The ultimate goal of video games has always been to have fun. Whether it’s Space Invaders or Sonic or Red Dead Redemption, you hit the start button and do your thing until the game ends – then you probably wipe the sweat off your hands and start over.
But a new class of games is emerging where playing is an investment opportunity – and even potentially a means of making a living. So-called winning games like Axie Infinity and The Sandbox have exploded in popularity recently.
What they have in common with many previous classics is that they include complex economic ecosystems. In the blockbuster Elite of the 1980s, for example, players traveled from planet to planet, trying to increase their credits by buying and selling things like weapons and goods. Or in The Sims life simulation franchise, players buy everything from pizza to homes with Simoleons.
But in those older games, the in-game currency had no real world value. There have also been games like World of Warcraft where a gray market for the exchange of in-game items and characters has grown around them. But the games to be won take that to a whole new level. So how do these games work and where do they go?
To infinity …
The leader of this new space is Axie Infinity, a Pokémon-style game created by Vietnamese developer Sky Mavis. It has some 350,000 daily active users, of which around 40% are in the Philippines, with Venezuela and the United States being the next two largest markets.
The game revolves around cute furry creatures called Axies, which players breed, acquire, train, use for challenges, and battle online. The object of the game is to obtain Small Love Potions (SLP), which can be used to create new Axies which can then be deployed in the game.
SLPs also serve as cryptocurrencies that can be bought and sold on a crypto exchange. The best players would earn 1,500 SLP ($ 435 / £ 317) per day from their Axies, although the price of SLPs against the US dollar is constantly changing. It has globally increased since 2020, so there is an argument to hang on to – or alternatively, sell while all is well.
The axes themselves can be traded in real life on the Axie Marketplace as NFTs (Non-Fungible Tokens). NFTs are digital collectibles that exist on online ledgers called blockchains, and are best known for having recently taken the art world by storm.
In addition to Axies, other in-game items such as real estate, flowers, barrels, and lamps are also tradable as NFTs. These are all bought and sold using ethereum, which is the second largest cryptocurrency after bitcoin.
This is a welcome improvement over predecessors such as World of Warcraft, where trading in gold and game assets took place on unaffiliated auction sites, and was grounds for being banned from the game for a long time. By introducing a dedicated marketplace, NFTs, and blockchain, trading around Axie Infinity and similar games is more secure and means players actually own the items in question.
To get started on Axie Infinity, players must purchase (or borrow) three Axies. They are available from US $ 190 (£ 138), although the current average is around US $ 350, and higher-level, rare, or mystical Axies can sell for a lot more.
The most expensive Axie of all time, a triple mystic called Angel, sold for 300 ETH in late 2020, or around US $ 120,000 at the time. Meanwhile, some in-game real estate cost US $ 1.5 million earlier in 2021. Monthly transaction volumes for all Axie Infinity NFTs currently stand at US $ 170 million.
Finally, there is another cryptocurrency associated with this game called the Axie Infinity Shard (AXS). Investors in AXS have a vote in the governance of the gaming ecosystem and can also use it to get a share of the community’s cash. AXS has also seen an impressive increase recently, about six times higher in recent weeks. It is the largest gaming cryptocurrency on the market.
Besides Axie Infinity, CryptoKitties is another up-and-coming game that has amassed a significant following. In this game, players buy, breed, and trade digital cats using Ethereum. Again, these chats are NFTs, which generate wealth not only for the developers but for the gaming community as well. The most expensive CryptoKitty sold to date, which was called Dragon, was 600 ETH (around US $ 170,000 at the time).
In addition to generating real income for players, up for grabs also create communities where players and creators can meet, share their wisdom, and make deals with each other. A good example of this is The Sandbox, a game similar to Minecraft where players build things and trade with them as NFTs.
This low-key economy is driven by its own cryptocurrency, SAND. One way to do SAND is by selling plots of digital real estate known as LAND, which players can buy for their storefront to share their experiences with visitors around the world. In February alone, the game announced that a record 2,352 plots of land had been sold for a combined $ 2.8 million.
With such interest, big brands see the potential to take a share of this expanding metaverse. For example, The Walking Dead will soon be opening its doors on the platform, allowing players to enter a zombie world within the game, in what Sandbox says is a step towards a “virtual amusement park.” Brands like these are presumably likely to attract a larger audience to the platform.
Now that games like these are possible, it seems likely that they are here to stay. Many games have supported online communities in the past, but by adding the potential for financial gain, money making games will potentially lead to even more prosperous communities in the future. If this corner of the game is new to you, it’s time to start taking a close look.
Drew Cattanach does not work, consult, own stock or receive funding from any company or organization that would benefit from this article, and has not disclosed any relevant affiliation beyond his academic position.