Getting all the Axies seems complicated, considering that the cheapest costs about $ 200 (0.1 ETH) and they have been sold for more than $ 500,000 (300 ETH). These virtual creatures, in the style of Pokémon, are the protagonists of ‘Axie Infinity’, the latest phenomenon in the crypto world and a game that already gathers more than 350,000 daily active users.
‘Axie Infinity’ combines an adventure mode with daily missions, clashes with other players and collecting coins with the underlying infrastructure of the NFTs and the blockchain network. A game with a fun and familiar appearance that serves as a prelude to a much more serious and risky proposal, where players can get money in exchange for gambling. “Play to earn” they call it. A style of play that wants to go beyond “Free to play” or “pay to win”.
How ‘Axie Infinity’ works and how much does it cost to enter
Each of these Axies is tied to an NFT. Users buy, breed and trade them. In order to access the game you have to buy three of these creaturesThe cheapest being 0.1 ETH. This equates to almost $ 200, based on the current value of Ethereum.
Within the game you can get other Axies, as well as perform missions to obtain ERC20 tokens. Nails virtual currencies with their own value. They are the AXS (‘Axie Infinity Shards’) and SLP (‘Smooth Love Potion’). And to get an idea of the magnitude of the game, according to Coinbase data, they have a market capitalization of $ 753.9 million and $ 105.4 million, respectively.
The origin of the game dates back to 2017, where Sky Mavis and Trung Thanh Nguyen saw the success of CryptoKitties and they decided to bet on their own game, in the Pokémon style but with the NFTs that were gaining so much traction in the CryptoKitties market.
Initially the game experienced its first moments of success with the rise of cryptocurrencies and Ethereum in 2018, but it was not until 2021 when it has exploded, driven mainly by the community of the Philippines, who have seen in ‘Axie Infinity’ an alternative method to generate money.
With its “Play to earn” model, ‘Axie Infinity’ rewards financially those who play the most, but requires a high barrier to entry: a down payment of currently about $ 200 per creature.
“The complaint is all the wallet paraphernalia you have to do,” explains one of the players. It refers to the fact that to enter the game you have to acquire ETH, register in MetaMask, transfer the cryptocurrencies and download Ronin, the ‘Axie Infinity’ own wallet created to facilitate transactions. “Before for everything you had to pay commissions because it was in the MetaMask network, now it has improved infinitely”, says the user. This initial step is a serious barrier to entry, although once inside we have a more traditional game, with sketchy graphics and a card-based real-time battle system.
The high cost of entry has caused some users to decide rent to new players the Axies that “they have left”, with a lower cost than it would have to buy one. An additional strategy that allows players to generate more income and makes the initial payment cheaper for new users, but also an example of the difficulty of making the game profitable.
‘Axie Infinity’ is a game available for both Windows, Mac, Android and iOS. Although, despite the fact that it is a free download game, the necessary purchase of the Axies has a very significant cost. These Axies are not bought from the creators of the game, but from other players. Herein lies the big difference with other systems. As Packy McCormick of Not Boring explains, 95% of the revenue goes to the players.
Although, despite the promise that when buying an Axie you are buying a part of the game, the truth is that in the past there have been problems such as QuadrigaCX, where users lost their bitcoins or problems in the creation of the NFT itself , which disappear the moment the company’s server crashes.
This promise of getting a bigger piece of the pie is the foundation of the ‘Play to earn’ business model that ‘Axie Infinity’ establishes. How is the game sustained then? Mainly because of the 4.25% commission on purchases and sales of Axies NFTs.
After the boom in users, those responsible for the game created their own wallet to evade the ‘gas fees’ of the Ethereum network.
While in ‘Free to Play’ games you pay to obtain skins or special objects, in this type of game you pay a greater amount to be able to access the game, with the subsequent promise of being able to aspire to recover the investment. “Players are rewarded who spend their time in the game and help grow the ecosystem,” they point from ‘Axie Infinity’. Players can exchange their rewards within the game or decide to convert it into Fiat money, through exchange houses such as Uniswap.
“If the SLP is devalued, it takes longer to recover the investment”, explains a player, who assures us that the usual is around a month to obtain the 200 dollars that an Axie currently costs. As in other NFT ecosystems, users seek to sell their creatures at a cost higher than what they initially paid, which currently enhances the speculative component of the game.
The balance of the return is in the time necessary that the game forces you to use to recover the initial cost of the purchased creatures. A wheel that turns e prompts players who try it out to stay there so as not to fold at a loss. At the moment the game is experiencing great growth, but, as with cryptocurrencies, this trend could change at any time.
