In his Manila bedroom, Dominic Lumabi plays the computer pitting his puffer-like creature against other users. But he’s not just doing it for fun, he’s also earning crypto to support his family during the pandemic.
His source of income is Axie Infinity, a blockchain-based video game in which users enter to play and whose popularity has skyrocketed in countries like the Philippines, where the pandemic destroyed the economy and forced many to be at home.
Its followers, its financial backers and its creators, the Vietnamese firm Sky Mavis, say it is a revolutionary step towards the future of the Internet.
Critics warn that the game is “a house of cards” and equate it to a pyramid scheme fueled by popularity and speculation.
“At first I was skeptical because I thought it was a Ponzi scheme,” says Lumabi, 26, who started gambling in June after losing his job at an advertising firm and a failed foray into online sales.
Some 35% of Axie Infinity’s traffic and the largest percentage of its 2.5 million daily active users comes from the Philippines, where high English proficiency, strong gaming culture and widespread phone use fueled its popularity, Sky Mavis said. .
In the game, users engage in battles using their puffer fish (Axies) and are rewarded with Soft Love Potions (SLP) that can be exchanged for cryptocurrencies or cash, or even invested in the colorful virtual world of the Lunacia game.
Lumabi plays two hours a day in the small house he shares with his parents and four sisters. He earns between 8,000 and 10,000 pesos a month (US$155 and US$195), almost half of what she earns from his current job as a content moderator working nine-hour night shifts.
Axie Infinity’s income has been used to pay for his sister’s college, food and bills, expenses that his father’s electrician business cannot afford.
The pandemic is the perfect environment for this game to attract users of all kinds, says Leah Callon-Butler, a blockchain consultant in the Philippines.
“They can sit at home, protected from the virus, and play a video game and make money from it,” he explains. But the thing has a trick.
rent an axie
To play a match, users must first purchase three Axies. Each Axie is an NFT (Non-Fungible Token). Like NFT art pieces, these tokens are stored on the blockchain in a digital record that cannot be tampered with.
These digital puffers can be bought, sold or rented to other players. Their owners can breed them to spawn new Axies that generate more value.
At the height of the game’s popularity a year ago, a starter Axies team could cost hundreds of dollars, far out of reach for many players in poor countries.
When AFP accessed the video game store on February 9, the cheapest pet was US$37, which put the minimum starting price at US$111.
But having better Axies gives you more chances to win battles and rewards that can be monetized. For this reason, some players with more potential create scholarships and lend their Axies in exchange for a percentage of the income that can reach 30%.
“We equip players with the assets they need to generate income for themselves,” explains Luis Buenaventura, who runs Yield Guild Games in the Philippines, one of the many companies offering scholarships. “In exchange for that, we ask for 10% of your profits,” he adds.
His company has 8,000 “scholars” and another 60,000 on the waiting list. Most of his players are in their twenties and live in households earning less than $400 a month. For them, Axie’s $200 a month income is “life changing.”
“House of cards”
Sky Mavis earns income through Axies “breeding” and shop fees. So far, the game has generated more than $1.2 billion for them, attracting wealthy promoters such as US millionaire Mark Cuban.
But industry analysts warn that the business model is not sustainable because it needs new players to keep the money flowing.
Jonathan Teplitsky of blockchain firm Horizen Labs warns that most “play-to-earn” games are “houses of cards,” fueled by “hype and price gouging.”
“The whole system works fine as long as the Axie company has money and is willing to feed a huge marketing machine,” he said.
Sky Mavis co-founder and chief executive Trung Nguyen said Axie Infinity was “not a zero-sum game.” “There are a lot of other things other than monetary value that people can get out of the game,” he defended.
But in recent months, the tokens users earn in-game have experienced the same volatility as many cryptocurrencies.
Last year, the price of SLP potions skyrocketed from 3.5 cents on April 26 to 36.5 cents on May 2, more than 900% in less than a week. At the end of last January they had fallen to one cent.
Lumabi’s income has dropped by half since he started playing, but he trusts the game. He recently bought two Axies kits for his girlfriend and one of his sisters and turned them into woodcocks of his.
“As long as I can earn a hundred or a thousand pesos a month, my perspective is that there is still a benefit. It’s another source of income,” she states.
Source: Gestion
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