[TL;DR]

• Axie Infinity NFT online game’s average monthly players drop below January lows.

• Speculators blame it on the ongoing crypto winter, the $600 million Ronin Bridge exploit, and other factors.

• Meanwhile, Axie Infinity’s developers try to rally by launching a new mini-game, Raylights, but the market remains bearish.

• Only time and the innovativeness of the Axie infinity’s devs can tell if the monster-battling online game will rally.

Introduction

In the last 30 days, Axie Infinity, a non-fungible tokens game, has recorded a massive drop in the number of its active players. Data from ActivePlayer estimate that the average number of monthly players on the game dropped by 75% from January highs. Accordingly, the active player average for the last month rests around 701,000. This is a low not recorded in the history of the game since January 2021 on its climb up.

Certainly, the majority could blame the current state of things on the general bearish turn of the digital assets market. But analysts and platforms point to other culprits that might be equally responsible, including the Ronin Bridge exploit.

Source: Ledger Insights

The Rise and Fall of Axie Infinity NFT Online Game

Axie Infinity is a monster-battling and breeding game powered by blockchain and technology. Players purchase non-fungible tokens, Axies, which they use to battle other players. These Axies can also breed with other NFTs to create new ones that players sell or use in fights.

The game is the brainchild of Sky Mavis, a tech game developer with a largely Vietnam-based team. Axie Infinity went live in 2018 and gained immediate acceptance by gamers as one of the pioneering P2E games. The game also had a unique digital ecosystem that attracted and kept players interested. By December 2020, Axie Infinity was recording a monthly average of approximately 613,000 players. The gaming platform continued to grow steadily till it hit an all-time high of about three million players in January. However, as the crypto winter encroached, these numbers began to dwindle. By May, the average monthly players of the NFT game dropped sharply by 56%. As evidenced by the last 30 days, the downward trend does not look to be stopping.

Factors Affecting Axie Infinity Drop

As briefly mentioned, there are multiple speculations about the cause of the drop in the monster-battling play-to-earn game. Below, we explore these speculations in detail.

• General Crypto Winter Affecting Price Of Tokens: The general crypto and web 3 space have not had an easy time this year. Macroeconomics and the ongoing Russo-Ukrainian war have contributed greatly to a steep downward market trend causing most projects to suffer. Consequently, it is no great surprise that this NFT game is also partaking in the state of things.

• Ronin Bridge Exploit: Another popularly blamed factor for the Axie drop is the Ronin bridge exploit, which took place in March this year. A bad actor hacked some private keys of sky Mavis’ blockchain and used it to steal over $600 million in two transactions. Some suspect this event of adversely affecting public trust in Gamefi, causing Axie Infinity to lose players. Interestingly, this cannot be traced to Axie’s monthly players' chart, as there were no significant drops between March and April. The sharp drop came in June when Axie infinity lost 1.2 million players two months after the Ronin bridge exploit. Yet speculators still hold on to that point of view.

• Reward Token Inflation Due To Massive Influx Of Players: The majority of Axie Infinity players are from developing countries, with almost 50% based in the Philippines. A Twitter user, Sub-Saharan, tracked the earnings of players in one of these countries and asserted that it was higher than the nation’s minimum wage. However, this only drew more players into the game’s ecosystem, playing the game and earning SLP, Axie’s reward tokens. Now, the tokens have hit 40 billion, 94% more than the 2.4 billion total circulating supply in November 2021. Parallelly, the price of the tokens, smooth love potion, has also dropped by 95% since then. The conclusion is that players are withdrawing because the game is no longer as lucrative as it once was.

• High On-boarding Funds Requirement: To be allowed to take part in the Axie Infinity NFT game, players must first own at least three Axies. Each of these NFTs costs between $250 to $500 on average, significantly more for the rarer NFTs. According to nftsstreet, the costliest Axie sold for close to $900,000 in 2021. This investment capital is significantly high enough to dampen some players' enthusiasm. Of course, this is mainly because the larger part of Axie infinity’s player base lives in developing countries.
  
  

Is Axie Infinity’s Raylights The solution?

A week ago, Axie Infinity announced the launch of a new game, Raylights, on its Twitter page. The new game is a land acquisition, cultivation, and decoration mini-game based in Axie’s gaming universe. Raylights is a significant step towards making Axie Infinity the foremost Web 3 brand and IP, according to the announcement. However, going by the comments beneath the post, the general market sentiment towards the game remains bearish.

Final Words

Whether the monster-battling game Axie Infinity will make a comeback is still up in the air. But ultimately, only time will tell as analysts believe that the NFTs market is still viable despite the current turmoil. Furthermore, the team will have to develop more innovative ideas for the game if they hope to stand out. As it is, Axie infinity can no longer rely on the hedge it had at its inception. There is now too much competition in the play-to-earn space for complacency.

Author: M. Olatunji, Gate.io Researcher

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