P2E game tokens decline massively, is this the reason?

• P2E game tokens have declined almost 99% over the past two years.
• P2E game platforms have witnessed a significant decline in active users in recent years.

In the not-so-distant past, a thrilling wave of play-to-earn (P2E) games emerged, captivating gamers and investors alike. Names like The Sandbox [SAND], Axie Infinity [AXS], Decentraland [MANA], and Gala stole the limelight and reached their peak of fame around 2022.

During this frenzy, the trade volume of their tokens soared, reflecting immense interest. However, recent data by Kaiko revealed that the trade volume of these once-soaring tokens has taken a sharp dip.

As reported, June’s numbers depicted a modest total of around $3 billion, in stark contrast to the exuberant figures seen during the peak of the craze. A plausible explanation for this surprising turn of events may be a decrease in active players engaging with these gaming platforms.

As the vibrant frenzy has cooled off, the player base could be one of the key factors influencing this drastic shift.

Analyzing the P2E platforms’ active users

Based on data from Active Players, Axie Infinity enjoyed a remarkable surge in active players on its platform between January 2021 and May 2022. The player count soared from approximately 850,000 in January 2021 to an impressive peak of over 2.5 million by May 2022.

However, since then, a decline has occurred, and as of the latest data available, the number of active players has dwindled to around 359,000.

Similarly, Decentraland’s DCL metrics exhibited a decline in active users over 90 days. As of the most recent data, the number of active users dropped from over 28,000 recorded in April to 20,626.

As for Gala Games and The Sandbox, tracking active user data proved more challenging. 

Volume and price trends

At press time, play-to-earn (P2E) tokens were facing a downturn on a daily timeframe. The Sandbox was trading at approximately $0.4, marking a more than 1% decline. Notably, it was in a bearish trend, as evidenced by its Relative Strength Index.

Decentraland and Axie Infinity were also experiencing losses of over 1%, with their prices hovering around $6 and $0.3, respectively. Gala was in a similar boat, trading at around 0.02 at press time and suffering a loss of over 2%.

Source: Santiment

A closer look at the volume metric on Santiment corroborated the downward trend these P2E tokens are encountering. Although AXS boasts the highest volume as of this writing, standing at approximately 77 million, the combined volume for all tokens falls short of 300 million.

Source: Santiment