19 ruined employment and prompted many people to remain at home. Its supporters, funders, and developers, like Sky Mavis from Vietnam, call it a “revolutionary move” toward the internet’s future. Detractors warn that the game is a “house of cards,” with some comparing it to a hype-driven fraud operation.
“At first, I was skeptical because I felt it was a Ponzi scheme,” said Lumabi, 26, who started playing in June after losing his job at an advertising business and failing at online retailing. According to Sky Mavis, the Philippines accounts for over 35% of Axie Infinity traffic and the majority of its 2.5 million daily active players. Its popularity is fueled by high English proficiency, a strong gaming culture, and extensive smartphone use.
Players in Axie Infinity fight with colorful blob-like Axies and are awarded with “Smooth Love Potion” (SLPs), which may be traded for cryptocurrency or cash, or invested back into the game’s virtual planet Lunacia. Lumabi earns 8,000 to 10,000 pesos (approximately 5,100 to 6400 baht) every month playing for two hours a day in the modest home he lives with his parents and four sisters,
about half of what he earns at his present job as a content moderator working nine-hour night shifts.
His revenues from Axie Infinity have been used to pay for his sister’s university tuition, food, and bills — things that his father’s faltering electrical repair company cannot meet. According to Leah Callon-Butler, a blockchain consultant based in the Philippines, the epidemic provided the ideal setting for this game to draw participants from all walks of life.
“They could stay at home, safe from the infection, and make money by playing a nice game.” However, there is a catch. Players must initially acquire at least three Axies in order to play the game.
An Axie is a non-fungible token (NFT) having a specific set of skills and features. They, like NFT artwork, are kept on the blockchain, which is a decentralized digital record that cannot be altered. Other players may purchase, sell, or rent axes. They may also be bred to produce new Axies with higher value.
A beginner squad of Axies might cost hundreds of dollars during the pinnacle of the game’s expansion last year, well beyond the grasp of prospective players in impoverished nations. On February 9, when AFP checked the game’s marketplace, the cheapest Axies were $37 apiece, bringing the total cost of a basic squad to $111.
Players who spend more money, on the other hand, gain better Axies, giving them a higher chance of winning fights and earning SLPs and, in certain cases, the game’s other crypto coin AXS. Those with the financial means to put up more profitable Axie teams have formed guilds and “scholarships,” which are profit-sharing organizations in which participants are charged a portion of their revenue.
According to reports, the owners’ cut may be as high as 30%. “We supply the assets that the players need to produce money for themselves,” said Luis Buenaventura, founder of Yield Guild Games in the Philippines, one of the numerous firms giving scholarships. “We ask for 10% of their profits in return for that.” YGG alone has 8,000 scholars and a waiting list of over 60,000 individuals who want to be a part of their program, which provides instruction and coaching to a small number of players at a time. Many of Buenaventura’s players were in their early twenties and came from families earning less than $400 per month, according to him.
He called their monthly Axie wins, which average approximately $200, “life-changing.” In 2021, as the number of daily active players increased, the price of Axies and SLPs increased as well, creating concerns about the game’s long-term viability.
Sky Mavis makes money from the game mostly from breeding and marketplace fees, while Axie Infinity has made almost $1.2 billion. It has also attracted wealthy sponsors, notably Mark Cuban, a billionaire from the United States. However, some gaming industry observers believe the company’s economic model is unsustainable, citing the necessity for new players to keep the cash flowing.
Most play-to-earn games, according to Jonathan Teplitsky of blockchain startup Horizen Labs, are a “house of cards” fueled by “hype and price speculation.”
“While the Axie corporation is loaded with cash and prepared to feed a large marketing engine, this whole system works wonderfully,” he added. “If Axie wants to survive the next market meltdown, they’ll have to include some real-world usefulness into their game that isn’t affected by market conditions.” Axie Infinity, which is partially owned by players, is “not a zero sum game,” according to Sky Mavis co-founder and CEO Trung Nguyen.
“The game may provide individuals with a lot of benefits other than monetary worth.”
However, it has been evident for months that the game’s economy was suffering, and the SLP and AXS had seen the same kind of volatility as many other crypto currencies. According to crypto data source CoinGecko, the value of SLP surged from 3.5 cents on April 26 to 36.5 cents on May 2 last year, more than 900 percent in less than a week, when the game improved to enable simpler and cheaper trade.
It had plummeted to barely a penny by the end of January this year, having a tremendous influence on how much fiat cash gamers might make. Sky Mavis has tweaked the game to restrict the number of SLPs a player may earn, citing inflation and sustainability issues.
The currency has recently rebounded to roughly three cents, but it is still a far way from its high in the 2021 gold rush. “People are beginning to realize that this isn’t free money dropping from the sky; you have to know how to play this game correctly,” YGG’s Buenaventura said.
To make matters worse for gamers in the Philippines, the country’s tax authorities said last year that they should pay tax on their gaming profits. Lumabi’s monthly earnings in Manila have more than halved since he began playing, but he is undaunted by the fluctuations.
He just purchased two Axies teams, one for his fiancée and the other for one of his sisters. He wants them to become Axie Infinity academics. “My attitude is that as long as I can make 100 pesos or a thousand pesos a month, it’s still a profit,” he added. “It’s just another way to make money.”