If I told you that a 75-year-old couple in the Philippines is paying for their retirement by playing a mobile game that is a hybrid cross of Pokémon and Tamagotchi, you’d probably have to believe me because it’s just too left field to make up.
Well, you’d be right, and if the future of gaming, crypto or eCommerce are of any interest to you, then I’d highly recommend you take 18 minutes this lunchtime to watch a mini-documentary that tells the story of the residents of Cabanatuan City in Central Philippines and their new career paths in the virtual world of "Axie Infinity".
But it’s not just the residents of Cabanatuan that are going crazy for Axie, I recently mentioned Axie in conversation with an old friend who works in property development at a wedding only to see his eyes light up and reply “Oh my god you know about Axie!? I’m obsessed, my wife has had to ban me from checking it so often, do you own any?” This is where I realised that Axie was more than just an anecdote.
So, what the hell is Axie Infinity?
Axie is part of a new model for monetisation in gaming built on the blockchain called "Play to Earn". At the risk of getting too deep into the weeds of NFT’s, cryptocurrencies and the metaverse and exposing the limitations of my knowledge, I’ll use a high-level analogy to explain Axie that everyone born before the 2000’s hopefully can relate to: Pokémon.
So, imagine the virtual world of Pokémon existed online and there actually was only 150 Pokémon (total) in existence. Instead of going down to see Professor Oak, to start playing the game, you need to pay US$200 to buy yourself a Pikachu.
Now imagine that every time you battle another Pokémon trainer and win, you win points that are attached to your Pokémon, think of it as virtual prize money. Only in this world you can exchange your Poke prize money for ethereum, which can then be exchanged for cold hard cash.
Now finally, imagine that every few weeks more Pokémon are "digitally bred", all paid for by the players, putting more cash into the ecosystem. Players can trade, breed, and sell Pokémon between each other just like the original game.
All of this is the basic framework of the "Play-to-Earn" model that Axie represents. Each Axie, which is a cute little monster not unlike the Pikachu’s and Charizard’s we all grew up with, is an NFT so any currency it earns in-game is encrypted to the Axie through a blockchain smart contract. In other words, the more you play the game, the more valuable your Axie becomes and the more ethereum you can trade it for, ultimately leading to higher real cash value.
Axis sky-rocketed in 2021
Is Axie just another boom or bust crypto trend I won’t be reading about by next year?
The short answer is, like anything in crypto, we don’t know. But the key difference with Axie is that it’s not just another way for crypto heads to make more money, this is a pathway into learning about cryptocurrency driven by the player’s motivation to lift themselves out of poverty. “We believe this is the key to unlocking crypto adoption at scale," said Anil Lulla, COO of NY based blockchain investor group Delphi Digital.
But more importantly, for brands and marketers operating in more mainstream ecosystems, Axie represents a completely new realisation of community mentality. As with every world built on the blockchain, or new crypto coin launched, Axie’s story is about decentralisation. It is about a group of like-minded peers creating an economic structure from which every player can benefit not just the original creator. In the words of entrepreneur Mark Cuban: “The major appeal of Axie is that everyone gets a share of the earnings."
This model of shared ownership is something that will resonate with any brand marketer searching for new and innovative ways to launch a product.
The brands that have a true network effect in today’s landscape allow their fans and customers to become their front-line salespeople.
They encourage them to take control of the brand’s narrative, to not just be consumers but be sellers and creators too. This is the foundation of social commerce and a field in which Nike continues to be the gold standard with their community marketing and now in-house social commerce app soon to drop.
Harnessing the hustler culture
Axie Infinity is only one of many games that make up the growing metaverse, a network of virtual worlds where decentralised economies are thriving on blockchain rails. So, although it has cult status, the reasons for its engagement go way beyond slick gameplay and addictive storylines. Whether players are looking for economic stability in post-pandemic recovery or the next investment to complete their portfolio, play-to-earn is a new model for making money that is accessible to anyone, which means it is only a matter of time until it hits the mainstream.
So as with any new monetisation model, brands must think about how to embed themselves within the value chain long term, not just tactical activations that create short term buzz. Don’t just see the metaverse as a new acquisition platform to target gamers. Ask yourself the question: How can play-to-earn help my existing fans or community get more value back from being a customer? This is the way to align to the spirit of shared ownership that fuels the power of the games such as Axie.
The writer is Mark Bellamy, regional planning lead at Aiken Digital.