Let’s talk Axie Infinity. The brand has caught our attention as of late for a few reasons. We’re talking about a video game that has really pushed the NFT market forward, yet is so simple that people in their 70’s are managing to make real life incomes from playing it.
But first, lets preface this with the fact that we don’t play video games, and when it comes to crypto, well, we aren’t exactly known for being huge bulls on the space. But after months of our video producer Chriz saying to us, “Guys, when are you going to cover Axie Infinity?” and, “Have you looked into Axie Infinity yet?” we decided it was time to finally dive in.
Axie Infinity is a growing universe of games and systems that use Pokemon-like characters called Axies. The characters, land, and accessories can be sold as NTFs, or non-fungible tokens for those of you whom are new to the term. The game itself is a hybrid of card-based battle systems and turn-based combat.
To play the game you need a phone or computer with internet access, and you have to start off with three axies. Players use their tokens called SLPs (Smooth Love Potions) and AXS (Axis Infinity Shards) to buy land, farm, or breed Axies within Lunacia. And since the tokens have value, players can actually use them to convert to real hard cash.
What makes this game so unique, is that it has created real world economic impacts for people across the Philippines and Vietnam. There are examples popping up in stories all over the internet from mothers to grandparents earning a living playing the game on their phones, in regions where a day’s pay in USD terms is typically in the low single digits.
Of course, one of the challenges to participating in the game is that you need 3 axies to play. And with the cheapest Axies selling for around $300 USD each, it has created an economic barrier for some to even play the game. To get around these economic barriers the community created something scholarships. This is a profit-sharing model where Axie owners rent their NFTs to new players so they can play the game and start earning SLP without having to buy any NFTs or invest any money upfront.
If you are like us, you’re probably interested in the venture side of it. Who created this game? How’d they do it? What drove them? And just how successful are they today?
So the game was founded by a man named Trung Nguyen. He previously worked as the CTO for Lozi, a social network for food bloggers which at one point reached 8 million users.
In 2017, Nyguen started playing a game called CryptoKitties and was fascinated by the economy that formed the game. He realized he could make a blockchain-based game of his own, combining elements of the advanced genetic system found in CryptoKitties with the competitive gameplay of the Pokémon series.
The beta version of Axie Infinity was released in mid-2018. It was a massive hit, to the point that revenue from pre-orders of Axies was enough to give the developers a full year’s cash runway.
On August 7th of this year, it was announced the game hit 1 million daily active users. Data from DappRadar shows the company has done over $300M in sales volume over the last 30 days alone, with over 260,000 traders. The company has two notable investors, New York Based Delphi Digital, and Mark Cuban.
The most expensive Axie sale to date occurred when “Flying Falcon,” purchased the digital estate of nine adjacent Genesis blocks for 888.25 ETH or around US$1.5M. At the time, the transaction marked the largest non-fungible token (NFT) transaction of all time.
The game has actually been so successful that there has been scaling issues. Developers even created Ronin, a new Ethereum sidechain in June of 2020 designed specifically for the Axie Infinity community to support scaling and a smoother game play experience for a large number of users.
If you are viewing this from Canada or the US, and are wondering “how do I play?” it’s difficult, because the Axie Tokens are not available on the major US cryptocurrency exchanges. To play, you are going to have to be on one of the exchanges that carry additional risks where you could find yourself unable to sell certain coins or have your accounts frozen altogether – which is a whole topic we should save for another day.
Play-To-Earn games combined with NFTs could easily explode into a new category that has investors frothing at the mouth. Of course, these games only work if they reach mass adoption, and there are only so many people who are going to play games like these.
However, it’s worth putting this on the radar of the Canadian and US small cap or venture investors, because here we have a game that kind of came out of nowhere, that we’d have to assume would easily be valued north of a billion dollars if it were publicly traded today.
Information for this briefing was found via the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.