Axie Infinity is a popular name in the Web 3.0 NFT crypto gaming space, and many of us have heard about it. Its meteoric rise in a single year, followed by a precipitous drop in 2022, is quite the story. Even if you don't like crypto, you probably agree that Axie Infinity has become the best example of crypto Web3 NFT gaming. It became the face of the industry with the revolution it brought and was touted as one of the best blockchain game apps. It flipped the lives of many, taking them from rags to riches in no time. On the contrary, it also caused catastrophic losses to others. So, how did Axie Infinity perform in the year 2022? And what does the future hold for this blockchain game? Let’s analyze the current situation as well as what the future might hold.
Axie Infinity and the Year 2022: How Has It Unfolded?
Axie Infinity is a popular or infamous Pokemon-inspired blockchain game where players breed, raise, and battle cute little monsters called Axies. The game is based on a "play to earn" model. The game offers rewards in cryptocurrency to the players, exchangeable for real money. The developer of the game as well as the Ronin Bridge is a Vietnam-based studio, Sky Mavis. Axie Infinity came out in 2018, but it became very popular very quickly because of the pandemic and the global lockdown. Just during last year’s summer, players were earning so much through the game that they had to quit their regular full-time jobs to invest more time in the game, especially in low and middle-income countries.
The game requires players to buy NFTs to begin playing, which players gladly did even though the entry investment was more than $1000 at its peak. Also, the people who made the game were worth more than $3 billion after Andreessen Horowitz led a $152 million funding round in October 2021. Everything was looking picture-perfect, and the global Axie frenzy was surely leading the revolutionary play to earn gaming space. But it all started to fall apart just at the end of 2021 and the beginning of 2022. The year 2022 proved rougher for Axie Infinity.
Axie Infinity Witness: Rise and Decline (Current Standing)
Long before the unfortunate hack, Axie Infinity started losing its number of daily active users in November 2021. It only got worse in 2022; the decrease was more than 45% from its peak at the end of 2021. Before the hack, Axie Infinity’s DAUs had plummeted to 1.48 million from a high of 2.7 million. Moreover, the value of the in-game currency also suffered and saw a new low of $0.02. It was all happening amid the cryptocurrency market crash and dwindling interest in NFTs.
Just as Sky Mavis was working hard to convince and inspire its community by making long-term promises, the record-breaking hack happened. On March 23, 2022, Axie Infinity got hacked, and the hackers made off with $620 million worth of cryptocurrency, making it the biggest crypto heist of all time. With this hack and the ongoing crypto winter, it was hard for Sky Mavis and Axie Infinity to get people to trust them again.
So, why did Axie Infinity face player retention issues even before the hack? The game offers its community the sole motivation of earning money. The elements of entertainment and fun are given little to no value by Sky Mavis. It reduces the game to no more than digital sharecropping and just the grind. The game was and still is primarily driven by speculation, and it is heavily reliant on new players. As soon as the inflow of new players slowed down, the tokenomics of the game went out of control in 2022.
However, the current standing of the game is not all bleak and horrific. Axie Infinity showed a silver lining for the first time since the hack and the FTX implosion. AXS of Axie Infinity records a solid gain of 23.83% and sits at $8.28 at the time of writing. So, how is Axie Infinity still hanging around and showing signs of resurgence?
Axie Infinity: What to Expect in 2023 and Beyond
The speculation or prediction here is not financial advice for our readers. The play-to-earn gaming industry is only four years old and still a toddler when compared to the traditional gaming space. Sky Mavis believes that it has learned a lot from its recent challenges with blockchain projects. It will introduce beneficial changes to its new blockchain project, Axie Origins. Axie Origins has already seen over a million downloads in its early days. Instead of breeding Axies, players will be able to earn cryptocurrency by collecting and trading charms and amulets. Moreover, Sky Mavis also plans to launch a metaverse where users will have the opportunity to own digital lands. The idea is to integrate the AXS token into all projects.
But, with so many big names like Ubisoft and other Korean gaming giants coming into blockchain gaming, Axie Infinity will no longer remain at the top given its tedious gameplay. So, Axie needs to focus on the gameplay part if it wants to stay important in the Web3 gaming community. However, one thing is for sure: Axie Infinity isn’t going to die easily, as it has strong backing. It will surely survive the crypto-winter.