The cost of games

-This is similar to the modern model of video games with microtransactions

Sony earns a cut of the sales of third-party games on PlayStation, which of course it gets to keep with first-party games – meaning that its own games can justify very large budgets more easily, as they generate more revenue per unit sold. A further justification for taking this kind of risk on high development costs is that the games themselves se... See more

Gaming is a hits-driven business, where the biggest productions cost hundreds of millions of dollars and need to find a way to recoup their sizable investments. As a result, the companies behind these massive games look for as many ways as possible to mitigate risk, either by copying popular trends (like the battle royale craze of the late 2010s) o... See more

Over the next five years, 20% of Gen Z gamers' "fun" budgets (i.e., money spent on entertainment, leisure, or recreation) will go to in-game purchases, with the average current spend being $50/year.

A typical game would spend millions of dollars on marketing and keep the majority of profits to itself; Axie spends nothing on marketing, but lets players keep most of the value created. That should lead to a stickier game and more opportunities for expansion.