You know what I like spending my spare time doing? Playing video games. You know what I am doing in the time not defined as "spare"? Exchanging my labor for capital, which I then exchange for goods and services. That spare time is valuable to me, regardless of how I choose to use it, precisely because it is mine; it is the stuff I hold back from bringing to the market. Happily, a bunch of cynical money-extractors have finally come up with a way to tighten this loop, and put that spare time to work. What if you could make money by playing video games, without any of the skill-having or time investment required to make it in esports or streaming? What if you could earn money simply by playing a game?
This is the crux of the appeal of so-called "play-to-earn" games, blockchain-based games that allow players to earn tokens or NFTs through their work in the game, which can then be exchanged for other forms of currency. The pitch is a pretty simple one, and some of the biggest investors and gaming companies in the world are in on it, such as venture capital firm Andreesen-Horowitz, Square Enix, and Serena Williams's husband Alexis Ohanian. As that list of names—as, for that matter, the word "blockchain"—should indicate, "play-to-earn" games stand to be tremendously profitable for those at the top of the food chain; this is already a structural contradiction to the marketing rhetoric that dangles free money in front of players to get them to play, but so much of this marketplace is built on that contradiction that we're just going to have to agree to ignore it. So let's do that, and let us now consider the instructive case of Axie Infinity, one of the most popular play-to-earn games in the world, whose developer is valued at $3 billion.
Axie Infinity, which is definitely not a shameless Pokemon rip-off, is a creature-based arena RPG wherein players breed, train, and battle little cartoon monsters called Axies. Why play some mobile-game-hell looking-ass game when you could simply play actual Pokemon with an emulator? Because Axie Infinity has a money-making mechanism. Players can earn tokens by playing, and can also sell their Axies in the game's marketplace. There are two forms of cryptocurrency associated with the game, Axie Infinity Shards (AXS) and Smooth Love Potions (SLP). The former is the game's "native governance token," which players can earn and sell and maybe someday use to vote on community-wide decisions. Tokens are a key aspect of the facade of decentralization, and this case is no different, as the game's developer Sky Mavis owns 20 percent of all AXS tokens. The Bored Ape Yacht Club's own shady token experiment, where 38 percent of ApeCoin DAO tokens are held by those at the center of power, provides a useful example of how decentralization rhetoric can be put to work in service of centralization.
We haven't even mentioned the most eyebrow-raising aspect of Axie Infinity yet. There are also transaction fees attached to many of the game's earning and cashing-out mechanisms, and players must also pay a couple hundred dollars to even get in the door. As friend of the program Ed Zitron has keenly observed, "'Play-to-earn' is a complete lie—it’s pay-to-play-to-earn." A system where users must buy in to be able to make money and must also pay transaction fees to a central authority to convert something literally called Smooth Love Potions into dollars or Euros or pesos by selling them to other players, who then hope to make money selling them to to other players, is not a decentralized money-making space. It's a, hmm, reverse funnel system. One of the nastier facets of this scheme is that it cloaks itself in such wild and liberatory language. "In five years, you will actually value your time properly," Ohanian said in January. "And instead of being harvested for advertisements, or being fleeced for dollars to buy stupid hammers you don't actually own, you will be playing some on-chain equivalent game that will be just as fun, but you'll actually earn value and you will be the harvester."
This mimics the general tone of crypto-evangelist rhetoric, albeit with some clanks and clunks unique to this corner of that marketplace. Set yourself free, the bag-holders are preaching, by giving me money. No matter what the New York Times tells you, games like Axie Infinity do not really represent a way to make money playing games, but rather a way to generate income for investors and earn a small sliver of the "profits." They represent, in essence, vaguely game-shaped work.
The plurality of Axie Infinity players live in the Philippines, where the money made by grinding the game for eight-plus hours per day goes a lot further. The barrier to entry presents yet another opportunity for a new market: scholarships. In exchange for a 10 percent stake in their future earnings, players can get the start-up costs fronted to them by small-time investors, creating a hierarchy nested within the greater Axie Infinity hierarchy. When one considers the interlocking networks of exploitation that make up the beating heart of games such as Axie Infinity, one wonders why there even needs to be a video game at the center of all this. It is worth noting that, as a game, Axie Infinity looks like shit, seems boring, and is breathtakingly unoriginal, but none of that matters to its user base; they are all only there to make money. One of the most common criticisms of cryptocurrency is that it has no use case, that it is a solution in search of a problem. In this case, what we have is a slapdash mobile game that illustrates how little a use case even matters. The point is the loop.
This past week's Game Developer's Conference in San Francisco was stuffed with "play-to-earn" nonsense. If big-time gaming companies get in on this, perhaps the core gaming experience will be better, though the financial mechanism will be just as exploitative. AAA developers and the like are interested in play-to-earn games because they stand to be incredibly lucrative, with player bases incentivized to keep playing by earning small amounts of money. Where this differs from the already existing practice of stuffing games with microtransactions is that players are generally not required to take part in those microtransactions just to play the game. You do not need to purchase D.Va's cat girl skin to play Overwatch, but you definitely need to buy some Axies to play Axie Infinity.
The other problem here is that the money-making itself takes place on the blockchain and is therefore subject to the violent fluctuations and inherent shadiness of this largely unregulated space. The NFT market is in such a serious slump that some see signs of a bubble finally about to pop. By February, Smooth Love Potions had dropped in value to the point that Axie Infinity developer Sky Mavis acknowledged that they needed to make some dramatic changes to the game's economy in order to avoid "total and permanent economic collapse." You'd have to be naive to think this sort of diminishing returns quandary is unique to this one busted game.
Oh and also, speaking of busts, somehow someone stole $615 million from Sky Mavis today. Oops! In an effort to streamline transactions, Sky Mavis set up a blockchain called the Ronin network in Feb. 2021. The details are nigh-impossible to understand, but the point here is that someone took a shitload of money by exploiting a protocol put in place to make the game's deeply off-putting user experience a little less off-putting. AXS and SLP prices both cratered after news of the hack broke, and everyone is basically shit out of luck here. If the good people at Andreesen-Horowitz or Sky Mavis need to get that money back, perhaps they should think about hopping on their computers and playing some games to earn some money.
