Its meteoric growth has brought with it meteoric expectations, and the entire blockchain gaming sector is watching. The only resource Axie Infinity lacks is time. If it is resolved, however, exponential upside remains. If this isn’t resolved, the inherent unsustainability of the current model will eventually show its face and lead to economic turmoil. Second, we’ve yet to see how upcoming features will bring more stability to the economy and recurring revenue to Sky Mavis / AXS holders. So far the game has attracted little attention in the developed world outside of crypto enthusiasts and investors, likely due to its particularly high barriers to entry. First, there’s the risk that the game’s player base will remain firmly within the “play-to-earn” crowd without attracting significant numbers of players happy to simply play the game for fun and put new money into the system without expecting a return. Fortunately, it’s relatively early, and there’s still time to tweak certain economic flaws and re-optimize upcoming features for greater success.
This hope squarely rests on the potential of the land-centric user-generated content efforts (some players need to be willing to spend without expecting a financial return), but we’re still hesitant to assume that these particular plans will lead to outsized, sustainable success. What really matters for Axie Infinity’s future is whether Sky Mavis can provide credible future plans for new features that will ground the game in a more stable source of recurring revenue that meets the expectations of all stakeholders. In Sky Mavis’ own words, “this is unsustainable.” Of course, as Keynes probably didn’t say, “the market can stay irrational longer than you can stay solvent.” We think this outcome is likely over the coming months barring any unforeseen spike in new users. The pace of that new user growth is also critical, because any slowdown in the breeding and selling of Axies to new players will lead to a decline in revenue. We concluded our piece with this:Īxie Infinity’s business model, for the moment, depends on continued growth in its user base and continued fresh money entering the system to prop up the value of Axies, $AXS, and $SLP.
We first detailed how Axie Infinity’s developer Sky Mavis achieved fame and fortune in Naavik’s inaugural blockchain game deconstruction in November of last year: Axie Infinity: Infinite Opportunity or Infinite Peril? Sky Mavis was still riding high at the time but was beginning to see signs of slowing growth. This was soon followed by a sector-wide crypto crash, a major fall in stock markets, and growing fears of a coming recession in the global economy.īefore we unpack all that, let’s take a step back. After the initial troubles began, North Korean hackers stole over half a billion dollars in crypto assets from the bridge that connects Ronin, the game’s private blockchain, to Ethereum. Also, this page hosts the first half of the report to receive the full report as a PDF, drop your email above.Īxie Infinity, the former poster child of blockchain gaming and the game that coined the term “Play to Earn,” has fallen on hard times as this “digital nation” reels from a recession prompted by declining player growth and plummeting token values. If you’d like to regularly receive deconstructions and market updates like this, make sure to sign up or request a demo. This essay, spearheaded by Lars Doucet, was first published in Naavik Pro.
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