Axie Infinity: Building in a Bear Market - What the Media Misses
Addressing misleading narratives in the media around Axie Infinity
I’ve read quite a few negative pieces around Axie Infinity lately. Of course, as we enter a bear market these articles are expected, but internally the energy is more lively than ever and we are hiring. We were born in a brutal bear market and will continue to build through this one.
I normally do not write responses to articles written about Axie as it takes my attention away from what truly matters — building products for our community. However, with the strong negative bias in recent articles, I feel compelled to tell our side of the story where I have seen inaccuracies and misleading conclusions.
Key Points
Articles paint a very incomplete picture by deconstructing our game and ecosystem while we are in the middle of shifting from Axie Infinity Classic to Origin, and are only in the early access soft launch phase for Origin.
Sky Mavis is aware of economic imbalances. That is a major area Origin was built to bring balance to with the introduction of more ways for players to spend on things they value. It will evolve the Axie Infinity model so it is not player growth-dependent.
As we transition from a “Play-to-Earn” narrative to the more sustainable “Play-and-Earn”, some players will leave, core believers will stay, and we have many ways to grow in the future off the strong core base.
Sky Mavis as a company is thriving. We have 10 years of runway, 150 employees, and are still hiring.
Obtaining distribution of Axie Infinity Origin into the app stores is feasible and will be a major priority after full launch.
Land will have asymmetric gameplay that allows for a full and unique experience for both Land Owner and Non-Land Owner players, with Land Owners reaping benefits from activities from all players. It is structured so that properties of scarce Land will not limit the game’s growth.
The Builders Program is not meant for large professional game studios, but to support our community in unleashing their creativity and passion. We have separate initiatives for partnering with large game studios. The program is a pioneer in allowing anyone to earn an un-capped revenue from leveraging a globally recognized game IP.
The future is bright and we will continue working towards a world where games allow for ownership, community co-creation, and aligned incentives across all stakeholders.
A Deconstruction while we are In Construction
The first call-out is that many of these articles are being written in the middle of our shift from Axie Infinity Classic to Origin. They paint a very incomplete picture by deconstructing and evaluating the current state of the game and ecosystem. Origin is in Early Access soft launch with many features still not built and many areas we are actively improving. The entire crafting system and token economy have not been added yet. It is very unusual to do deep-dive deconstructions and make strong conclusions about games in this state as so much of it can —and will— change, and affect the overall ecosystem and economy.
The Axie Infinity Economy
At Sky Mavis, we are well aware that players and volume within the Axie Infinity ecosystem are declining due to imbalances in the Axie Infinity game design and the larger market downtrend. Articles assert that the game will not be sustainable because it is growth dependent, however, that is exactly an area Origin will solve through new systems that are in the development pipeline. There is an assumption that because the economy has previously been player-growth dependent we will always be that way, but that is not the case with Axie Infinity as we begin to roll out more sources and sinks. There are many dedicated players in the ecosystem who are ready and willing to invest in the game in order to climb the leaderboard or express themselves with cosmetics — we simply have not provided these avenues for players yet.
Play-to-Earn to Play-and-Earn Transition
Axie Infinity is in a major transition period as we evolve into a more sustainable model and narrative across the game. Articles consistently emphasize that Axie Infinity is doomed due to token prices, lack of ability for players to earn, and active player decline. However, this has all happened before in previous bear market cycles with Axie Infinity and we’re still standing and stronger than ever.
During this period, it is unfortunate but expected that many players who may not be aligned with a more sustainable model will stop playing the game, leaving us with a stronger core of players who truly understand, enjoy, and believe in the game and mission. We have accepted this and we can grow from there. There continues to be scores of players who love our game and value ownership of their assets.
Another point is that we haven’t put any substantial effort into growth yet since we are still in Early Launch for Origin. The historical word-of-mouth that has driven growth for Axie Infinity has been phenomenal but there is still an entire toolkit of growth tactics we haven’t touched from performance advertising to influencer marketing. Again, due to these articles making conclusions based on a work-in-progress, it asserts that the decline in players will just continue indefinitely.
