An in-depth look at the mechanics behind Axie Infinity and the ramifications of the ~$620M hack on players and the game, as Sky Mavis plots its next steps
Over the course of his life, Alejo Lopez de Armentia has played video games for a variety of reasons. Tweets: @caseynewton , @joshuabrustein , @joshuabrustein , @joshuabrustein , @thedextriarchy , @thedextriarchy , @thedextriarchy , @felixgillette , @matpiscatella , @carnage4life , @alexhern , @carnage4life , @joshuabrustein , @rhjameson , and @cecianasta Tweets: Casey Newton / @caseynewton : RIP “play to earn” games (2021-2022) Great feature on Axie Infinity from @joshuabrustein https://www.bloomberg.com/... https://twitter.com/... Joshua Brustein / @joshuabrustein : Now that no one's making money, they also play down the idea of making money. The Axie white paper has even dropped its prominent reference to “play-to-earn,” replacing it with the not-as-catchy alternative “play-and-earn.” 10/12 Joshua Brustein / @joshuabrustein : The company says 20% of players can make money, but that people's should mostly be playing to have fun. But, as one player put it to me, “when I want to play games for fun, I play real games.” 11/12 Joshua Brustein / @joshuabrustein : Axie's problem is that it's always been a speculative tool wrapped in rhetoric about fun and community. The developers want it to go back to being just a game, when most players never saw it as a game in the first place. When the earning stops, the playing stops. 12/12 Adi Robertson / @thedextriarchy : honestly not sure how the marketplace economics are supposed to be working here https://twitter.com/... Adi Robertson / @thedextriarchy : Granted, the fact that its payment bridge is still closed puts a bit of a damper on the whole economic side of the game! It's possible the focus will change if they (supposedly in mid-June) reopen it. Adi Robertson / @thedextriarchy : Nice time for a @joshuabrustein update on Axie Infinity, which is apparently threading a weird needle of stringing its crypto audience along with stuff like NFT land while also trying not to be a crypto game https://www.bloomberg.com/... Felix Gillette / @felixgillette : great, disturbing story by @joshuabrustein about the rise and fall of Axie Infinity, which backers hyped “as a new kind of economic phenomenon: the ‘play-to-earn’ video game” https://www.bloomberg.com/... Mat Piscatella / @matpiscatella : “When I want to play games for fun, I play real games” Helluva article showcasing everything that can go wrong with play-to-earn. https://www.bloomberg.com/... Dare Obasanjo / @carnage4life : Another hit crypto investment from a16z. https://www.theblockcrypto.com/ ... @alexhern : It remains frustrating that saying “this will never work” in 2021 got you marked out as a crypto skeptic, but saying “oh! What a surprise, this didn't work!” in 2022 somehow doesn't get you marked out as a rube https://twitter.com/... Dare Obasanjo / @carnage4life : Axie Infinity made $988,400 in revenue last week which is a far cry from $215 million/week in August of 2021. The poster child for play-to-earn games had a Ponzi structure where people paid $100+ join then grind for cash has collapsed as I predicted. https://www.bloomberg.com/... Joshua Brustein / @joshuabrustein : I wrote this article about Axie Infinity, the most famous “play-to-earn” video game. Tl:dr version: it was not a good way for most people to earn money, and the developers now say earning money was never actually the point, anyway. 1/12 https://www.bloomberg.com/... Robert Jameson / @rhjameson : Axie Infinity's vision of a “play-to-earn” video game has crumbled https://www.bloomberg.com/... via @BW @joshuabrustein Cecilia D'Anastasio / @cecianasta : This week's @BW is full of bangers. @joshuabrustein wrote exactly the Axie Infinity story we needed right now—a deeply reported piece on Axie's PR pivot to “fun” and what Axie's troubles say about crypto optimism. Also, peep that fantastic art: https://www.bloomberg.com/...
Context & Ripple Effects
Axie Infinity’s rapid expansion had already drawn scrutiny over whether its economy could sustain itself: the game’s sharp user growth coincided with analyst doubts, while NFT “managers” depended on continuously recruiting players to generate returns.
The Ronin Bridge breach turns that design question into an operational one. With the bridge closed and marketplace economics disrupted, Sky Mavis is managing both compromised player funds and a model whose token-based earnings were already deteriorating; the subsequent collapse in player earnings makes its shift away from “play-to-earn” more consequential.
First-order effects
- Players whose funds were compromised face a closed payment bridge, while Axie Infinity’s marketplace activity is disrupted.
- Sky Mavis must restore security and access while recasting Axie Infinity around play rather than prominently marketing financial returns.
Second-order effects
- NFT managers, who loaned assets for a share of players’ profits, lose the earnings flow needed to support their arrangements as player returns and token values fall.
- A game economy reliant on new participants faces weaker demand when its financial premise is challenged, compounding the marketplace disruption for Sky Mavis.
Third-order effects
- The episode tests whether crypto games can retain communities after financial incentives recede; models built around asset lending and recurring player earnings face a higher burden to demonstrate durable game demand.
- If developers continue replacing “play-to-earn” messaging with entertainment-first positioning, crypto gaming may separate game engagement from the speculative economics that drove its early growth.
The trend: Crypto games are being forced to prove that player engagement can outlast token incentives, asset-lending structures, and failures in the infrastructure holding player funds.