nav
Business Models Business Operations

How Does Axie Infinity Make Money (Business and Revenue Model)

The Axie Infinity business model

How Does Axie Infinity Make Money?
Here’s what you should know:
  • What is Axie Infinity, and how does Axie Infinity work?
  • How does Axie Infinity make money?
  • Marketplace Fees
  • Breeding Fees
  • Axie Infinity’s profit and revenue
  • What is the Axie Infinity business and revenue model?
  • Axie Infinity’s funding and valuation

How does Axie Infinity make money? Here is a full, in-depth, breakdown of their two (2) revenue streams and the different products and services they offer, as well as the Axie Infinity business model, their profit and revenue, and how Axie Infinity works.

What is Axie Infinity, and how does Axie Infinity work?

Axie Infinity is a play to earn NFT based online video game on the Ethereum blockchain.

Developed by Sky Mavis in 2017 and later released in 2018, Axie Infinity has since grown to attract more than 2 million daily active players with over 90,000 ETH transacted on its marketplace since launch – making it one of the most popular play to earn games.

How Axie Infinity works is: Before users can start playing, they must first create a Ronin wallet and add it as an extension to their browser or mobile device. Once created, the user must buy their first three (3) Axies with that Ronin wallet and set a team.

After that, all that’s left to do is to set up an Axie account, download the game, and start playing.

Some of Axie Infinity’s competitors include NBA Top Shot, Loot, Decentraland, and other play to earn NFT games.

Axie Infinity Facebook Cover | Axie Infinity Business Model | How Does Axie Infinity Make Money? | How Does Axie Infinity Work?
Source: Facebook | Axie Infinity

How does Axie Infinity make money?

According to Business Insider, Axie Infinity handled more than $3.5 billion in NFT transactional volume on its marketplace in 2021. So how does Axie Infinity make money off of all that volume?

Below is a breakdown of how much money Axie Infinity makes and its revenue model. Including all revenue streams and how much they charge for their services.

Here are the 2 ways of how Axie Infinity makes money (in 2022):

Axie Infinity has a revenue model that makes money in two (2) ways – marketplace fees and breeding fees.

#1. Marketplace Fees

Axie Infinity makes money through a very simple business model – by collecting 4.25 percent of every purchase transaction made on the marketplace.

As noted above, it was found that Axie Infinity handled roughly $3.5 billion of transactional volume in 2021. Of which, Axie Infinity takes a percentage from each of those transactions.

Axie Infinity Marketplace Fee:

  • 4.25% of every purchase transaction
Axie Infinity Marketplace Fee | Axie Infinity Business Model | How Does Axie Infinity Make Money? | How Does Axie Infinity Work?
Source: Axie Infinity Marketplace

Note: The purchasable things on the marketplace are Axies, Land, Items, and Bundles.

#2. Breeding Fees

Axie Infinity also makes money through breeding fees. What are breeding fees? These are fees Axie Infinity charges its users when breeding Axies.

One thing to note is that the cost of breeding fees will fluctuate given that these fees are paid for using the AXS and SLP tokens. Both of which are cryptocurrencies traded on an open market.

Axie Infinity Breeding Fee:

  • 0.5 AXS x 900 to 15,300 SLP (per parent) = $56 to $555 (at the time of writing this, or you can check the most up to date costs using this Axie breeding chart)
Axie Infinity Breeding Fee | Axie Infinity Business Model | How Does Axie Infinity Make Money? | How Does Axie Infinity Work?
Source: Axie Infinity

Note: At the time of writing this, the cost of a Smooth Love Potion (SLP) token is $0.01727 and a AXS token is $50.58.

Axie Infinity’s profit and revenue

Axie Infinity has not released any official revenue numbers for 2021. But, according to a raw on-chain data report from Nansen, Axie Infinity looks to have generated $1.3 billion in revenue in 2021.

Note: Because Sky Mavis PTE. LTD (developer of Axie Infinity) is a privately held company, they are not required to make their annual reporting, such as Form 10-K’s, pubic.

What is the Axie Infinity business and revenue model?

Axie Infinity makes money through a few revenue models that they combine within their company, they are:

  • Gaming as a Service (GaaS) business model
  • Play to Earn (P2E) business model
  • Transaction based business model

Axie Infinity’s funding and valuation

According to Axie Infinity’s Crunchbase profile, Axie Infinity has raised $9 million over 4 rounds and has a valuation of $3 billion as of October 2021.