The game still exists with major improvements rolling out regularly, and we will continue to come out with more games that apply all of the learnings we’ve had over time. The narrative that we are in an existential state and running out of time is false.
Many Years to Build
To further expand on that, many articles mention that due to the hack on Ronin, if the funds are not recovered Sky Mavis will have no cash reserves left. Given our funding raises, balance sheets, and current financial health, we currently have many years of runway to continue to build out more amazing Axie and Ronin experiences for our community. We have over 150 employees and are hiring more here.
In addition, all users’ funds from the bridge hack have been reimbursed and the bridge reopened on June 28th.
Direction for Distribution
Most articles accurately point out that Origin is currently available via direct download on desktop via Mavis Hub, or APK / Testflight on Android / iOS. However, they paint a picture that we simply cannot be distributed on any major game stores. There are many other blockchain games now on the iOS and Android app stores and we have full and detailed plans to update Origin into a state where it can be approved and distributed on mobile via those app stores. App store availability will be a major priority once Origin is fully launched.
The Asymmetric Gameplay of Land
Regarding Land, articles claim that our primary value proposition for Land was simply that its value would go up over time. The value and purpose of Land was never indicated to be an investment that will increase in monetary value. The value proposition was always that we would create a novel game on Land for players that uniquely utilizes blockchain and tokens as part of its gameplay, with UGC (user-generated content) being a component in the future.
A core argument against our Land game and various other games with Land, is that an inevitable Land crisis will happen because the Land is scarce, required for resource production, and gains value from its particular location. The conclusion drawn is that due to these attributes, speculators who don’t actually use the Land will buy them all up. The Lands will remain underdeveloped and unusable, while their prices become too high, causing stagnation to the economy and limiting future player growth.
This conclusion doesn't necessarily need to be the case. There is much to be figured out still, but here are some nuances and thinking around our Land game that we’ve been discussing with various members in our Land community (none of this is decided on, they have just been open discussions):
Land Owners have to play the game and make their plots productive to gain value out of them
If a Land Owner does not play the game for an extended period of time other players will potentially be able to use the plot’s resources
There will be ways for Land Owners to delegate their Land to Managers to help manage their Land
Non-Land Owner players will have asymmetric gameplay built in the same world that allows for meaningful interactions and collaboration with Land Owners, but they never need to become a Land Owner if they do not choose to. They can continue to progress and play a fully immersive and complete game without owning Land. Simultaneously, the systems will be structured where the more Non-Land Owner players there are, the more Land Owners will benefit as well if they are actively playing.
The overall game for Land Owners will simply be different and unique than the game for non-Land Owners. We are building the game from the ground up to cater to different types of players in a way where every player can enjoy and be excited about their experience in the game. This type of asymmetric gameplay system is new and will have complex implications with challenges we may not have seen before. We understand some people may be skeptical. However, we are constantly covering new ground in everything we do at Sky Mavis and we’ll push the envelope even if it means making some mistakes and having naysayers try to tear us down along the way.
The one other point I’ll make is around UGC. I agree that if a game is centered around UGC to create value then severely limiting or taxing the people that can participate in it via scarce Land assets could be detrimental to the ecosystem. However, our Land game is not just an open-world that depends on UGC for content. We are creating a full game with content for everyone to play. No UGC required. With that said, in the future we do want to allow for UGC in a way that is additive and accessible that creates new value in the game. UGC will not be restricted to only people who own Land, however the system will be structured in a way where Land Owners always benefit from new value being created if they are actively playing as well.
Rewarding Our Community Builders
Analyses of our Builders Program may be some of the most misleading of all. There are constant false comparisons made while conveniently ignoring the clarity we’ve provided in the same blog posts that are quoted in various articles.
The first point that we’ve been explicit about is that this program was designed to help support Axie Infinity community members who want to try building projects and add value to the ecosystem. It is not a professional game studios investment program. We have stated here:
“We also wanted to be clear that although we encourage and support the community in experimenting and creating all sorts of games, we will also simultaneously be looking to invest in professional game developers to produce Axie Infinity experiences.”
