Axie Infinity, the blockchain-based game that has gained the popularity of the game model to earn, often arouses awe and suspicion. The game has created a new kind of job market and gives game investors a quick return. However, there is a very volatile cryptographic element in the game (Smooth Love Potion, or SLP), a burglary of the Ronin chain and the new digital inequality that is a threat to its existence. Axie is a type of “extreme entrepreneurship”, where success and failure can happen almost overnight, depending on the dynamics of SLP. Many predictions have been made about the upcoming collapse of Axie and lost confidence among its players. Can Axie regain her former glory amidst the cryptic winter and uncertain world economy?
As a game lover myself, I was very curious about the future of Axie Infinity, which led me to want to research it and research it. I interviewed more than a dozen Axie executives, social workers and academics –– some are still active while others have stopped or gone to sleep –– throughout the first half of 2022. I also watched them play Axie Infinity while asking those questions to understand it. of nutty things in the game and assessed Axie’s mistakes and chances. I offer some tips on how Axie can redesign her destiny and move on.
Equalizes demand for SLP
One mistake Axie made was to make too much demand for SLP. The influx of new players must be kept constant, but not grow too much to offer a smoother demand curve for SLP. This could have extended the shelf life of the game. The cost of acquiring Axies (the game’s digital collectibles that can be used in battle and trade) –– which will affect how investors and new players plan their ROI and control their appetite for hiring new scholars –– should be be kept stable but slightly expanded over time.
Another mistake is that Axie has been predominant with players from lower paid countries. This is because the SLPs acquired are very attractive in terms of their local living standards. However, betting on one group of players is too risky. Risk diversification is essential. Axie can attract players from middle to high-wage countries and focus on the game’s “entertainment” at the same time as a “revenue” set as a bonus. It is necessary to move towards a game-owned model, where players have a say in the development of the game.
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One of the biggest mistakes was the misuse of Axie Infinity by multi-account players, which increased the availability of SLP. I heard stories of individual players who played on up to 50 accounts using multiple mobile phones. Axie was too late to deal with this problem.
Balance of SLP supply
Another mistake was Axie’s economics in the game that rewarded SLP players for all the battles they won. This significantly increased the supply of SLP, which led to its value falling. One way to correct this is to introduce more balancing methods that burn SLPs. For example, having an SLP penalty for those who lose a battle.
Another issue is that many players do not pay out hard earned SLP. A healthy SLP payout ratio is essential to prevent SLP oversupply. Axie should keep the “gas fee” when paying out SLPs very low, and can implement a temporary system to pay out SLPs or lose them, and adjust the cost of cultivating Axies as best as possible to burn more SLPs.
The uncertainty factor is important in the economics of the game in order to prevent games from being used by players. Unfortunately, Axie has simply been too predictable in how players can win SLP. Another policy would be to offer a time lag between breeding and giving birth to new axes, or even add some SLP costs to raising a young ax.
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Axie’s creative business model
A key factor in Axie Infinity’s business model is the price of SLP, which is affected by a number of factors: supply and demand for SLP, supply of Axies, cryptocurrency rules, cryptocurrency fluctuations and SLP merchant behavior. Thus, the price of SLP is partly manageable and partly outside Axie’s sphere of influence. Nansen estimated that Axie’s revenue of $ 1.35 billion (from May 2021 to May 2022) would come mostly from cultivation fees (85%) and market fees (13%). This shows how limited Axie’s source of income is. Axie Infinity must find ways to increase its revenue base in addition to cultivation and marketing expenses.
A creative business model is essential. In order to increase the number of new players, Axie must innovate and offer a gaming experience beyond the static environment of its small square area, which is very boring for players. The little monsters can afford to roam the world of Lunacia and face danger (such as a deadly epidemic) or scavenging animals that will burn SLP or reduce its supply. Players must be able to combine their aces with the axes of other players in a fierce battle with other aces – such as the epic battles in the mecha anime series Gundam – thus increasing the new demand for SLP. It is necessary to develop the game with indie designers, but this requires a profit-making model for it to work. Axie can also change the Pokémon Go approach by allowing players to spend money on decorations, avatars and merchandise to increase their revenue.
Some of my whistleblowers suggested that Axie should allow “fiery SLPs to upgrade to powerful Axies,” “grow the AXS market,” and “host international esports tournaments.” Esports is one lucrative venue where Axie could make his mark.
Another mistake was the lack of communication between Sky Mavis, developer and publisher Axie Infinity, and its community. Many of my whistleblowers argued that Axie’s future plans were bleak. There have also been complaints about the “power game” that the core team Sky Mavis showed against the Axie Infinity community. This requires cultural optimization of the Axie ecosystem.
Not so pessimistic future Axie Infinity
In the middle of this cryptocurrency, Axie sold over 325,000 Axies for more than 3,500 ETH in total, approximately $ 3.9 million. In my real-time experiments in the game with some Axie scholars in June 2022, the time to find enemies before each battle has remained the same, suggesting that there are still many Axie players out there, contrary to the prediction that most players would leave Axie. However, it’s a temptation for Axie players and managers to take part in other winning games to earn. This is a new battle for Axie: the “exchange”.
Axie Infinity could not disappear altogether. It will probably reinvent itself and map out new destinies in the rapidly changing GameFi landscape. GameFi is here to be a space for experiments in Metaverse that blurs the line between entertainment and work / investment.
This article does not include investment advice or advice. Every investment and trading business involves risk and readers should do their own research when making a decision.
The views, opinions and opinions expressed herein are those of the authors only and do not necessarily reflect or represent the views and opinions of the Cointelegraph or The Hong Kong Polytechnic University or its affiliates.
Yanto Chandra is an associate professor at The Hong Kong Polytechnic University. He is a pioneering researcher in the fields of Web3, NFT, GameFi and Metaverse using the sciences of planning and entrepreneurship.
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