Axie Infinity, the NFT game on Ethereum’s blockchain that is exploding, has been analyzed by Naavik and the report notes that daily earnings of players, especially “Scholars”, have been declining since August.
Axie Infinity NFT, Naavik’s report
Blockchain games are experiencing explosive growth, and Axie Infinity seems to be riding the crest of the wave, surpassing $3 billion in Non Fungible Token (NFT) sales.
However, according to Naavik‘s “Infinite Opportunity or Infinite Peril?” report, researchers say that players are actually seeing a decline in daily earnings since August, especially for the “Scholar” category, the typical player in developing countries.
Lars Doucet shares the results of the study in a series of tweets:
After months of incredible growth, the daily earnings of the typical player of Axie Infinity (a "scholar" in the Philippines) have fallen below the Philippines' minimum wage line for all but the high ranking players, and even they have seen earnings decline since August pic.twitter.com/ejidWkWc1G
— Lars "Totally Texas" Doucet (@larsiusprime) November 12, 2021
“After months of incredible growth, the daily earnings of the typical player of Axie Infinity (a “scholar” in the Philippines) have fallen below the Philippines’ minimum wage line for all but the high ranking players, and even they have seen earnings decline since August”.
In practice, Doucet explains that the “Scholars” are the players, typically from developing countries, who cannot afford to buy [three] Axies (virtual Pokemon-like creatures based on NFTs) that are required to play the game. They are loaned by “sponsors” who take a share of their earnings.
The majority of Axie Infinity players are indeed Scholars, spread across the globe as follows: 65-70% in Southeast Asia, 55% in the Philippines and 10% in the US.
Axie Infinity: between explosive growth and earnings declines
These findings by the Naavik researchers show how Axie Infinity has experienced explosive growth but also declines in earnings in developing countries, while also talking about the danger of “retention at work” for these countries.
In fact, the game on the Ethereum blockchain has reportedly raised capital in a couple of rounds from investors such as Consensys, Delphi Digital and Animoca Brands. While Axie Infinity’s daily active users (DAUs) skyrocketed with cumulative DAUs in September and October being around 1.45-1.95 million daily active users.
Nevertheless, earnings for players in the Philippines are falling. In this regard, Naavik analysts comment:
“This month-over-month DAU growth trend shows that Axie Infinity’s growth spurt is somewhat decelerating, but a deceleration following such an impressive burst of growth is to be expected”.
On the subject of declining earnings and the danger of “retention at work”, the Naavik researchers comment as follows:
“It’s possible that as long as Axie Infinity enables its scholar-dominated player base to earn more income than they would doing normal jobs in their home countries, long-term retention and DAU growth will continue to remain healthy,” the Naavik authors opine. “All in all, Axie Infinity’s growth spurt is decelerating (although still positive), and a majority of its player base treats the game like a daily job to make daily financial ends meet”.
Play to Earn: gaming on blockchain
Recently, a study commissioned by gaming company Stratis consolidated the idea that more and more gaming platforms in the US and UK are choosing blockchain technology.
Out of an interview of 197 players in the gaming world, 58% are starting to use blockchain to develop their games. Not only that, of these, 48% are incorporating NFT components into their blockchain games. p
The most interesting feature of this integration of blockchain and NFTs in gaming is “Play to Earn”, the mechanism by which NFTs or other tokens make the game profitable. Play to Earn means that players can earn money by playing, by participating in what is called GameFi.