As profits disappear from NFT game Axie Infinity, so too do players

The HCMC office worker first heard of the NFT-based game last summer, and, after a few weeks of research, decided to invest US$1,000 into three non-fungible tokens linked to in-game characters called "axies."

Axies and "smooth love potion" (SLP), the game’s reward for winning battles using axies, are its two selling points since they can be exchanged into money.

Axies can also be "bred" with SLP and another token called AXS to produce new NFTs.

Price of Axies, SLP and AXS suddenly surged last year, tracking the boom in the popularity of the game as players from developing countries found it a prominent source of income amid the Covid-19 pandemic.

Kha then quit his job and invested all his savings in the game, but prices have fallen since the end of 2021 without any signs of recovery.

In March its Ronin network was hacked, and some $625 million worth of Ethereum and USDC cryptocurrencies was stolen.

An AXS token now is worth $18, a 10th of its peak price last year.

Kha decided to sell off his assets and exit the game.

"Last year I spent thousands of dollars for a team of Axies, and now they are worth a few dozen dollars.

"Everything changed so quickly. I almost broke down and lost all faith, so I decided to delete the app and gave up the dream of making money from playing [Axie Infinity]."

Many others also say on social media they are quitting the game.

Tu Anh, an administrator of an Axie Infinity group on social media, says: "The trend of deleting the game peaked in May after the price of AXS fell to under $20 a token. Rather than flaunt their earnings, players are now complaining that they cannot even break even, and some are furious as they have invested a lot."

The number of Axie Infinity players also declined in the Philippines, its largest market with 40% of the total number.

After peaking in January at 2.7 million, the total number has been falling relentlessly, and there were only 700,000 active users in July.

But Axie Infinity’s economic model relies heavily on constant growth to keep running.

It allows players to create unlimited new SLPs.

"It is a guaranteed means of creating inflation," Mihai Gheza, the cofounder and CEO of Machinations, a consultancy that tests game economies with large-scale software simulations, told American technology news website The Verge.

"From a macro perspective, you’ve created a positive feedback loop."

Axie Infinity was developed by Sky Mavis, a Vietnamese game studio that was valued at $3 billion at the end of last year. Its game, Axie Infinity, is considered the most popular blockchain game globally.