How Axie Infinity is growing

Kevin Hoang dreamt of getting paid to play video games when he was 18 years old. When he first saw the play-to-earn NFT game Axie Infinity ten years later, it seemed like his boyhood fantasy had come true. He swiftly moved AcadArena, a Philippines-based esports community he had founded years before, into the uncharted territory of “game guilds” — corporations that support new players and then try to retain them within via training and management.

Players in an NFT game like Axie Infinity must possess or have access to three Pokémon-like animals known as Axies, each of which is a unique NFT that may be fought, traded, and bred. Their average cost per team of three has been approximately $1,000, which is much too expensive for the ordinary player, who is mostly from the Philippines and Venezuela. Guilds sprung up to fill the void, lending the animals out as “scholarships,” which has become one of their many services. You can get more information about “play to earn scholarship” on Balthazar, community of gamers.

AcadArena formerly depended on sporadic commercial sponsorships and tournament prize pools; today, AcadArena has raised $3.5 million in startup financing by giving scholarships for blockchain gaming. According to Hoang, remodeling in the direction of a guild was a step toward stability. “The guild concept itself, for scholarships, individuals being able to play utilizing the assets for free — it was quite attractive,” he told Rest of World.

However, despite the proliferation of NFT games, Axie’s fastest development — and that of the game’s most active guilds — may already be behind it, according to several statistics. The game is expected to have its first drop in monthly users this month since it burst in 2020. Prices for Axie start at $26. Other games in development include Star Atlas and Aurory, both of which are highly anticipated. While Axie struggles to manage its own popularity, with rocketing in-game inflation and declining monthly earnings, the guilds that attract new players are already branching into what they think will be the next big thing.

Players are drawn to guilds in NFT-based games because they can swiftly make money by turning in-game tokens into cryptocurrency, which can subsequently be converted into genuine cash in games like Axie Infinity. Established $80 million in investor money has poured into AcadArena, Yield Guild Games (YGG), and other Southeast Asian gaming guilds in less than a year – an incredible amount for a company that has only been around for a year.

The same financing deluge is being pushed by expectations that Axie Infinity may create a model that can expand into a whole, successful industry of play-to-earn games — and potentially even establish standards for the so-called “metaverse,” a notoriously ill-defined word, as guild founders and investors assert. In the long run, guilds want to offer “infrastructural and economic railroads” by being among the first to enter the field, according to Piers Kicks, crypto lead at Bitkraft Ventures. YGG, one of the first and biggest of its type with over 10,000 members, has grown quickly to invest in over 30 games.

How Axie Infinity is growing

Around $30 million of the $80 million that has been put into Southeast Asian guilds has gone to YGG. According to Axie Archipelago, a guild monitoring initiative bought by YGG, more than 500 guilds of all sizes have cropped up in the Philippines alone. According to a study by Rest of World based on media stories and Crunchbase data, the surge of investment into guilds accounted for about 45 percent of all investments into Southeast Asia’s gaming business over the last 11 months.

For players, Axies are only a method to get the in-game token — in this instance, Smooth Love Potion (SLP) — which is the true reward; SLP purchasers are often crypto speculators who trade the currency like any other investment. As prices climbed in late 2020, guilds stepped in, purchasing Axies and renting them to players for a percentage of their revenue. Over the course of 2021, Axie Infinity grew from roughly 700,000 daily active members to over 2 million.

Guilds established around the game saw quick profits at its height. Unlike prior local firms like as Go-Jek and Grab, which had to burn money for extended periods of time, guilds may make significant revenue as soon as their participants earn.

Following the success of YGG, the five-month-old Good Games Guild (GGG) was founded with the slogan “gaming for a livelihood.” GGG gives a 50/50 share and, on average, spends roughly $1,500 on three Axies, with a four-month return on investment, according to co-founder Aditia Kinarang. It pays an average of $2,000 every “scholar” it enters in the game Pegaxy, with results expected in approximately two months. Kinarang told Rest of World, “We’ve spent roughly $1 million on researchers.” He also said that he intends to break even on the entire scholar investment in five months.

How Axie Infinity is growing

However, because of the declining price of SLP and significant inflation as users cash out, guilds are seeing their return-on-investment term from Axie Infinity stretch. “It won’t be good for the game if it continues,” he continued. GGG is extending its scholarship program to include WonderHero, a fresh play-to-earn mobile role-playing game, while also incubating three additional projects in-house in order to generate more viable products.

Guilds became more important as the user base for NFT games grew. According to Yan Liberman, co-founder of venture capital firm Delphi Digital, which has invested in YGG, Axie Infinity, and other blockchain games, guilds are a supplementary investment to the games itself.

These types of interconnected investments abound in the play-to-earn ecosystem. Sky Mavis, the creator of YGG and Axie Infinity, was invested in by Andreessen Horowitz’s venture capital company a16z in 2021. BreederDAO, a company that develops NFT monsters for the games Axie Infinity, Crabada, and Pegaxy, and sells them to guilds, reported a $10 million investment in January 2022.

In addition to YGG, Delphi Digital has invested in BreederDAO and Laguna Games, a developer in which YGG co-founder Gabby Dizon has a share. GGG, Singapore’s Avocado Guild, and YGG South East Asia are among the guilds in which Animoca Brands, a Hong Kong–based gaming corporation, has developed holdings. Even the Indonesian government’s venture capital arm, Bank Rakyat Indonesia, invested $15 million in YGG.