Aleksander Larsen - Learnings from Axie Infinity - TOKEN2049 Dubai 2025

And when we look back uh into into that time, we can see that there were very few uh application developers that were in the market. But at one point we see this massive spike. So this massive spike. All right. So that's that thing isn't working.

But the massive spike that you can see here is actually just after CryptoKitties came to market. Now CryptoKitties, for those of you who don't know, was the absolute first crypto game that was ever released or ever popular. It basically broke Ethereum and it made developers believe that blockchain gaming or crypto gaming can have something meaningful uh to say, can actually drive significant revenue. uh and actually it made Dapper Labs which is a creator of CryptoKitties insanely successful and it's actually where the creators of Axi Infinity met each other in that community. So in short, whenever you have these like massive um uh application successes, it drives a lot of traction because people start believing.

But of course, it's not so easy to actually just create something and then successfully do it over and over and over again because it's a new industry. It's a new market and we don't really know what it takes to succeed. So this is an very interesting chart as well. I'm going to move to this side. So where you guys can see that usually what happens is that there is an application that gets released that application then hits an infrastructure scaling ceiling.

So in cryptokitties it was Ethereum it broke Ethereum and from there on out you start to see that you know there are many other problems so that developers for example they cannot succeed. So, it's going to take time uh to to solve some of these problems such as infrastructure issues uh such as bad UI, bad UX um and such as low funding as well because when some games go to market or some applications go to market and they fail that kind of detracts all VC investments from that space and that's also when you see uh a lot of money flowing into fat protocols or layer ones which is very very similar to what we see in today's market and mind you this is actually what I wrote back in 20 uh 1720 2018. So it's very uh interesting how history is actually repeating itself. Now if we then look at what is the bright side of this I actually love this slide. When I look at this I see the future.

I see hope because what it means is that the bad actors are being washed out. This is Darwinism at work. It means that the money and the attention will flow into the great developers who are actually innovating at the right places as I would say. So we saw this happen in 2018 2019 with AXI where you had various innovation triggers which then again made something special happen. So back in 2019 for example unis swap came to market was the beginning of defi.

uh for AXI you could say we actually started releasing Ronin which is our infrastructure scaling solution which then again made it more possible for uh you know scaling of the breeding game that we had inside of AXI. We then also look at uh game economy and token distribution innovation for AXI. That was breeding. That was actually allowing players to create uh new tokens simply by playing the game. And from there on out, our community actually create their own created their own unis swap pools which then actually made it possible to create massive massive massive game economies.

Now this leads again to some massive massive growth. As you can see here, Axi Infinity at its peak had over uh 1 million uh daily active users just in terms of transaction. But actually the game uh attracted over 15 million uh users into crypto over its existence. Now when we look at what happened after it's very similar to what happened in 2017 2017 2018 just here it's represented by daily active users because you can see on Ronin that the daily active users actually went down uh because there was not any new innovation after after the first side of it after the first DeFi scaling axi breeding but from there on out we see a couple of years going and then we see November 2023 that the daily active users are going up. Now, this next wave is represented by pixels and some other games that are trying to innovate and do things a little bit similarly to what we did, but they also have some new innovations, but still it's not nearly as big of a zero to one when it comes to user growth as what we had uh with Axi.

So, Axi Infinity is still the most successful crypto game ever. It's generated over $1.3 billion in revenue so far. Axi NFTs have traded for over $4.2 billion between uh between people.

So, it's actually the most traded NFT collection of all time. Now, the reason why I'm showing you guys all this is because after Axi Infiniti, over $15 billion has been deployed into the crypto gaming industry. But yet Axi Infinity is still the biggest and most successful crypto game ever. Now that is actually quite surprising. Now then we have to look at why is this the case.

So here I've kind of isolated it out. First of all, I believe that there's a wrong focus. People have put their money into developers that are building games inside the AAA gaming space which have incredibly long lead time. it takes years to go to market and it's very very difficult to actually uh innovate on the graphics side today because most of it stuff has been figured out. We've also seen that there's been very little crypto innovation as I like to call it.

Now crypto innovation from my side actually is tied into the axi breeding game for example. It's actually how do you distribute tokens into the hands of the people that are playing the games and you make them hold on to it. Crypto innovation is about incentives. How do we keep uh the people that are playing the game incentivized to play the game but at the same time hold on to the assets that they are getting rather than selling them which they are doing in the market uh today. And lastly, there's actually been too much money in the space.