A meteoric rise that already generates 84.9 million dollars a month
The numbers on ‘Axie Infinity’ are impressive. In April of this year we were talking about income of $ 670,000, which rose to three million in May and 12.2 in June. July has not ended and, according to data from Token Terminal, ‘Axie Infinity’ already generates 84.9 million dollars per month. A beastly growth of over 200x in just three months.
These are numbers that place this “innocent” game in one of the most important crypto projects in the world. For comparison, Roblox generated about 144 million dollars last April. And we are talking about another authentic phenomenon, with a valuation above 40,000 million dollars. According to company data, they expect to close July with revenues of about 150 million dollars, thanks to its commission of 4.5%. Figures that place ‘Axie Infinity’ at the height of the most important ‘free to play’ titles of today.
If you look at the data from the last months, ‘Axie Infinity’ is still far from what was generated by Ethereum, Bitcoin or Uniswap, but in these last 7 days, ‘Axie Infinity’ has generated almost the same income as Ethereum. Curious considering that the game itself pays some fees to Ethereum.
Revenues from ‘Axie Infinity’ have skyrocketed in the last three months, outpacing established NFT platforms such as OpenSea, Foundation or the NBA’s TopShot.
The comparison can also be made with other markets dedicated to the NFT such as OpenSea, Foundation or some specific ones such as NBA Top Shot or CryptoPunks. With data from the last 30 days, ‘Axie Infinity’ beats them all.
To face the rise in Ethereum’s ‘gas fees’, from ‘Axie Infinity’ they created Ronin, their own blockchain chain. Although, due to the enormous volume of transactions, the game is still the fourth consumer of the Ethereum network.
It’s been an intense week for the Axie nation and we want to provide some clarity and transparency around the server issues and how we are dealing with them.
Thank for you for the patience as we go through this historic time!
Full announcement ? pic.twitter.com/NR69VjkXsQ
— Axie Infinity (@AxieInfinity) July 17, 2021
This week ‘Axie Infinity’ has experienced problems. As explained by those responsible, it is due to exponential growth and servers. A collapse produced as a result of more than 500,000 daily active users, they point out.
Are “Play to Earn” games a legitimate model or a pyramid scam?
The debate on ‘Axie Infinity’ is closely linked to the debate on the role of NFTs itself. Are we facing a bubble? Faced with an excuse to generate huge amounts of money? The doubts about this type of project are very present and it is easy understand these games solely for their speculative value.
‘Axie Infinity’ is currently in alpha and the game is expected to continue to grow, mainly to add more content to the world and to facilitate the management of virtual currencies. That is, improve the “gaming” part and the “crypto” part. Two sides that must be placed together to understand the scope of this type of project.
History has been made! I’ve just sold an @AxieInfinity genesis estate for 888.25 ETH (~$1.5M USD). This is the largest digital land sale ever recorded on the blockchain. Congratulations to the new owner – Flying Falcon ? #NFTs pic.twitter.com/AoGydw9Cpv
— DANNY (@seedphrase) February 8, 2021
The blockchain has allowed to promote a new business model in games. Till the date it was difficult for players to “work” within the universe of certain games, unless organized competitions were held like those of eSports. ‘Axie Infinity’ is the demonstration that it is possible to generate an entire internal economy within the game. Strong enough for players to proactively seek to dedicate some of their daily time to it.
As Coindesk describes, in the Philippines and Vietnam there are already people who have decided to quit their jobs to get money through Axie. It is a dangerous decision and it is not the first time that we have seen news of people who embrace certain projects with the desire to obtain “easy” money. The astronomical numbers of ‘Axie Infinity’ have justified that move, but financial return can change quickly, as we have already observed on several occasions this year.
Under its innocent guise, ‘Axie Infinity’ takes advantage of the blockchain pull to turn speculation with NFTs into a game. Be very careful where to put the money.
‘Axie Infinity’ has achieved with its promise and appearance that thousands of users pay for a game more than 20 times what is usually paid for a next-generation console game. The blockchain allows players to recoup their investment, but it is also demanding a much higher down payment from them. We will see if once the economic component is reduced, the game itself is capable of sustaining the interest of so many users.
NFTs are currently a catalyst to attract economic investment. We have seen it with the NBA cards, with the football cards of Piqué’s company and also with this updated version of the virtual creatures. How different and dangerous for the pockets of so many families it would have been if in the 90s the Pokémon boom had come along with the NFTs.
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