After shooting to prominence earlier in the year and bringing huge profits to early adopters, earnings for players of blockchain-based game Axie Infinity have dropped below the minimum wage line for most players in the Philippines, according to a recent report by research firm Naavik.
Fast facts
- Using data sourced from the official website of the Department of Labor and Employment of the Philippines, the report found the minimum daily wage in the country was US$7.03. One of the report’s authors, Lars Doucet, released key findings of the report on his personal Twitter account, saying: “After months of incredible growth, the daily earnings of the typical player of Axie Infinity … have fallen below the Philippines’ minimum wage line for all but the high-ranking players, and even they have seen earnings decline since August.”
- Axie Infinity took the crypto world by storm earlier this year with its play-to-earn model of the game, whereby players breed and battle Pokémon-like creatures known as “Axies” — which are also non-fungible tokens — in exchange for the in-game cryptocurrency Smooth Love Potion, or SLP. This token is used in-game to breed further Axies, but can also be traded on cryptocurrency exchanges, hence its value. The game found a strong community of players in many developing economies — particularly in the Philippines, where the local buying power compared to SLP meant they were able to earn significant supplemental income.
- Driven by the increasingly high cost of entry into the games, more experienced players began offering programs known as “scholarships” to new players in which they would lend the required Axies needed to play the game in return for a percentage of any SLP earned. One player Forkast.News spoke with during the height of the game’s surge, who only wished to be identified by his online persona “Porky,” said he was able to earn US$20,000 a month at the time between all of the players he had working for him.
- As Forkast.News reported recently, however, as user growth slowed, concerns have been raised over the long-term viability of the play-to-earn model and therefore players’ ability to continually earn a significant income. While SLP hit its all-time high of US$0.4191 in May during the first surge, it was only trading at US$0.066 at press time, according to data from CoinMarketCap. Some watchers attribute falling prices to existing players generating too much from the tokens to outstrip the demand for new players coming into the game. The game’s developers attempted to address this issue in August by reducing the amount of SLP players earn in game, but with little impact on SLP’s overall price trajectory.
- The Naavik report found that while the total number of daily active users (DAUs) continued to grow in September-October from roughly 1.45 million to 1.95 million users, the rate of growth had continued to decline for the third straight month, and it was this deceleration of growth they identified as the major contributor to the declining price of SLP. “We project that even if DAUs steadily grow, if the pace of new monthly DAU declines then total monthly revenues may also decline (unless the team enacts broader changes),” the authors said in the report.
- The report also identified that 55% of all players are from the Philippines alone, and that 65-70% of their total player base is from the broader Southeast Asia region. The success of the game in the region suggests that Southeast Asia may be a leading contender for the adoption of further crypto-related products, due to its high unbanked populations and relatively little existing financial infrastructure.
