Updated: Jun 24
Back in January we wrote an article covering “play-to-earn” games: what they are, are they worth investing time and money into, and what on earth is an NFT? The future of NFTs in games looked pretty grim back then, at least for anyone actually into games and not just interested in investment schemes disguised as a Pokémon or Roblox clone. Now, it looks even worse.
For starters, check out the Google Trends page for the search query "NFT." Last year, it was nigh impossible to use the internet without hearing about NFTs. Following the initial burst of hype, however, Google searches for NFTs fell dramatically, by about 75%. Essentially, NFTs failed to retain all of the people who were interested during the boom. There are still more people searching for NFTs than before the spike in interest, but that's likely due to the few who bought in during the period of unavoidable hype.
Other NFT news also indicates a failure to retain the user base who bought in during the initial hype. Sina Estavi, who you may have heard of as the Iranian investor who bought an NFT of the first tweet made by Twitter founder Jack Dorsey for $2.9 million, has had a tough time trying to resell that NFT. He initially listed the NFT for $48 million, saying he would give at least 50 percent of that to charity, his estimate being $25 million. During the window for the auction, only seven total bids were placed, the lowest of which was around $6. The highest bid? Just $280.
Play-to-earn games with NFT integration aren't doing so hot either. Axie Infinity, one of the most popular play-to-earn games, had a massive hack at the end of last month, draining users' wallets for a collective 173,600 Ether, which converted to about $620 million at the time of the breach. Even before the hack, though, Axie Infinity was quickly losing players and value of in-game items.
Daily active players of Axie Infinity prior to the hack (credit: Bloomberg) and value chart of the AXS token which supports the Axie Infinity economy
Following balance changes to the in-game economy, players lost the ability to generate cryptocurrency tokens via many of the activities, decreasing income for players across the board. These changes needed to be made to combat the absurd amount of inflation that the Axie economy encountered. The price of SLP, another token that supports the game's economy, crashed from $.40 to $.01 in a matter of months.
However, the changes also drove away a lot of players, reducing the number of potential contributors to the game's economy, and in turn drove down the prices of in-game items. When Axie Infinity was at its prime, the cheapest Axies were priced at around $300, but now Axies sell for as low as $17. That's great news for anybody who just wants to buy in and play, but pretty bad news for all the people claiming that your NFTs are investments that help you get rich while gaming.