Conversations around blockchain technologies and their adoption into video games like Axie Infinity have been gaining steam for quite some time now.
Where one half of the argument feels that NFTs will eventually disrupt a lot of industries, the other is certain that it will be changing a lot of existing notions, especially when it comes to video games.
However, irrespective of the debates surrounding cryptocurrencies, NFTs or non-fungible tokens have been gaining popularity by the day. Games like Axie Infinity have been helping to spread the crypto gospel in town, and the “play-to-earn” model for video games is steadily becoming a growing trend, at least for developing nations.
Even Ubisoft’s CEO, Yves Guillemot, announced plans for NFTs in the studio’s games, with Ghost Recon’s NFTs being the first in line for many. But Ubisoft is not the only one jumping onto the NFT games bandwagon, and soon after Yves’ announcement, both Square Enix and GSC Game World talked about similar plans for the future.
Axie Infinity and its growing success is playing a key role in making triple-A publishers take notice of how implementing cryptocurrencies in video games can create an ecosystem where users can benefit financially.
And according to many market leaders, Sky Mavis’ NFT game has been redefining the video games industry, leaving an imprint that might dictate its future in coming years.
What is Axie Infinity?
Video games have traditionally either persuaded players to invest in digital (or physical) assets or sit through advertisements (if they are free to play) if they wished to play a particular title or attempt to generate revenue from it.
The case with Axie Infinity is different, as it successfully brings an entirely new meaning and value to the field of “revenue generation”.
To those uninitiated, Axie Infinity is a “blockchain-based battling and trading game”, which draws heavily from games like Pokemon and Tamagotchi. Its gameplay is very similar to that of Pokemon where players will need to collect token-based creatures called Axies, breed them, raise them, trade them, and eventually use them in battle.
However, the difference lies in the fact that Axies can only be partially owned and operated by the players, but gamers can own assets and monetize on them as the ecosystem grows, helping many to earn a regular income from the platform.
So why is the Pokemon clone suddenly this popular?
1) Play-to-earn model is a big hit in emerging nations
Axie Infinity is growing in popularity among casual gamers because of how it allows them to accumulate financial gains by just playing it. Hence, this model has been quite lucrative in nations like the Philippines and Indonesia, where the average per capita income is significantly lower than the gains that can be obtained by playing the game itself.
Axie Infinity primarily has two cryptocurrencies that are embedded in the game’s ecosystem, the AXS (which is the primary NFT) and the SLP (small love potion). The significance of these two will be touched upon a bit later.
During the pandemic, when many lost their livelihoods in these regions, playing and trading in Axie Infinity became a viable career option for many. The more people played, the more the ecosystem grew, and the financial gains grew in conjunction with that.
The ecosystem eventually saw millions of daily active users, and demand for the game’s collectible creatures skyrocketed over time.
2) The emergence of the guild system
Over the years, the Axie Infinity universe has grown quite vast, the expansive world and the underlying ecosystem can indeed be very hard to understand. Those trying to get into the game may find it quite complicated to understand and might have to shell out a significant amount of their savings just to properly get into the game.
As mentioned, the growing popularity of the game indicates that the Axies themselves will have a very high demand, which means that newer players eventually end up having a hard time playing the game, let alone start to gain a profit from it.
This is what led to the emergence of the guild system in Axie Infinity, where community members created small organizations of players who loaned out their Axies to those new to the game. However, the process is not entirely charitable, as the guild would take a percentage of the profits that the new players will be earning.
This system is what eventually made Axie Infinity considerably more accessible, and while the virtual economy might feel complicated on the surface, it’s very easy to grasp once players start investing more time in playing the game.
3) PvP/PvE battles and the Scholarship program
Getting into NFT games can be difficult, and at times a very complicated process, and Axie Infinity is no stranger to this very fact.
To get started, players will need to go through a variety of steps that will require them to set up several accounts and cryptocurrency wallets. At a bare minimum, new players will have to have an Ethereum wallet, a Ronin Wallet, an Axie Infinity account, and then finally linking them together.
