Axie Infinity (AXS), a crypto “play-to-earn” game, once known as a revolutionary gaming project that would change the gaming industry and digital economy, turns out to be nothing but a scam structure for players. According to the recent Bloomberg report, Axie caused millions of losses to players due to its sketchy tokenomics in the name of the play to earn. How did it all happen?
Axie Infinity is a well-known blockchain-based game that introduced a new economic concept that could help players earn money while playing. Seeing the many opportunities for the crypto community, the gaming community decided to try out Axie Infinity. Many gamers spent thousands of dollars. At first, the game was a good investment with around 300-400% weekly profits but gradually it became a disaster and an eventual loss.
In 2021, Axie Infinity generated around $1.3B. The game was valued to be around 3 billion by the investors after it raised around $152 million in investment funds led by a16z.
Surely, the creator Sky Mavis was optimistic that the game would continue to peak due to its play-to-earn feature that lured players in. Turns out, the game didn’t survive long just like any other game. Its economic metrics dropped and users were at a complete loss for the money they invested in.
How does the Axie Infinity game work?
Axie Infinity games were designed by Sky Mavis as a life-changing game that could make you rich just by playing games. There are mainly NFT-based characters called Axies in a team of three that fight each other. Once all three members of a team are dead, the team loses. The fight takes place within five minutes and the winner wins Smooth Love Potion (SLP) tokens for small games and Axie Infinity Shards (AXS) for large tournaments.
The game is quite serious and requires clever strategies and plans in using powers and fighting specialties to win. At first, the players find it fun to plan and research strategies, visit Discord channels, read Reddit forums, and join communities to gain tips. It’s quite addicting but players might lose interest if they don’t play fighting games much.
However, some spend thousands of dollars to win a game. The apparent example is Alejo Lopez de Armentia interviewed by Bloomberg, who poured over 40,000 dollars. For Armentia, the game felt like a good investment and he hoped it would become his full-time job. Last year, Axie did tie with other cryptocurrencies as a valuable token but this year the game failed to generate enough revenue due to a lack of interest.
Axie Infinity: a scam tokenomics structure?
Axie Infinity’s decreasing popularity comes from its tokenomics which didn’t work well with players. The creator Sky Mavis designed an economic structure that was considered an example of what a blockchain world would look like in the next ten years but if it does look like this in the future, it’s going to be a complete disaster like this game.
This tokenomics structure lacked in many ways which scammed people out of their own money. People were asked to buy in and invest some money, they profited a little, and eventually lost everything, including the money they invested. This is the Great Tokenomics Scam of blockchain gaming.
Axie Infinity began losing its revenue this year when the players lessened by 40% and SLP started to drop at extreme rates. The prices became worse when the creator Sky Mavis got robbed by 23 hackers. Then came the crypto winter when the market crash caused AXS to drop below $20 and SLP was only half a penny.
People began withdrawing their cryptocurrencies in a massive number until there were only a few left on the platform, and this marked the supposedly “an end of an era” for Axie Infinity.
It’s truly surprising to see a dominating blockchain gaming air out all its funds and be left with the bare minimum within a few months. This might indicate that the tokenomics structure itself was too weak to withhold a market crash despite so many investments made by top VCs around the world.
Sky Mavis changes its strategy
Now, to save themselves from the doubt, Sky Mavis decided to change their game stance from “play-to-earn” to “play-and-earn” on their website, as reported by Bloomberg.
This caused a lot of questions among players because a blockchain game that once prided itself on the most revolutionary “play-to-earn” game completely changed its words within a few months.
The team seems to be trying its best to maintain its name in the market, but there is nothing to be done with the declining market and the extremely low value of the token. The game went through some major employee changes in hopes to make improvements to the game soon.
It’s really surprising to see a game that was almost seen as a full-time job because used to hire players from low-income regions to play for them for little money, which turned out to be a complete loss for the owners.
What made Axie Infinity a total failure?
The problem with P2E games is that if the game isn’t fun, the investors pour in and see it as a money-making business. The same thing happened with Axie Infinity. The game itself wasn’t much fun but it profited players and they could earn and trade cryptocurrencies for playing games.
In other words, Axie Infinity games were a result of a disaster that started off due to investors. People thought the game was the source of their income and poured almost all their savings into it, which is the biggest mistake that led to the loss.
Axie Infinity’s example shows that blockchain gaming, especially those with P2E models still have a long way to go before they become a proper industry. The developers need to think of a better plan when creating a digital currency-based play-to-earn game.
For players, it is necessary to never depend upon the gaming industry as a source of income. Axie Infinity gives a moral to all investors and players who are blinded by the greed of earning money through gaming. It’s not a proper job and should never be the main source of income.
