Reflecting on the rise and fall of the blockchain-based game Axie Infinity, executives at marketplace platform Aqua.xyz believe that NFT games can appeal to a wider audience beyond the “degen” or high-volume trader community.
Axie Infinity gained significant attention in 2021 for popularizing the concept of play-to-earn gaming. It is a game where players can collect and breed NFT creatures called Axies, which players can buy, sell and trade on a marketplace. The game’s economy eventually collapsed due to a combination of factors, including high gas fees on the Ethereum blockchain and a decrease in demand for Axies.
In light of Axie Infinity’s fall, Aqua.xyz aims to create Web3 games that are more accessible and casual, allowing players to participate without owning any NFTs. Aqua.xyz designed its marketplace for people who actively play games, and it is not trying to imitate platforms such as OpenSea that attract degens.
Aqua.xyz CEO Sean Ryan and Head of Marketing Alay Joglekar discussed their strategy for Web3 gaming economies during an interview with Decrypt. They addressed the industry’s future after Axie Infinity’s play-to-earn game in 2021 and 2022.
Ryan, who previously worked at Facebook and Sega, said that gaming would be the largest of the Web3 categories.
“Historically, gamers want to go hang out with other gamers. And they want to have a site or service that speaks to them in a way that isn’t just about price,” Ryan said.
He also said that Aqua.xyz’s NFT marketplace, which supports Ethereum and scaling networks Immutable X and Polygon, prioritizes asset qualities over the financial element, as he believes gamers value this aspect the most.
We’re making games! Introducing AQUA Studios 🕹️
A new division of our ecosystem, Studios develops casual games to onboard the masses into web3 with fun game modes & cross-game utility based NFTs.
— AQUA.xyz (@aquadotxyz) March 17, 2023
Embedded marketplace in development
In addition to its gaming platform, Aqua.xyz is currently developing embedded marketplaces for Web3 game developers.
According to Ryan, in the Web3 space, game projects must construct their own marketplaces, a task they are not skilled at. Based on his conversations with 50 to 75 developers over the past six to nine months, many would prefer a third party to manage their marketplace in an embedded fashion rather than having players leave the game to make purchases.
External marketplaces cause player dropoff, which concerns game studios because they want to retain players. Joglekar aims to create a more seamless purchasing process to prevent any loss of interest in the game.
“The fact that you actually push people outside of the game client is probably the biggest rule-breaker in terms of game studios,” Joglekar said. “The number one thing you want is retention.”
Aqua.xyz plans to achieve in-game marketplaces that feel organic to the games by having their team play their clients’ games. According to Joglekar, progression is the most important thing to gamers. Players seek entertainment, not necessarily financial gain.
Re-evaluating NFT games
In early 2022, Axie Infinity suffered another setback when its Ronin sidechain was hacked for $622 million in March 2022. These events caused many developers to re-evaluate the role of trading in NFT games.
Ryan believes the days of financially-driven game designs are over, and it won’t be a popular model anymore shortly. He also sees that early Web3 gaming consisted of non-gamers purchasing and selling assets, but this was not a sustainable approach.
“The early parts of Web3 gaming were, frankly, people who didn’t even play the game—they just bought assets and sold assets. They were degens,” Ryan said.