The most popular play-to-earn game, Axie Infinity, is losing stream amid the market downturn. New data on user activity shows that game retention has plummeted to 2021 lows. In October, Axie Infinity averaged about 701,000 monthly users.
In 2021, during the play-to-earn boom, Axie Infinity was averaging nearly 2 million users and was reaching new milestones, with NFT sales amounting to $4 billion. In January 2022, Axie Infinity reported a total of 2.78 million active users.
As the incentives to play Axie Infinity dropped, the game lost much of its support, primarily since it could no longer supply new financial means to its players. In June 2022, the game lost more than 1.2 million players, and the outlook is looking quite grim.
Even as the bear market continues to rage on, Axie Infinity’s game mechanics contributed to the downfall in user retention. As a result, Axie Infinity lost 62% of its player base between September 2021 and 2022 as players continued to give up on the once financially rewarding Web3 game.
The Ronin Network bridge hack, which saw the game get exploited for over $650 million, resulted in a sharp decrease in trust among GameFi users, especially those who lost their funds.
The Play-To-Earn era shift
GameFi has transformed the relationship between games and their users. The switch from free-to-play to play-to-earn resulted in a new gold rush as players were finally rewarded financially for spending the time doing the things they loved.
The gaming industry is expected to reach $320 billion by 2026, and as gamers understand the benefits of GameFi, we could see a potential increase in demand for GameFi. Not only that, but with Web3 just around the corner, GameFi will undoubtedly enter a new hype phase, even though play-to-earn games are losing ground.
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