Token's Price Drop Illustrates Challenge in Play-to-Earn Gaming (axios.com) 30
The long decline in the price of Axie Infinity's Smooth Love Potion (SLP) token illustrates the challenge of play-to-earn (P2E) gaming: players need more than a way to earn some random token, the token needs mechanics that enable it to hold value. From a report: P2E worked great, particularly with one game, Axie Infinity (whose treasury clocked $1.3 billion in revenue last year), until profits took a dive in early December that it has never recovered from, as Token Terminal shows. The "Smooth Love Potion" (SLP) token is the fuel that Axie Infinity runs on.
To access the game, players need once valuable NFTs called Axies. Axie owners can breed more Axies with their Axies, but they need to spend SLP to do so. Users spend SLP in the game and it gets destroyed, decreasing the supply. That's supposed to help maintain the price, but there's been too much earning and not enough burning. The token has been in a long fall since the peak of its strength last July, because too few players are using SLP to make more Axies, analytics firm Naavik contends.
To access the game, players need once valuable NFTs called Axies. Axie owners can breed more Axies with their Axies, but they need to spend SLP to do so. Users spend SLP in the game and it gets destroyed, decreasing the supply. That's supposed to help maintain the price, but there's been too much earning and not enough burning. The token has been in a long fall since the peak of its strength last July, because too few players are using SLP to make more Axies, analytics firm Naavik contends.
Huh? (Score:5, Funny)
To access the game, players need once valuable NFTs called Axies. Axie owners can breed more Axies with their Axies, but they need to spend SLP to do so. Users spend SLP in the game and it gets destroyed, decreasing the supply.
Congratulations, you've just made less sense than a Rick and Morty inter-dimensional cable skit.
Re: (Score:2)
Deflation leads to hoarding (Score:3)
Re: (Score:2)
As far as I know, having read some about this game, those players don't actually get the tokens anyway. They are being paid by people who own the account to play the game. The account owner converts the tokens to another crypto or to USD.
Hard to see how it's a game really. Players playing it for minimum wage to feed themselves rather than for entertainment. Account owners just in it for the $
Re: (Score:3)
Deflation leading to hoarding of currency
That is the exact opposite of what is happening here. The value of the currency is declining (i.e., inflation, not deflation) and rather than hoarding, the problem is the market is flooded.
Re: (Score:2)
Re: (Score:2)
Re:Deflation leads to hoarding (Score:4, Interesting)
Yep. And it also heavily skews the rewards towards those that have and hold, rather than those that earn and spend. So the rich get more and the ones that aren't rich yet have to climb an ever steeper mountain. And yet some people want cryptocurrencies to have this property. Well, there's a reason we don't want it. It kills the economy.
An older example is the hoarding of gold by the church in the Middle Ages. The most positive influence here were the Vikings who looted those churches and then put the gold back in circulation, creating economic activity. A bit haphazard, but certainly better than hoarding it.
Re: (Score:2)
Re: (Score:2)
You just described MONEY
Re: (Score:2)
Deflation leading to hoarding of currency rather than spending ("earn instead of burn"), leading to a dropoff in economic activity, is a classic pattern in economics.
Except that it's not true, has never been true, and flies in the face of the entire Industrial Revolution, which was massively deflationary from the start. Indeed, Abraham Derby's patent for his mass-produced iron stove pot specifically sings the benefits of deflation. Deflation makes people feel optimistic and more relaxed about spending money today. 40 years of consumer electronics have demonstrated that to the point that anyone saying otherwise is clearly a buffoon and a time-waster.
Similarly, inflation
Re: (Score:2)
Re: (Score:2)
The only major period of deflation in the West during the 20th century was during the first few years of the Great Depression, which seems to lend some credence to this particular economic idea.
The great depression was a complicated beast and not the least factor was the massive levels of corruption in the US banking system. That, combined with deflation, lead to bank failures which then had knock-on effects. But there were other issues too.
In general, deflation is a good thing in the same way that a pay rise is a good thing; they are two ways of looking at the same result - the ability to buy more. Historically, people who can afford more tend to buy more and that stimulates the economy as well a
Re: (Score:2)
Re: (Score:2)
The massive increase in production caused by new methods far outweighed any effects of changes in banking. That increase in production had various deflationary effects: good ones whereby wealth was made available to more people, but also bad one such as the increase of unemployment in many traditional sectors.
The key error most economists make (assuming that they care) is that they put the cart before the horse by saying that deflation must be avoided in its own right. Deflation is just an effect of other t
Re: (Score:2)
Solution: Kill more Axies (Score:2)
Re: (Score:2)
Kill more Axies
Indeed, they've seem to have ignored a fundamental tactic: Why make more Axies? You've given one reason. But the real question is why choose SLP over Axies? Presumably, turning-up is something the players will do anyway, guaranteeing more SLP, while making Axies has lost its appeal. One sees this in 'living' games: Where the goal is calculating how the latest expansion pack changes the weaknesses and strengths of available maneouvres. When the game runs out of expansion packs, everyone leaves.
What? (Score:2)
Axie Infinity? Never heard of it.
Smooth Love Potion? Never heard of it.
To access the game, players need once valuable NFTs called Axies
So it's actually pay-to-play, not play-to-earn?
Re:What? (Score:4, Interesting)
Axie Infinity? Never heard of it.
There are national economies based on it so that you have never heard of it says more about you than about the game.
My company has an office in Quezon City, and we've had employees quit their day job to focus on playing Axie Infinity for profit.
So it's actually pay-to-play, not play-to-earn?
It starts as pay-to-play and then transitions to play-to-earn as you build up resources.
Since the later payouts are dependent on an inflow of new players, it is a pyramid scheme.
Re: (Score:2)
There are national economies based on it so that you have never heard of it says more about you than about the game.
Sure, and Liechtenstein is a country, but it's not generally on my radar.
Quezon City
Not going to lie; I had to look that one up.
And I've even been to the Philippines, but it is a big place!
Since the later payouts are dependent on an inflow of new players, it is a pyramid scheme.
We got there in the end. No wonder I've never heard of it.
Re: (Score:2)
WTB [ROJ] (Score:2)
PST!
P2E has been done for decades (Score:2)
Why is this news? P2E has been around for ages.
Eve Online has Plex (2008), World of Warcraft has WoW Token (2015).
Stop monetizing the shit out of games. We just want to play them for fun, not have a second job.
price problem (Score:2)
The issue is the cost of SLP. It might take you 12 weeks or more to earn enough SLP to breed a new Axie. How much is 12 weeks of a person's time worth?
You can buy an Axie right now in the marketplace for way less than the value of 12 weeks of time. Why the fuck would you spend SLP to breed? What else can you do with SLP? Almost nothing, try to flip it at an exchange for cash or some other token.
With a flooded marketplace that has lower prices and nothing productive to do with SLP it no wonder its worthless
Who writes this nonsense? (Score:2)
The token doesn't hold value because there's no longer any value behind it. Duh.