Published on: 08/04/2022

Axie Infinity, other blockchain games losing players, per report

Coin Desk has reported that NFT and crypto games are losing their players. These include Axie Infinity, The Sandbox, and Decentraland, who all saw the number of their players plummet by 30 percent, 29 percent, and 15 percent, respectively, over the same time period. The report says the values of the games had been dropping since they were kicked off Steam.

Even without the drops, however, these blockchain games’ peak player numbers had never even been close to that of top games on Steam and the Epic Game Store, despite the large investments they received from venture capital firms. Moreover, Axie Infinity recently saw a mass exodus out of the game following a hacker attack that cost them over $625 million in addition to having the number of its player decreasing since October 2021.

That being said, the daily user number for a game as such might also be misleading. While some of these players are actual players, there could also be “employees of guilds playing the game to earn yield for investors”, Coin Desk explained.

“There is currently no organic engagement that retains players in the game, unlike traditional games like Fortnite, GTA, Candy Crush, where players are willing to pay to keep playing,” blockchain gaming analyst DeFi Vader wrote when discussing Axie Infinity.

Problems with blockchain games

The main challenge faced by blockchain games in entering the mainstream gaming market is the perception that NFT integration would result in pay-to-win situations.

“First, the ability to purchase NFTs or in-game currency effectively creates pay-to-win game mechanics, a quality that most major franchises and successful games avoid,” Mason Nystrom of crypto research firm Messari wrote in another report.

Blockchain games are also prone to cyber attacks, accentuated by the recent heist experienced by Axie Infinity. In 2021, the game recorded $3.5 billion worth of NFT transactions or around two-thirds of all NFTs transacted in the whole blockchain gaming industry, analytics firm NonFungible reported.

The game also saw an explosion in popularity in developing countries such as the Philippines and Ghana, where players earn more than the local minimum wage.

Sadly, the game is currently being abandoned by its players following a recent attack on Ronin, the blockchain underlying the game, in which $625 million worth of cryptocurrency was stolen.

Sky Mavis, the developer team behind the game, said the hacker compromises the network nodes that validate transfers to and from Ronin by using hacked private security keys, allowing the attacker to withdraw a huge amount of Ethereum and USDC quietly. The transfer was discovered almost one week after the incident after a user made a withdrawal attempt of 5,000 Ethereum through the bridge.

Many new players have been locked out of the game due to the freezing of withdrawals and deposits as a result of the attack. Sky Mavis blamed the attack on a shortcut the company took in November 2021 to relieve an “immense user load” on its network due to Axie Infinity gaining sudden popularity in the Philippines and other countries, with players relying on the game as their main source of income.

Despite the shortcut being discontinued in December last year, the permissions that allowed it to be taken were not revoked. This led to the hacker being able to compromise the system’s validator nodes. The attacker also used the security hole to compromise another validator node that was managed by the community-owned Axie DAO.

At that point, five of the nine validator nodes had been compromised, the hacker then was able to withdraw however many crypto assets he wanted.