Axie Infinity popularized play-to-earn games, but just like any other title it needed a long-term retention plan. Enter esports. Sky Mavis has been laying the groundwork with its own community since late 2021, but now it is taking more steps to engage the broader esports industry and community. Last week, Axie teamed up with Cloud9, one of North America’s most prominent esports teams, to show the game’s esports potential.
Axie’s esports-focused features
Axie Infinity is a relatively simple game. It plays like a cross between Pokémon and Slay the Spire, mixing monster battles with card-based attacks.
The cuteness of the Axies — the NFT monsters you collect, breed and battle — clearly helps to sell the game, but the simple mechanics — particularly the lack of physics — made it possible for Sky Mavis to deliver a competitive experience with depth. According to Jack Etienne, CEO and cofounder of Cloud9, the game hits the esports goldilocks zone of being easy to learn, but tough to master.
Since its debut, Axie Infinity has launched a free-to-play version — Axie Infinity: Origins — to make the game more accessible, while also steadily adding more esports-friendly features. Sky Mavis provides access to a dedicated esports server that has less frequent balance updates. This means that competition will stay more consistent for pros, rather than the constant metagame changes seen in other esports. Additionally, all players have access to all Axies and equipment to build the strongest team possible without needing to buy or breed the NFTs to build the ultimate team. On top of this, observers have a built-in anti-sniping feature that delays the stream, preventing players from using it to get information on their opponents.
Esports resistance to P2E
Despite these features, play-to-earn games will be synonymous with pay-to-win games for some players. However, Andrew Campbell, director of esports for Sky Mavis, pushed back on this.
“The idea of a play-to-earn economy is based on the concept of meritocracy. The best player should win and the best players should get disproportionate rewards relative to players that perform less well. Esports is just an extension of that,” Campbell told GamesBeat.
Ultimately, Campbell and Sky Mavis want to use esports to build the Axie community and reward its most active members. Axie esports tournaments pay out winnings in AXS, the game’s governance token. AXS can be sold on the open market, but Campbell’s goal is to use esports as an effective distribution tool to funnel these tokens to players that will view them as votes, not just money. Of course, the game uses smart contracts to ensure these winnings are paid out in a timely manner, a problem that esports has traditionally struggled with.
According to Campbell, “esports is much more than just another marketing spend. It doubles as an effective way to help build up the DAO [Decentralized Autonomous Organization – a group that governs blockchain-based projects like Axie Infinity through community voting] on top of just being naturally aligned with the values of the Axie ecosystem.”
However, many esports fans remain critical of blockchain companies. Of course, the high profile implosions of Three Arrows Capital, Celsius, FTX and more have given fans reasons to be skeptical. Hackers are also a real concern as Sky Mavis knows firsthand — they stole $620M from Axie Infinity in March 2022.
Etienne knows that fans need reasons to believe in the technology. “We’re definitely getting some blowback on the partnership, but I understand fan concerns. People just feel like everything has to be a scam right now, but trust can only be built through good behavior over time, not simple words. Owning digital items is not new and we need to venture forth and see how the technology evolves. We want to show the potential and why we think Axie is fun,” he explained.
True to its DeFi roots, Sky Mavis has leaned into backing third-party organizers rather than a top-down approach. Axie has issued several AXS grants to fund the prize pools for its esports program. The third grant totals 160,000 AXS (~$1.25 million at the time of writing) and will fund tournaments through Q2 2023.
This slow, but steady growth approach is also meant to ensure the sustainability of Axie’s esports ecosystem. “You’re asking people to make a commitment so you have to make sure you’re rolling it out in a responsible way. You always want to avoid going too big and then having to dial it back,” Campbell stated.
One of the advantages of Sky Mavis’ decentralized approach is that it can work with a variety of companies to build its esports ecosystem. While many of Axie’s grants have gone to guilds or other P2E focused organizers, the company is also making inroads with more traditional esports teams. The first official recipient of the third grant was Method’s MetaGuild. Method is best known for its World of Warcraft raiding team. Similarly, Team Secret launched a guild and scholarship program for Axie Infinity.