However, the initiation process does not end there, as players will then need to buy at least three Axies just to start playing the game. And this is where things get rather difficult for people who are new to the title, as Axies are facing very high demand, and to buy them directly in the game, players will need to shell out a fortune.
This eventually gave rise to the guild system, which ended up giving birth to the Axie Infinity Scholarship program, where the game allows more experienced players to rent their Axies to those new to the game.
But much like the guild system, the new players will need to give their managers a percentage of their income, and this income is generated when players put their Axie in battle. Much like the encounters in Pokemon, battles in Axie Infinity are carried out quite similarly and are either PvP, which is against other players or PvE, which is against the game’s AI.
The multiplayer aspect is rather neat, and there are many players in the community who find the base gameplay quite engaging. As players get to level up their Axies and make them more battle-ready by implementing upgrades and power-ups, Axie Infinity plays out like any other traditional RPG and does come with a certain level of grind attached to it.
Now, these battles generate the SLP cryptocurrency token that can be directly converted into real cash, so the more a person wins in the game, the more SLP they will generate.
The other currency in Axie Infinity is the AXS, which functions a bit differently than the SLP. While the latter translates directly into real-life currency, AXS is the token that will allow players to shape the game's universe as well as to breed new Axies.
Hence, compared to SLP, AXS is a much more valuable resource in the game and is also not as easily gettable.
4) Axie breeding
Breeding Axie is another fun and engaging mechanic that the game has borrowed from the Pokemon titles. And much like with the Pokemon’s themselves, Axies come in a variety of types as well, and each type has its own weaknesses and strengths.
This is what makes the combat aspect of Axie Infinity a bit more entertaining and competitive, and makes sure that players don’t get easily bored with what the game brings to the table.
Axie customizations are another interesting aspect that a lot of players actually enjoy. From their horns to hooves and beaks, there is a lot that players can tweak to customize these critters.
So, the stronger the Axie, the more valuable they are when they are rented out to new players via the Scholarship program. This creates a cycle of revenue generation in the Axie Infinity ecosystem, which allows players to earn a livelihood the more time they invest in the game.
5) A Utopian construct: Work and Play becomes one
The “metaverse” has been an emerging concept and much of Axie Infinity’s gameplay and construct is based around this vision.
On Axie Infinity’s official website, the developers went over some of the plans that they have for the future of the game. They believe in an ecosystem where “work and play becomes one,” and that they “believe in empowering our players and giving them economic opportunities.”
The dream does feel ambitious, but Axie Infinity has indeed been able to grow as a casual gamer’s primary, and alternate source of income.
The game holds a lot of potential for players, and it is so popular in the Philippines that a 22-year-old, John Aaron Ramos, was even able to monetize on Axie Infinity and purchase two homes at the same time.
The downside of NFT games: Player exploitation
While a large portion of the community has a positive outlook towards Axie Infinity, there are some who are a bit wary about NFT games and how they might eventually lead to player exploitation.
The naysayers feel, that the play-to-earn model will eventually take the fun away from the “play” and will eventually lead to an ecosystem where people are going into games like Axie Infinity to just draw profits. Guilds and Scholarship programs can ultimately end up exploiting new players and gatekeeping them in a cycle that eventually stagnates the ecosystem.
Even Xbox CEO, Phil Spencer, in an interview with Axios said:
"What I'd say today on NFT, all up, is I think there's a lot of speculation and experimentation that's happening, and that some of the creative that I see today feels more exploitive than about entertainment."
Even GSC Game World faced a significant community backlash after they announced an NFT approach towards S.T.A.L.K.E.R 2. The majority of their player base did not take it well, which ultimately forced the developers to cancel the plans that they had for linking cryptocurrencies with their titles.
So, not everyone wants to see NFTs be introduced in their favorite video games.
The two sides of the cryptocurrency argument have their own valid reasons for the stances that they take. And while the NFT games genre feels like the most lucrative concept on the market, it’s still very new and investors (with time or money) are advised to approach it with caution.