Articles go on to elaborate on how much experienced professional developers need to be paid, how much other game platforms invest into professional game studios, and so on. Many of our Builders have not created a company, product, or game before from scratch. They are passionate about creating new value for our community and we are excited to support them and allow them to use the Axie Infinity IP regardless of their level of professional experience. We believe in them. Teams range from those who are doing it as a side-project outside of their full-time job to those who are putting more serious time and effort into it.
We have an entire different business unit focused on investing in large and experienced professional game development studios and they have talked to hundreds of developers, with plans to invest millions of dollars into future partnerships.
The second point that is often glossed over is the fact that we are allowing any community members to create games that generate uncapped revenue using the Axie Infinity IP which no other globally recognized game IP has ever done. I am not saying that the Axie Infinity brand is anywhere close to some of the big brands in gaming currently, however where have you seen a major game IP ever give freedom for anyone in their community to use it and generate revenue off of it without taking legal action? This also isn’t Roblox where people can create games within the platform but have no recognizable IP to lean on. In a platform like that, creators either end up trying to discreetly copy popular IP out there so their game looks attractive, or have to invent their own and drive new interest in it which is extremely difficult. And yes, with this freedom to use our IP we have to have protections and guardrails in place so that the ecosystem and developers will both gain value without experiencing abuse. We outlined this further in our post here:
“In standard game intellectual property (IP) licensing, developers would need to pay millions of dollars a year to the IP holder to be allowed to use it at all. On top of that there would be significant revenue splits that go directly to the IP holder as well. In our case, we are completely removing the multi-million dollar barrier to entry to use the Axie Infinity IP, as well as having the revenue split go to the Treasury (which of course is owned by the Community) instead of Sky Mavis.”
In fact, we did talk to people who specialize and have worked on countless IP licensing deals in the games space. They’ve indicated this structure is extremely generous and it actually seems risky for Axie Infinity to give such open freedom for its community members to use its IP. They’ve indicated it is especially fair given participants do not necessarily need to have any experience or have made games before. We are pushing the envelope with the Builders Program and will continue to lean into programs like this that are focused on raising up our community.
Axies Are Your Ticket to Infinite Experiences
We always say that our players' Axies will unlock infinite experiences for them. Some articles state that this is unsustainable since players don’t need to spend again once they get their Axies. The simple answer is that this won’t be true in Origin and future games. Why is there an assumption that just because players use their NFTs to play a game they cannot or will not spend on anything else in the game?
I’m 100% confident that we’ll see tons of players using SLP to craft Charms and Runes in Origin, that alone makes this statement void. We also plan to release other features like Cosmetics and Part Upgrades, which are highly requested by the community.
The Future of Ronin
Finally, there are constant assertions that Ronin and Mavis Hub will fail due to player decline. I have already gone over all of our plans and thinking in terms of player growth in the “Play-to-Earn to Play-and-Earn Transition” so I won’t repeat myself.
The only other point I’ll make is that we also have ample funds to invest in studios to develop world-class games on Ronin, and we’re actively forming those partnerships.
The Hard Path
We expect many more people to kick us while the market is down. It’s easy to write sensationalist titles and show downtrend charts; it’s hard to build a sustainable product that creates real value for millions of people. The team has made mistakes in the past, has owned up to them, and has been all ears on how to get better. Anyone who has worked on, or is working on, games knows how hard it is, and I hope everyone in the industry can focus on lifting each other up, being constructive, and rallying together, especially during hard times.
While positive or negative reports can be published on Axie and its progress, one of the greatest sources of information occurs in the Axie Infinity Discord where team members and mods are always engaging and answering questions, as well as Axie Infinity social media accounts such as Twitter. I encourage everyone to join, experience, and engage in these channels.
At Sky Mavis, we believe in a world where games allow for ownership, community co-creation, and aligned incentives across all stakeholders. We’re just in the first inning of making this happen. The future is bright for web3 gaming and we have experienced first hand how powerful the flywheel effect can be. Now is the time to make sustainable models and better games, relying on lessons learned from actually doing the work, not looking at it as an outsider.
I will end by giving a shoutout and showing some thoughts from some of our awesome community members (Sorry to all the people I missed, this is in no way all encompassing!!). Thank you for sticking with us through thick and thin! Let’s keep building.
