The May Spike: they migrated off of Ethereum and on to their own private blockchain, Ronin, on April 28th, which massively lowered transaction costs and increased transaction speeds. You see this pattern a lot with blockchain games, they migrate off Ethereum onto a proof-of-stake L2 or even L1 and you get a surge.

Sustainability: The entire eco-system is not sustainable at all. The game's revenue model is dependent not on the size of the user base but on the pace of user growth. The majority of their players are "scholars" and are being paid to play the game. They've effectively turned their users into liabilities rather than assets, and Axies themselves and SLP are caught in an inflationary spiral.

If you look at official communications the founders themselves have essentially written off the existing "1.0" version of the game and are promising people that the land-based gameplay and "Battles v2" are going to fix everything.

We analyzed the major issues with their future plans here:
https://naavik.co/business-breakdowns/axie-infinity/#whats-n...

There's several problems with Battles v2:

- Their stated plan (as of the report) is to feed more users into the crypto version of the game, which doesn't fix the unsustainable treadmill

- Their original plan was to get Battles v2 onto iOS, Android, and Steam, but many of those platforms have cracked down on Crypto games lately and Axie could have a hard time getting approved for release in App stores

There's even more problems with land-based gameplay:

- There is a finite amount of land

- Land grants resource bonuses and the ability to deploy user-generated minigames

- If you don't have land you will have to pay a landlord to access its benefits

- Land goes for extremely high prices (and will thus have very high rents)

This is an extremely puzzling model for a User Generated Content platform. Land speculators will buy all the land and charge rent to the people who actually want to create value. There is no limitation to the number of "slots" available for publishing on Steam or app stores. Given that I have to make an experience that will only run on Axie's platform, why would I invest the time to do that just to pay rent to a virtual middle-man for the privilege of creating value for Sky Mavis?

Basically, they're headed for a land shortage / housing crisis, which is something we've also observed in the 30 year history of MMO's. Anytime you have a game with true "land like assets" you get these shortages and perverse incentives, with scalpers hoarding productive assets they can use as leverage, and it leads to a sort of recession. It has eerie parallels to the real-world housing crisis we're living through right now!

https://www.gamedeveloper.com/business/digital-real-estate-a...

Sky Mavis could realize this and try to change things so that there's a lot of communal land available, or just make more land on demand, or any number of other things. But they're caught in a trap. They promised all these land investors that new land wouldn't be created and that land would be this excellent investment that lets them collect value from all the people building on Axie in the future, kind of like snapping up domain names in the early days of the internet. So, Sky Mavis has to choose between opening the doors for landless peasants, or protecting the land values of landed aristocrats. Either choice will cause problems for them.