By Eli Tan

Photo by | Jes Aznar

Compiled by Ehan Wu on Blockchain

original:

https://www.nytimes.com/2024/03/18/technology/crypto-video-games-philippines.html

On a recent day, about 20 people crowded into the second floor of Joniel Bon’s new Internet cafe in Quezon City, 10 miles from Manila. They sat in front of computers equipped with 34-inch curved monitors and started playing games such as “Heroes of Mavia” and “Nifty Island,” while music from Taylor Swift and Maroon 5 blared from the speakers.

Playing these games can become a full-time job, and some of Bon’s customers have settled in to fuel up with pizza. The games reward players with cryptocurrency for completing small daily challenges. Typically, players exchange their tokens for the country’s currency, the peso, earning about twice the Philippines’ minimum wage of $11 a day.

(A cafe called NFT X Street)

Bon, 40, had always dreamed of a thriving business, but his hopes for a thriving gaming community were dashed two years ago after the crypto market crash. Now Bon's new internet cafe is a sign that cryptocurrencies are beginning to flourish again in the Philippines, long a hub for cryptocurrency activity. This month, Bitcoin hit an all-time high, ending a recovery from the 2022 market crash and driving a resurgence in cryptocurrencies such as Ethereum.

New billboards for cryptocurrency companies have appeared across Manila. People have begun harvesting virtual crops from a crypto farming game called Pixels as a new source of income. Filipinos working overseas have also returned to earn cryptocurrency through the Metaverse.

(Players in an internet cafe checking their encrypted wallets)

(Anime figures decorated in Internet cafes)

According to Chainaanalysis, cryptocurrency trading volume in the Philippines increased 70% month-on-month to $7.3 billion in November and December. Game developer Pixels said the number of Filipino players surged to more than 830,000 in March from 80,000 in November. And about 30% of the world's crypto game players are from the Philippines.

(Joniel Bon on the left)

The resurgence in activity has worried some Philippine officials. At a cryptocurrency conference in Manila last November, Kelvin Lee, then-commissioner of the Philippines Securities and Exchange Commission, said the government was grappling with how to regulate the technology as it regains popularity.

Cryptocurrencies have been the epicenter of fraud in the past, and the tokens issued by cryptocurrency games are more volatile than Bitcoin and Ethereum, meaning the boom could crash again.

“We want a safe space to operate,” Lee said, acknowledging that a strong cryptocurrency industry could help the Philippines, which relies heavily on outsourced customer service and information technology jobs. “How can you operate well if the space itself looks disorderly, chaotic, and illegal?”

Lee declined an interview request after leaving the commission this month. Last month, the Philippines' central bank told local media it plans to launch its own digital currency in the next two years. Cryptocurrencies have become particularly popular in the Philippines during the pandemic lockdown. While more than 40% of the country's population does not have a bank account, most Filipino households have internet access, allowing cryptocurrencies to spread to rural areas. During the lockdown, people began playing Axie Infinity, a PlaytoEarn game developed by Vietnamese company Sky Mavis. In the game, players battle Pokémon-like characters to earn a token called Smooth Love Potion.

(People playing Axie Infinity, source: Jam Sta Rosa/AFP)

At the height of Axie Infinity in 2021, Smooth Love Potion was accepted as a payment token by landlords, gas stations and some restaurants in the Philippines. But when the crypto market crashed a year later, thousands of Filipinos lost their Smooth Love Potion savings. The game's characters were once traded for thousands of dollars and were so valuable that some Filipinos even took out loans to buy them. However, when the cryptocurrency market collapsed, the characters became worthless. "When everyone got into the game, it worked really well," said Ian Dela Cruz, a 30-year-old farmer and former Axie player. "But when everyone tried to quit, the game stagnated."

(Former Axie player Ian Dela Cruz stayed in the crypto industry and became a game streamer on Twitch)

Some Filipinos who made their first fortunes with Axie became entrepreneurs, building their own companies and gaming collectives, called “guilds,” that are still going strong today. Teresa Pia, 27, a former Axie player, quit her job as a kindergarten teacher in 2021 to start a crypto gaming guild called Real Deal, which has 54,000 members on the social media platform Discord. Pia said she sees her Discord channel as a “new classroom,” where she teaches many Filipino women working abroad how to trade and invest in cryptocurrencies. With the cryptocurrency recovery, many women have now made enough money to return home to their families.

(Former Axie player Teresa Pia teaches members how to trade and invest in cryptocurrencies in the Discord channel)

“The money they receive may seem small, but when you convert it into pesos, it’s a lot of money for them,” Pia said. Dela Cruz stayed in the crypto industry, streaming games on Twitch, the Amazon-owned streaming platform. He is now the captain of one of the largest e-sports teams in the Philippines. He said many farmers have started playing Pixels and harvesting virtual crops to earn cryptocurrency as extra income. Luke Barwikowski, the game’s American founder, said Filipino farmers have offered him advice on how to make Pixels more realistic. “Some users will directly provide us with their crop schedules or watering habits.”

Even by crypto standards, the industry in the Philippines is full of opportunists. Phishing scams are rampant in online crypto communities on platforms such as Discord and X, as are “pig-killing” scams, in which scammers target victims through scam messages. Former players said that in Axie’s heyday, some guild leaders exploited weaker players and took half of their income as membership fees. Bon said that in addition to providing computers and resources for guild members, he also sees his job as a protector. “This is family.”

The Dela Cruz family's farm in Pampanga province, where many farmers have started playing Pixels.

While cryptocurrency has been a boon for many Filipinos, some say they can turn to other opportunities if the industry collapses again. Dela Cruz dreams of managing more farms with his brothers without having to rely on cryptocurrency for income. “The fresh air, the sound of chickens, you can’t find that online,” he said.