The first time I heard about Axie was much earlier this year... around January. But it was only a few days ago (only 11 months later XD) when Axie finally caught my deeper attention when Leslie from DeFi Singapore brought it up on his weekly coffee talk show. Then, by another coincidence, there was a game demo yesterday during the ETHKL monthly meetup.
I've always been interested in understanding the value behind NFT blockchain games.
But I never really understood it... hence my continued fascination and why I put some skin into these games e.g. I invested a slightly larger than normal position in Aavegotchi.
I am pleasantly surprised, however, what Axie Infinity has managed to achieve.
Usual disclaimer: Not financial advice. Use this content as a free educational resource to supplement your learning, save time and form your own thesis.
Why I find Axie interesting
You've seen it before.
Axie Infinity is another Pokemon-inspired pet collectible game where you can own, breed, evolve, and make your Axies battle with other Axies.
But... as of time of writing:
- It is very expensive for a beginner to even start playing this game.
You would need 3 Axies in your Ethereum wallet to start playing.
Each Axie in the marketplace, as of time of writing, is average US$30.
That's approx. RM 300 just to start playing as a beginner.
The Axie Marketplace - 18,000+ Axies are available in the market. Average price 0.05 ETH ($30)
Now, this is not necessarily a bad thing. After all, the promise of NFT games compared to traditional computer games is that your in-game items can be valuable and thus, may result in a positive return for you playing the game.
Most NFT games are flooded with in-game items which aren't expensive. So...
- What makes this game different that even the most basic Axie is worth $30?
- How did this game become an income lifeboat to a group of young people in the Philippines during COVID-19 as reported by CoinDesk?
Thus, I'd say let's follow the money and see how this works.
Thankfully, I have one friend who kindly loaned me 3 Axies to try out the game. So, let's see what can I make the most out of this.
Play & Earn
I found that there are basically two ways to earn in the game.
The first is to breed and grow new Axies.
1 / Breed a new baby Axie
- Every Axie can only breed maximum 7 times.
- Sibilings cannot breed together and parents cannot breed w their children XD.
- Breeding requires paying a breed cost 0.005 ETH ($3) and Love Potions (1 LP = 100 SLP). If your Axie has breed before, it requires more Love Potions to breed again.
It looks like all 3 Axies my friend loan to me have breed twice before. Thus, if I put two Axies to breed for the third time would cost me 600 small love potions.
- SLP is available on the open market in Uniswap.
SLP right now is $0.025. Thus 600 SLP ($12).
In total, breeding a new Axie would cost me $15.
If this is the cost of each new Axie coming into existence, it becomes clear why even the cheapest Axie in marketplace is selling at 0.05 ETH ($30) to make a profit.
In this snapshot, there are currently 5,500 virgin Axies selling at 0.05 ETH.
And it looks like users do not stop there... because in the snapshot below, as of writing, 400+ Axies are sold in one day with an average price of 0.5 ETH ($300).
The game developers have successfully created an ecosystem that maintains a price floor for Axies that is always above the cost of breeding... and more.
2 / Play the Game. Farm Small Love Potions.
Small love potions can be obtained just by playing the game; both PVE and PVP modes. In fact, the game developers made the game such that these small love potions (SLP) can be openly traded in a decentralised exchange like Uniswap.
So, if I don't have the patience to farm these love potions, I can buy them @ current price of $0.025.
After playing 10 games, i have earned 10 SLP giving me $0.25 (RM1).
Haha... not really a productive use of one hour of my time.
Nevertheless, this isn't the point.
The whole point of games is that (1) it should be fun and (2) a welcome distraction to entertain yourself. There are many games which people invest hundreds if not thousands of game time into them. If a game could give you returns, it is definitely an attractive plus point.
Is the game fun?
I think this is the most important question for the future prospects of the game.
I enjoyed the game :D
Albeit derivative, Axie Infinity delivers an overall well designed & polished game.
There are a lot of interwoven components* that gives depth and complexity to the game... which is what every game needs in order to be fun and challenging.
*Axie has very good documentation and guides.
A game worth its salt eventually has to challenge you... and this game does. By the 6th game, I'm constantly seeing this screen...
... which forces me to revisit what skills can my Axies do, relearn the game mechanics again, tweak my strategies so that I can win the next level.
I'm excited to see how the Axie team and community will bring the game to newer heights. Currently, there are rolling out virtual land. I would never underestimate the potential of the fanbase a game can create. The highest record an Axie was sold for recently was 300 ETH (US$180,000).
However, I personally will observe this from the side. Possibly because, it really is an expensive thing to speculate on. There is one thing, imo, Axie still lacks --- that is the Pikachu factor.
Imagine if the Pokemon Company replicated this, and you are one of the first 18,000 Pikachu breeders... this might have very strong legs. I would probably ape into something like that... or another franchise which I really love.
Nevertheless, I applaud the Axie team for venturing bravely into unchartered terrorities and coming out on top with positive revenue generating cashflows too.
Your rewards when you get them, are well deserved.