Thetan Arena, a new video game fueled by cryptocurrency, claims to have quickly amassed over twice as many users as Axie Infinity, the digital-asset darling that leapt to a dominant market position earlier this year in the “play-to-earn” sector.
Some analysts are pointing to Thetan Arena as the “next Axie,” but others say the two play-to-earn games aren’t comparable. “Play-to-earn” refers to video games where players can earn cryptocurrency rewards and use those for in-game purchases or just to cash out.
The e-sport multiplayer online battle arena (MOBA) game launched late last month, and its governance token Thetan Gem token (THG) currently has a market value of more than $500 million, based on data from Thetan Arena’s developer, Wolffun Game, a game studio led by Vietnamese developers, as well as pricing listed on the website CoinMarketCap.com.
The THG token’s performance has been marked by considerable volatility, however. It started trading in September following an “initial decentralized offering” that was marred by two cyber attacks. Initially changing hands around $1.35, the price of THG leapt to an all-time high around $20 in late November before retreating to about $6.04 now.
The current market valuation is still a small fraction of the $6.7 billion for Axie’s AXS tokens, but it’s the reported user-growth figures that look so impressive. According to the company, Thetan Arena has already racked up over 7 million users. That compares with Axie Infinity’s 2.5 million average monthly users.
On-chain users
When looking at the raw blockchain data of daily on-chain users on Thetan Arena, the figures are small compared with Axie Infinity’s. So the project may have some catching up to do before it poses a real threat in the play-to-earn sector.
For example, check the user statistics reported by DappRadar, which tracks data for unique active wallets interacting with a given decentralized application, such as marketplace and box activity (in-game NFTs trading activity). This on-chain data does not include users who play the game via an app off-chain.
According to DappRadar, Thetan Arena has 4,800 daily active users and 26,500 weekly active users, while Axie Infinity has 106,000 daily active users and 302,000 weekly active users.
CoinDesk examined available blockchain data using contract addresses provided on the pricing website CoinGecko for Thetan Arena and Axie Infinity.
According to the data, there are about 79,000 holders of the THG tokens on Binance Smart Chain and 1,930 holders on the Kardia blockchain, as well as 34,630 holders of the project’s Thetan Coin (THC) tokens on Binance Smart Chain. Meanwhile there are 116,801 holders of Axie Infinity’s AXS tokens on the Ethereum blockchain’s Ronin sidechain, 46,943 on Ethereum and 65,520 on Binance Smart Chain.
Aleksander Larsen, Axie Infinity’s co-founder, said that the daily active user numbers shown on Thetan’s website seem to be mostly off-chain users who do not interact with the blockchain economy on a deeper level.
“I think it will be quite challenging to turn the free ‘grinders’ into on-chain users without a solid economy,” said Larsen.
A Thetan Arena representative, who initially replied to several of CoinDesk’s queries, didn’t respond to a request for comment on which users are included in the 7 million figure it claims.
Ranking on Apple’s App Store
Thetan Arena, which is compatible with Apple’s iOS operating system as well as Android and PCs, allows players to earn THC tokens, which are used to speed up progress in the game and unlock weapons, heroes and abilities. Players can form teams, battle with others and earn token rewards with a combination of gaming skills and teamwork.
In the first seven days of Thetan Arena’s launch, the game ranked first on Apple’s App Store in 11 different countries and second on the App Store in all categories, according to a press release.
Jason Chapman, managing partner at Konvoy Ventures, a venture fund investing in early-stage companies in the video gaming industry, said he doesn’t see Thetan Arena and Axie Infinity as direct competitors.
“Thetan Arena is attacking a completely different genre,” Chapman said, “which as a gamer I am excited to see.”
“I don’t view the two as direct competitors, the same way that I don’t view most games that are in different genres as direct competitors,” Chapman said.
Axie’s barrier to entry
Thetan Arena’s surge in popularity can be attributed to a combination of an effective social media presence on platforms like Discord, and also by offering users the option to play for free and start earning tokens straight away.
There also might be a void in the number of play-to-earn projects that have actually gone live.
Alexandre Lores, a crypto analyst at Quantum Economics, pointed out that there’s a gap in the market for released play-to-earn games, which could contribute to the game’s sudden peak in popularity online.
“This gaming community has been hearing the hype about crypto gaming for months in a market saturated with cryptocurrency tokens and very few actually released games,” Lores said.
Unlike Axie Infinity, Thetan Arena requires no initial investment to start. Players do not need to pay a starting fee or own anything – such as non-fungible tokens (NFTs) – before beginning. That’s in contrast to Axie Infinity, where players must own three NFTs (costing roughly $1,065 according to DappRadar) to start their play-to-earn journey unless they secure a so-called scholarship.
“Axie’s starting cost is definitely a significant barrier to entry,” said Chapman. “There is a big difference between getting a free-to-play user and someone you are asking to invest a significant amount of money to start playing the game.”
Alternatively, there is a paid option called NFT Heroes on Thetan Arena that allows users to participate in various special events to earn more THC than in the free version. These THC tokens serve as the currency for in-game rewards and purchases, whereas the THG tokens offer holders a hand in the project’s governance.
“If there’s one game out right now to end up flipping AXS, it’s THG,” tweeted Jonny, host of “In the Game” on the YouTube channel Crypto Banter.
Thetan Arena’s gameplay
A student from Singapore told CoinDesk that he plays both Axie and Thetan Arena but prefers the latter, saying he finds it less of a “chore.”
The student is part of Thetan Arena’s Discord group and was contacted via Discord. He agreed to comment but asked that his identity remain confidential. He said that he is able to make around $40 a day by playing Thetan Arena on his phone or PC, whereas with Axie he only made $10 a day.
“I used to play Axie daily, but Thetan is much more fun because it has more engaging gameplay,” the student said.
Another player, who goes by “Baze” and lives in Australia, said he plays Thetan Arena because he cannot afford the starting fee for Axie. Baze said in a Discord interview with CoinDesk that he earns around 72 THC ($10) daily on average by playing the game but recently has experienced burnout.
“Teammates play too much of a role in determining your wins/loses in Thetan,” said the player.
According to Thetan Arena’s website, “The game allows you to form a team, battle with others or earn money with just your skills.”
Baze said that the emphasis on team playing is a flaw of the game and needs to be better developed.
Future of play-to-earn
One thing about Thetan Arena that’s hard to dispute: It’s positioned in one of the hottest parts of the fast-growing cryptocurrency industry.
Play-to-earn games and metaverse-related projects have surged in popularity over the last year, with Wall Street firms predicting large investments, and the associated tokens surging to lofty market valuations. The U.S. bank Morgan Stanley recently predicted that the metaverse will be the “next big investment theme,” in a note to clients this month.
Chapman said that after a successful year for the gaming industry, there are no signs of the sector slowing in 2022.
“People want to engage in more interactive entertainment and we will continue to see a shift away from passive entertainment,” such as TV, he said.
The gaming industry continues to explode and is growing at a compound annual growth rate of about 9%, and the player base grew by over 5% in 2021 to over 3 billion players, according to Chapman.
In cryptocurrency markets, gaming- and metaverse-related tokens have soared, with Axie Infinity’s AXS price up 17-fold this year, and The Sandbox’s SAND price up 16-fold.
The Sandbox, for what it’s worth, is a subsidiary of Animoca, which is an investor in Thetan Arena, as confirmed by its chief communications officer, Ibrahim El-Mouelhy, in an email to CoinDesk.