Blockchain games haven’t lived up to their expectations.
Despite millions in venture funding, crypto versions of big-budget AAA games have failed to materialise.
But Aleksander Larsen, co-founder of Axie Infinity creator Sky Mavis, still believes. Indeed, he said crypto games’ brightest days are yet to come.
“The potential for blockchain games is actually to be a provider of jobs for hundreds of millions of people around the world,” Larsen said in an interview with DL News. “It will create GDP for the world in a way that we have never even thought about.”
“That is actually not dystopian to me,” he said.
Larsen’s unabashed promotion may raise an eyebrow, but not too long ago Axie Infinity was a phenomenon.
In 2021, it was the most popular game in crypto and its token soared to a $10 billion market value as Bitcoin hit all-time highs.
But the game soon lost its appeal. Many players fled as the game’s AXS token fell 96%. Some critics even compared the way the game worked to a Pyramid scheme.
While the mania is over, it’s not forgotten. Many players, Larsen said, are still nostalgic for those heady days where they could make thousands of dollars a month playing the game.
“They love the connection that they had with their guild mates,” he said.
It’s this comradery and community building, Larsen said, that could drive crypto games to new heights.
But there’s also a darker side to the hyper financial world of crypto gaming that the industry may find difficult to reconcile.
Define ‘Fun’
A common criticism of blockchain games is that they aren’t fun in the same way more conventional games are.
Players have said Axie Infinity was boring and stressful, and admit they only played it because they could make money doing so.
Larsen argues that the definition of fun is broader.
“I think games are entertaining,” he said. “I’m a competitive gamer. When I play games, I want to win. I want to crush someone. I’m not smiling when I’m playing a game. To me, it’s not necessarily fun — It’s entertaining.”
But in Axie Infinity, winning or losing isn’t just about one’s prestige in the game — it determines how much money players make.
Axie isn’t the first time video games and finance have intersected.
Players earning in-game currency and selling it to other players for cash are an enduring phenomenon in popular multiplayer role-playing games, despite the practice usually being against the rules.
However, in those games, participating in their shadow economies is optional. Most players don’t view their in-game items as having an explicit dollar value.
But in Axie Infinity, the financialisation is ingrained.
It’s this feature that has created the most issues, but also potentially allows the game to create jobs and wealth as Larsen envisions.
Luring new players
At its peak, Axie Infinity boasted some 2.7 million monthly active users. That’s dropped to just 325,000 over the past 30 days.
Sky Mavis is exploring new ways to get more people playing. “We always look for distribution platforms — how can we get users who are not into blockchain through different channels,” Larsen said.
Telegram, and the tap-to-earn games on its associated TON blockchain, are of great interest. These simple mobile games centre around players taping their screens to progress. One game, called Catizen, claims to have over 3.3 million daily players.
But there are reasons to be sceptical. Such tap-based games lack depth. Many players are only there because of the promise of a token airdrop.
Larsen wants to make better use of the opportunity.
He said Sky Mavis is in the process of launching its first games inside Telegram using its in-house crypto wallet called Ronin.
“It’s actually not about the games themselves,” he said. “It’s about the access to the users on the network.”
Saddled with debt
But even with a good distribution network, Axie Infinity needs to be compelling.
At the heart of the game’s previous success was its ability to make players rich.
Players earn valuable tokens through the game. But to participate, they need those tokens to create Axies, the cute Pokemon-like creatures key to Axie Infinity’s gameplay.
As more people saw the money they could make playing the game, demand for Axies — and the tokens needed to create them — exploded.
By mid-2021, rich western players, tired of grinding the game themselves, were outsourcing the job to those in developing countries like the Philippines, a practice known as providing scholarships.
Many players in the Philippines profited from such scholarships, often earning more than they could through conventional jobs.
There’s also the argument that games like Axie Infinity could help offset future labour surpluses caused by increased automation.
“We’re not going to need all the jobs that we have,” Larsen said. “They’re going to have to find other things to do. That could be in the digital space.”
But not everyone is convinced. Many have criticised the inherent power dynamics of scholarships, and even called the practice “digital colonialism.”
“It’s very easy for them to attack from a Western perspective,” Larsen said. “Maybe human beings want to evolve and do the things that they want to do, rather than us setting the parameters for what’s okay for them to do.”
A volatile economy
There’s also the issue of Axie Infinity’s volatile economy.
When it crashed in early 2022, the once-valuable Axies became almost worthless. Many Filipino players were saddled with the debt taken out to play the game, with no way to pay it off.
Larsen said Sky Mavis has taken steps to help Filipino players get more educated with the game and its underlying technology.
But several issues remain.
Axie Infinity wasn’t sustainable. The game relied on continual new demand for the tokens earned by players.
The money earned by scholars in the Philippines was fueled by demand from richer western players hoping they could make even more money investing in the game.
Larsen said Sky Mavis is exploring more sustainable crypto game economies. It’s also launched several spin-off games.
“We’re just in a very, very early inning,” Larsen said. “It’s wrong to judge the games on where they are today without looking forward to what they will become.”
A newer version of the game, Axie Infinity: Origins, doesn’t involve crypto.
Tim Craig is DL News’ Edinburgh-based DeFi Correspondent. Reach out with tips at tim@dlnews.com.
