How an NFT-based online game from SouthEast Asia provides financial relief to players during a global pandemic
Have you heard about Axie Infinity & play-to-earn gaming? This fast-growing part of the gaming market emerged during the Pandemic as a worldwide phenomenon.
It’s the first NFT platform to exceed $1B in transactions. Merchants in the Philippines now accept Axie’s in-game currency to pay for food & sneakers. And a business that “rents out” in-game Axie NFTs raised $22 million in venture funding — including $6 million from Andreesen Horowitz.
What is going on here? Is Axie Infinity a gaming fad? A crypto pyramid scheme? Or… a new digital nation?
Let’s find out.
Introduction to the Axie Infinity economy
Many of my friends in the gaming world have asked me: “Why should I pay attention to Axie Infinity? Why should I care?”
SIMPLE: this game turns the free-to-play economic model on its head.
Most F2P economies have big marketing budgets and talented teams pumping out in-game assets. Axie’s creator — Sky Mavis — spends no money on marketing, and gives their player base 95% of the profits.
In this Pokemon-meets-CryptoKitties game, the players own and create Axies — which are blockchain-based revenue-producing assets — through battling, breeding and trading.
Sky Mavis — the game developers — makes money by taking a cut every time an Axie changes hands — and collecting a fee when players breed new Axies. Players have created more than 2 million Axies, and the game has generated more than $1 billion in transactions, the first NFT platform to do so.
Here are 7 must-know facts about Axie Infinity (Fact 7 is truly astonishing).
To learn more, watch the full video.
Fact 1: Axie was created by Vietnamese game developers & blew up in Southeast Asia.
Unlike most hit games, Axie Infinity emerged from a small crew of developers in Vietnam, and took off in the Philippines and Indonesia.
Fact 2: Axie’s popularity spike was driven by pandemic job loss.
Axie Infinity has been around for years, but usage spiked in 2020 during the pandemic. It turns out that the Philippines was home to the perfect storm of unemployed tech-savvy people who need the income that Axie can provide.
Fact 3: 95% of Axie’s revenue goes to the players
Axie’s economy turns the traditional free-to-play model on its head by giving most of the revenue back to the players.
Fact 4: Many new players are being onboarded into crypto
Axie is providing community-supported crypto education to unbanked rural Phillipinos. Many people who don’t have a regular bank account — now have a crypto wallet and know how to cash out.
Fact 5: Axie enables an emergent profit-sharing model called scholarships
Scholarships provide loans to players who don’t have enough money to buy their own Axies. This wasn’t designed into the game — but emerged because of a quirk in their login system. Now, this meta-game system is responsible for a large percentage of Axie’s growth.
Fact 6: It’s not a pyramid scheme — but it’s shaped like one
Unlike a pyramid scheme, Axie delivers real value to its players. It does look pyramid-like from the outside — but the dynamics are more like the growth loop that’s favored by any fast-growing startup.
Fact 7: Axie has 90% 30-day retention — which is insanely high
Axie players get hooked both by the strategic depth & fun of the game, AND the desire to make money. Which results in an eye-popping 90% retention rate at 30 days — unheard of in the gaming industry.
Summary: Axie Infinity & play-to-earn gaming
In summary, Axie Infinity is a play-to-earn game with an internal economy that’s generating meaningful income and business opportunities for thousands of players in emerging economies.
As Gabby Dizon says:
The play2earn model is not magic pixie dust; you still have to build an appealing, differentiated game, and then get enough momentum going to spin the economy to life and keep it growing.
We’re witnessing a seismic shift from extractive to productive player economies. For game designers coming from free-to-play or MMO background, this is an AMAZING area to explore.
What will we do with this golden opportunity? Let me know your thoughts in the comments below.