Axie Infinity continues to crumble, with it the dream of P2E plus Esports
Few months ago, we had the perfect crypto duel game for esports paired with a great two-fold play to earn model. Turns out, neither was perfect, and we have a long way ahead for a true Crypto/NFT plus esports game.
Axie Infinity, an NFT-based video game by Vietnamese studio, Sky Mavis has exposed a big flaw with the play-to-earn concept. Coupled with the global economic slowdown which has caused the prices of the cryptocurrency market to go into free fall, not all is well for the P2E title, Axie Infinity.
For plenty of people in developing countries who got hooked to the concept, it may spell disaster on two fronts.
What is Axie Infinity, and how it works?
While can go directly to our Axie Infinity review for the full scoop. Let’s go through the bare essentials here.
To begin playing Axie Infinity, you need to get at least three Axies, which are the characters used to play the game. Axies are inspired by the animal, Axolotl, and can be referred to as a player’s digital pets. The game objective in every Axie Infinity match is to eliminate all three of your opponent’s Axies. This requires strategy and utilizing the digital pets you have in your arsenal effectively.
Matches usually last under five minutes.
So.. how do you earn money from Axie Infinity?
On getting a victory, you earn Smooth Love Potions (SLP) and in higher-level tournaments, you can get Axie Infinity Shards (AXP). These digital tokens can be traded for cryptocurrency which in turn can be converted into fiat currency.
While that’s one way of making money, the other way entails players breeding other Axies and selling them to earn. To breed an Axie, you can use two of the digital pets you have and pay an amount in either SLP or AXL. After a short period, you will get a new Axie with the traits of both Axies used for the breeding. We created an entire guide on Axie Breeding to better understand the concept.
New players can purchase the Axies bred by existing users to start enjoying the game. If more people are playing, the value of these Axies, SLPs, and AXPs will go up.
This sounds awesome, so what is the problem?
The fundamental problem with Axie Infinity is that almost all of its user base play the game for the sole reason of earning money. While the game as a whole can be called decent, it’s not particularly something that would keep players hooked. The financial incentive is what keeps its player base intact.
Additionally, SLP has an uncapped token supply so a reduction of players would cause a domino effect causing its value to decrease even more – similar to inflation.
This is why when Axie Infinity’s in-game currency fell over 90 percent last February from its all-time high in July 2021, a lot of its players left the game. Without the financial incentive, it makes no sense to play the game. A Bloomberg report stated that the game’s active user base has fallen by 40 percent in the past few months.
The value for a single SLP stands at 0.003 from its all-time high of 0.364 last year. The value of AXS, on the other hand, is at $14.08, down from $160.36 in July 2021.
The biggest cryptocurrency hack ever
While things were already looking bleak for Axie Infinity, another big issue with P2E titles was exposed last March. A group of hackers made away with $615 million from the Ronin Network in USDC and Ethereum in the largest decentralized finance hack in history.
With Axie Infinity using the Ronin Network, its player base was severely affected. While Sky Mavis later raised money and used some from its balance sheet to reimburse users, the hack still highlighted an issue with play-to-earn titles.
The reduction of active players means a halt for Axie Infinity Esports
Axie Infinity is still a highly competitive title and unsurprisingly, esports tournaments for the game have also been organized. An example is the Axie Infinity: Battle of the Guilds by ZenSports which had a prize pool of 5,000 USDT and five million SPORTS tokens. Another tournament is the GalAxie Cup 2022 by Southeast Asian esports marketing agency The Gaming Company.
These events were aimed at developing a playerbase using Axie Infinity as en esport on top of its Play2Earn mechanics. The marriage between the two had the potential to engage both fans of crypto and esports into a single market. Yet, with the game’s player base falling along with the value of SLP and AXS, the future for Axie Infinity esports may not look the brightest.