How Axies Infinity got to $100 million revenue in 3 months by serving rural communities (10 min read)
Axies Infinity – an NFT-based game that uses a Play-to-Earn model. It quickly became the most profitable protocol, passing well-known DeFi project such as Pancake Swap by over 7x.
Reached $100M revenue after 3 months of growth – only from around 5% commission!
Strategy & Tools
Axies Infinity History Timeline
- Dec 2017 – Trung Nguyen a Vietnam-based game developer started to work on the game.
- Feb 16, 2018 – Axie presales are opened, raising 900 ETH
- May 2018 – breeding game released
- Oct 2018 – idle battle game released
- Jan 23, 2019 – Land presales are opened – 3200 ETH raised
- Feb 2020 – Ijon Inton stumbled upon an explainer video of Axies and was intrigued by the Play to Earn model. After a week of playing, he made $206 and helped his friends and family to join.
- Aug 26, 2020 – an article about Axies is published on Coindesk, boosting new signups significantly
- May 13, 2021 – a mini-documentary is released about the Filipino players
- May 13, 2021 – the story is picked up by major media outlets, such as CNBC
- Jun 2021 – more and more people learn about the game. The revenue hits $12 million
- Jul 2021 – the frenzy begins as the revenue is on its way to surpass $100 million
Who invented Axie Infinity?
NFT game Axie Infinity has been invented by Trung Nguyen, co-founder of Sky Mavis, and the winner of CoinDesk’s Most Influential 2021.
Starting with a small community
Jeff Zirlin, the growth manager of Axies, said:
The community needs to be small first, to work when it gets really big.
That’s what makes Axie hard to copy -- if you build a competitor now, you’re going to attract the kind of people who want to find the next Axie, not the kind of people who are actually interested in moving gaming forward. They opened the game for some early enthusiasts, and they eventually became the evangelists that did the marketing on later stages.
Axies Infinity Pre-sales
The first users got involved in pre-sales in order to receive the first land and pets.
Blockchain game Axie Vision
Axie Infinity capitalizes on the idea of Metaverse – building a digital world in which you can immerse on multiple levels. The game of buying, trading, and battling with digital pets is just the beginning.
The plan is to add land ownership, mini-games, item crafting, and any other mechanics within the world. This shows how early it is for the game and ensures there’s plenty of time to set yourself up in its universe.
At this point, the game is focused on rewarding players for spending more time in the game and putting more effort to build their position there. As the whitepaper says, this keeps the game grow in a way that is appropriate to the current development stage and grows the whole ecosystem.
To spread Axies throughout their universe, they need to be bred. You can see that breeding is the biggest part of the game now–existing users create new pets and new users have to buy them from them in order to play.
NFT game Axie Infinity – A unique economy
Every game resource and asset is tokenized, so they can be sold to anyone and anywhere on any open, decentralized market. The assets are 100% owned by players and this creates a real money economy.
The market of the NFT game Axies Infinity is designed in a way to focus on growing the P2P economy, rather than selling items in-game. There are two currencies – SLP which is utilitarian and required to breed the pets and AXS which is like a government and its holders collect tax revenues from other operations.
Axie Infinity business model – Growth design
Blockchain game Axies Infinity has been designed with a mature approach to platform’s growth. The first key objective is to grow the amount of users. Once sustaining the growth won’t be as possible, Axies will move to a more long-term plan of bringing external capital to the ecosystem from ads, nonprofit organizations, and government donations and grants.
Axie Infinity Business model
Axies Infinity business model provides the authors with a few revenue streams. There’s 4.25% commission on each trade and a fee when new Axies are bred. Those earnings go to players in 95% as they land in a Community Treasury, now at around $100 million. The holders of AXS have control over the Community Treasury.
Word of Mouth
The game originated in Vietnam and became extremely popular in the region, both in Vietnam and in Phillipines. Ijon Inton, one of the first players in Phillipines was an active crypto investor since 2016 and was intrigued by the Play to Earn model. After making over $200 in a week, he told about the game to his friends and family and helped them set everything up. It quickly became 100 people in his community.
One of the reasons why Axies took off was using crypto market’s seasonality. Every now and then, prices rally to new all-time-highs. They did it when Trung started building the game–CryptoKitties became a large success back then, too, becoming one of the first NFT-based games. After such rallies, usually comes the „crypto winter” which is when the market falls down significantly and many investors back off until the next tick. This is the time when Axies were still developed.