We see the wrong developers get funding. There's a lot of flashy developers that are going here and there, but still uh they don't really build something truly of value. They're mostly raising money just to create something and then raise the next couple of rounds rather than really truly innovating. But this is actually one of my favorite memes. I'm sure you guys have seen this online.

I've just replaced hard men with teams. So basically where we are today is we're at the hard times stage where hard times will create strong teams. Eventually strong teams will create good times. Good times, of course, we'll create weaker teams, which is where we have been, and so on and so forth. The cycle goes uh until we hit mainstage adoption.

But uh fear not, if you're a weak team here, you will grow over time and then you will become a stronger team. So, what should crypto games actually focus on? I believe that to to create a successful game in crypto, there are three main pillars that you should be focusing on or that you can focus on. So the first one is actually gameplay. Sounds very obvious, right?

The gameplay of a game needs to be great. The second one is game economy and the third one is graphics. Now, if you want to innovate on all of these three fronts, it's actually like an equation where the result of this is probably going to be a highly likely that it's going to fail. So, I hypothesize that game developers in crypto should only be focusing on two of these pillars. So, the main two things would be the game economy and the and the game play itself.

These two things need to be so tightly together that uh they can basically um iterate fast when there is a bug that happens within the game economy. So whenever a bug happens in the game economy for example if you have a massive massive graphical AAA budgeted game it's going to take months and months and months before you can actually iterate on that and then ship the next version of the game which is actually going to make the game economy work. Now, this is where a lot of contention is in the space because people thinks that I'm saying here that, you know, graphics are not important. I think the graphics are important, but I think a beautiful art direction will trump graphics any day of the week. For Axi, for example, it was never set out to have this like amazing AAA type of graphics, but I was attracted to the art direction of the game.

That's actually why I wanted to join the team in the first place. So, and we are actually looking at all of these things inside the new Axi Infinity game which is called ATS Legacy. You know, we've been developing this for quite some time. The first version is going to go to market by the end of the summer and I think that what's most exciting to me about this is actually the economics developments that we're seeing in addition to of course the early stage traction. So, the trailer for example has been viewed over 10 million times.

We got over 5 million people who are pre-registered. But uh a crypto MMO is actually what we're building. So an MMO in this case is where there's a lot of focus on the resources gathering, a lot of focus on the social aspect and a lot of focus on life and death. People need to be able to lose resources as well as gain resources. This is very natural in the real life economy as well.

You know, you consume things, you do things, and from there on out, that's actually how the game economy works at scale. Now the question in games is actually nobody likes to lose money. Nobody likes to lose resources. So in this case that's where the social aspect of the game is even more important. You need to make sure that you have a guild or a social aspect of it that can pick you up later.

Now looking beyond just AXI oh I'm going to skip that one. Everything that we did for Axi we actually created into Rona network. I mentioned it a little bit earlier here is we created our own blockchain so that we were able to go to market with Axi. Basically the goal for Roland is pretty simple. We want to bring every single human being on chain.

And the unfair advantage that we have is we started out building a network effect with the Axi Infinity game. And from there on out that actually attracted new developers into the platform um because they want to get access to the distribution of players that we have and of course the fact that they actually have money uh to buy game assets as well. Now, this actually leads into a pretty great virtual world cycle where we start out with having these engaged users. Now, engaged users are incredibly attractive for developers. They have money to buy something.

So, engaged users then attract more developers. Those developers from there uh they again attract more users from there and they attract successful launches. So if you're a developer, you come into Ronin, you from there on out have a successful launch based on the feedback and the advice that you get from Sky Navis, which then again also uh brings in net new users and from there on out that is actually how we want to succeed with bringing every single human being on chain. So I do want to uh have uh this slide at the end here because I think it's great. Of course, I like memes.

But the key here is platforms are usually created starting out with an application. If you look at Steam for example, it started out with HalfLife which then again became Counterstrike which then again became this massive massive uh distribution platform. The same actually goes I think for Fortnite which now is also the same for Epic Games and also these other platforms, right? So usually what you want to have is one successful application and from there on out you can build a successful distribution platform because game studios and even application developers around the world what they are looking for are users. I mean even if you go to a blockchain and they will give you some money uh if you launch into somewhere where there aren't any users that blockchain is counting on you to get most of the developers into the most of the users into the ecosystem.

It's much better to launch into a place where there are active users, there is money that they can buy into your assets and then you can use that as leverage to begin your journey uh and attract more users into your application. Okay, I think uh that's it for me uh today. Thank you guys for coming. I hope you enjoyed uh this very very brief presentation about Sky Mavis Axi and Ronin and the future of web3 gaming even in this heat. Um, and I guess I will see you around here in Dubai.