Ultimately, Axie Infinity benefits from bringing more esports organizations into the fold because their participation gives the game legitimacy. Axie runs on the Ronin blockchain, a side-chain of Ethereum that Sky Mavis operates. This makes it a leader in some ways but there’s also a risk of it becoming its own island in an industry pushing for interoperability.
To Campbell, these partnerships help to reassure users: “It shows that there is a network effect forming and it reduces the risk that we get stuck on an island. The more traffic that can come in and out of the island, the healthier our economy is going to be.”
Synergy between Axie Infinity and Cloud9
Cloud9 is Axie’s biggest esports partnership to date. The two companies began seriously talking in mid-2022 to build a deeper relationship.
Cloud9 is one of North America’s most popular esports organizations, making it an ideal choice for Axie Infinity to reach an audience outside of Southeast Asia where the game is most popular. Its roster of both competitive talent and streamers was attractive on top of the more reasonable price point and targeted approach Cloud9 could take compared to traditional marketing agencies. More importantly, Cloud9 was open to promoting the potential of blockchain technology.
Etienne is a firm believer in codifying ownership of digital assets. “I paid my student loans by selling in-game items and characters. Back then and today, there was a lot of risk, particularly chargebacks. It’s personally interesting to me to see publishers supporting players to sell their in-game items.”
This shared vision and goal of communicating the potential of blockchain technology in a way that resonated with the traditional gaming audience was the foundation of the partnership. Given the potential pitfalls seen with other NFT projects, both Campbell and Etienne wanted to avoid something that felt like a scam to users.
“Neither of us are chasing a hype cycle. Nobody’s looking for a get rich quick thing. Both of us are trying to build something that delivers quality for users,” Campbell said.
For this latest activation, Cloud9 ran a tournament using the free-to-play Axie Infinity: Origins that pitted its members — including Etienne himself — against seasoned Axie pros, with commentary geared towards introducing new players to the game. Ultimately, the stream on Cloud9’s Twitch channel averaged about 180 viewers, which is more than double the game’s average viewership.
But to Sky Mavis, viewership was never the most important metric for success. The goal was quality over quantity. “It’s more important to us to reach engaged viewers that get excited enough to set up a Ronin wallet than thousands of people seeing us on the Twitch front page that just click away,” Campbell added.
Along those lines, Cloud9 stood out because it gave Sky Mavis a way to directly reach its most engaged fans.
At the end of 2020, Cloud9 launched Stratus, a paid membership that offers unique access to the team.
The format of Stratus is evolving. It initially launched at a $500 per year price point emphasizing its exclusivity. However, the model has been reworked to either $10 per month or $200 annually to make the program a bit more accessible. Today, members receive a welcome box with merch upon signing up and access to a members-only store, behind-the-scenes content, Discord server and community tournaments like the one sponsored by Sky Mavis.
Access to Stratus members was a key selling point for the collaboration between Axie Infinity and Cloud9. After all, paying for access to the program shows how engaged a fan is with the Cloud9 community. “It’s almost like an onion and the Stratus members are closer to the core. We’ll work our way outward to get closer to the general public, but they are a safe starting point to experiment with our esports program,” Campbell said.
The program is one of the first paid membership programs offered by an esports team. Several teams have established non-subscription fan clubs — particularly in Europe — while others have experimented with issuing fan tokens with exclusive benefits (e.g., Socios).
However, it’s not common for esports teams to leverage their fan clubs as an asset for partnership sales. As teams look to diversify operations, having a paid fan club can bring in both direct revenue from the community and indirect revenue from partnerships. Having a paid membership allows teams to identify and market to power users (those willing to engage and spend money) rather than passive followers, which is a major asset.
Axie Infinity is betting that Stratus members are more likely to be interested in the potential for blockchain technology compared to the rest of the esports ecosystem. As Campbell put it, “we want to show esports fans that the technology isn’t just theoretical and speculative, but it’s practical and has utility. That utility is what’s actually going to win people over in the long run.”