They again boomed with another crypto bull cycle but what’s unique is that even when the markets stood still in 2021, Axies witnessed a mouth-watering growth!
Managing the shortcomings
You can use crypto in a decentralized manner which is a nightmare from the UX perspective of new users or you can trade-off decentralization to the ease of onboarding. That requires crypto key custodians and loses the whole point of using blockchain.
Axies went the hard way and this makes the title’s growth numbers even more astonishing. To ease the onboarding for new users, creators have released a 6-step guide that goes through the whole process of downloading wallets, buying and exchanging Ethereum to Axies and all the stuff that stands in your way to play. It seems that works well as it could be hard to work this growth only in the crypto community.
The nostalgic Pokemon-like graphics are there on purpose. The idea was to introduce crypto to a larger audience through something that’s familiar to them and feels well-known. On top of it, there’s a free economy and ownership that makes the game more innovative.
A place where community gathers
While social media would be the standard go-to strategy, Axies players have been encouraged to gather around Discord, which is already an established social communications platform for players. This is the biggest channel now with over 600,000 members.
A way out?
Despite most of the biggest titles now are Free-to-Play, like Fortnite, in order to play, you need to buy at least 3 Axies–the cheapest can be found for 0,1 ETH, so around $130 at the time of writing. However, you’re not paying the developers and own the pet instead–you can do whatever you want with it. You buy the first Axies on a secondary marketplace, coming from other players, not the developers.
Then, you can complete quests to earn rewards and trade for profit on the market. The game is extremely popular in Phillipines and Vietnam and many players have actually left their jobs–they earned around $5 per day while they can usually make $20 per day while playing the game for a few hours, as it’s quite easy to exchange game tokens to fiat money.
There’s even a Filipino town named Cabantuan City, where the game spread among its inhabitants and allows them to add household income.
Axie Infinity revenue
Axie Infinity business model let the creators reach $1.2 billion annual revenue in 2020, leaving behind other viral games, such as Candy Crush, for example, although the user base of the NFT game Axie Infinity was around 600 thousand at that time.
The tendency is still raging, as between November and December of 2021, Axie Infinity generated $190 million (in the course of just 30 days).
Axie Infinity business model – Scholarship programs
How someone who earns $5 a day gets into the game if he needs to spend around $500? Through a scholarship program, which makes for a part of the Axie Infinity business model. It has been introduced to rent Axies to players and get paid back with a revenue sharing model.
Getting visibility through volumes
Axies tokenomics and approach to token distribution made it skyrocket in prices, which couldn’t fly under the crypto radar. Axies landed on OpenSea NFT market aggregator just below NBA Top Shot, at times even surpassing it, and AXS tokens went high on CoinMarketcap, as the token price and market cap rose exponentially even during a market slowdown.
All that gave the game enough visibility to build curiosity and attract new players.
Is Axie growing – NFT game Axie Infinity growth
As of December 2021, the NFT game Axie Infinity counted more than 8 million players, and the trend is still increasing. Although only about 14% of players buy Axies NFT, and just more than 9% decided to sell their Axies, the game is still on the rage, especially in the Philippines.
The success of the game starts with a nostalgic design that makes the game more familiar, even though the onboarding is not easy for crypto newcomers. Nostalgic themes are often associated with positive feelings, too.
The Law of Diffusion of Innovation
Axies Infinity is a game set up in a very innovative space of blockchain. It attracts early adopters first, and then moves to early majority that once saw it all works, then they tried it.
The MAYA Principle
Innovative products should be created with enough familiarity for easy adoption – hence using familiar designs, but you can’t overcome using crypto wallets and swapping ETH to AXS and so on.
Evolutionary and Social Needs
People’s need of safety is one of the most basic. A game that allows them to stay out of trouble during the pandemic or avoid debt and provide safety to their families falls into that need which is why it is so tempting for players in developing countries.
People go crazy about unpredictable rewards, and that’s all you get by breeding Axies–you never know what’s going to come out of it.
Window of Opportunity
Today, a game like Axies Infinity is a unique experience that aims to create a digital nation with its set of rules, currencies, lands, etc but onboarding for using crypto is extremely high. Here, two things work best for the game – the earnings motivation is enough to look for ways to overcome tough onboarding, and the Play to Earn model makes the players stay.
The brilliant tokenomics focused on user growth is also a major factor for why did the platform took off, but it’s definitely early on. If you plan on building a project around NFT – it seems the trend is far from over.
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