users. Towards the end of 2021, the game has even seen the daily earnings of a typical player falling below the minimum wage in the Philippines.

There’s a lot more at stake for Sky Mavis, which will take a while to fully delve into; for instance, there’s a substantial number of players who will simply cash out their SLPs, rather than use them to purchase new Axies—a move that’s fundamentally bad for the health of the game. To curb inflation, Sky Mavis has decided to make SLPs more difficult to earn for players, which would mean that players from low income regions will eventually earn even lesser from their grinding. At the same time, the studio also wants to encourage more players to buy Axies at a steady pace (not too many nor little), because it’s crucial to the game’s sustainability. But how can players, who are earning less SLPs, now justify purchasing Axies? How can the studio introduce a new batch of players into the game?

Enter Axie Infinity: Origin—the only logical conclusion to this entire affair. Axie Origin, in short, is a “free-to-play” version of Axie Infinity, which means that players can now play the game without the upfront investment of buying Axies first. One thing to note is that unlike Axie Infinity, the Axies in Axie Origins are not NFTs, which means they can’t be traded and sold, but the studio is now banking on the playability of the game itself to introduce more players into the ecosystem, rather than the possibility of players being able to earn from this endeavour. With the game now in Early Access, Sky Mavis has plans to launch a version of Origin that will incorporate the crypto-bits of Infinity after this period has concluded.

Some players, however, are growing increasingly jaded with the premise of Axie Infinity. “To anyone thinking this is a good idea to make money it no longer is. My mom's friend invested a lot of money but got peanuts in return as the Ponzi scheme economy was in its down curve,” said one Redditor. “i spent 50k in philippine cash to buy a team and a few days later its worth dropped down to like 7k…. i accepted defeat and stopped playing cuz i lost motivation”, wrote another player. Then there’s the recent Axie Infinity hack, which saw $650 million lost, due to a loophole on its blockchain being exploited by hackers. Furthermore, this was a security breach the studio only acknowledged six days later. At the same time, players have consistently reported that their wallets have been hacked, with their Axies stolen and disappearing from their accounts.

That said, other players are still optimistically trudging on. At this rate, it feels almost like blind faith: believing that the dazzling world of NFT games, believing that Axie Infinity is simply an untested economic structure, and believing that the prices of SLP will eventually increase, particularly with the introduction of Axie Origin. Only time will tell if this free-to-play model will eventually invite new players to the game, with the implied promise of earning a tidy amount of profit afterwards—or whether it’ll only send the game spiralling towards its early demise.

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