The paradise of crypto games, the Philippines is making a comeback

Original author: Eli Tan

Original compilation: Luffy, Foresight News

On a recent Tuesday night, about 20 people were packed on the second floor of Joniel Bon’s new Internet cafe in Quezon City, 10 miles from Manila, Philippines. They sat in front of computers equipped with 34-inch curved monitors, playing video games such as “Heroes of Mavia” and “Nifty Island,” while music from Taylor Swift and Maroon 5 blared from the speakers.

Playing these games can become a full-time job, and some of Bon’s customers have settled in to refuel with slices of pizza. These games reward players with cryptocurrency tokens for completing small daily challenges. Typically, players exchange their tokens for the home country’s currency, pesos, and earn roughly double the Philippines’ $11 per day minimum wage.

A man and his child walked past a building. There was a small sign on the building that said “NFT X STREET”, which is the name of an Internet cafe.

After the cryptocurrency market crashed two years ago, 40-year-old Bon, who had always dreamed of a prosperous business for his company, had his hopes for the development of the gaming group community dashed.

“One thing I have to say is, ‘I believe this.’ I have to have hope,” said Bon, a former information technology worker. “We survived.”

Bon’s new cybercafé marks the start of cryptocurrencies booming again in the Philippines, which has long been a hub of cryptocurrency activity. Bitcoin hit an all-time high this month, recovering from the 2022 market crash and leading to gains in other cryptocurrencies such as Ethereum.

New billboards for cryptocurrency companies are now popping up across Manila. People have started harvesting virtual crops from a cryptocurrency game called Pixels as a new source of income. Overseas Filipino workers known as OFW (Overseas Filipino workers) also return to the country to earn cryptocurrencies, and they have a new identity as MFW (metaverse Filipino workers).

Players in the Internet cafe use their mobile phones to check their crypto wallets

Internet cafe decorated with anime characters

The value of cryptocurrency transactions in the Philippines increased 70% in November and December compared with September and October, reaching $7.3 billion, according to research firm Chainalysis.

The number of Filipino players of Pixels jumped to more than 830,000 in March from 80,000 in November last year, according to the developer of the cryptocurrency game Pixels. They stated that approximately 30% of the world’s cryptocurrency video game players are from the Philippines.

Joniel Bon is standing with a group of people watching several others play video games

The resurgence of crypto gaming activity has some Philippine officials hesitant. At a cryptocurrency conference in Manila in November, Kelvin Lee, then commissioner of the country’s Securities and Exchange Commission, said the government was grappling with how to regulate the technology as it regained popularity.

Cryptocurrencies have been at the center of fraud and scams in the past. Cryptocurrency games issue tokens that are more volatile than Bitcoin and Ethereum, meaning the boom could crash again.

“We want to have a safe space to operate well,” Lee said, while acknowledging that a strong cryptocurrency industry could help the Philippines, which relies heavily on outsourced customer service and information technology jobs. “How can you function well if the industry itself looks unruly, unwieldy, and illegal?”

Lee, who left the SEC this month, declined an interview request. Last month, the Philippine central bank told local media that it planned to issue its own digital currency within the next two years.

Cryptocurrencies have been particularly popular in the Philippines during the coronavirus lockdown. While more than 40% of the country’s population is unbanked, most Filipino households have access to the internet, allowing cryptocurrencies to spread to widespread rural areas.

During the lockdown, people started playing Axie Infinity, a cryptocurrency video game produced by Vietnamese company Sky Mavis. In the game, players battle Pokemon-like characters to earn a cryptocurrency called “Smooth Love Potion (SLP).”

People play Axie Infinity, a cryptocurrency money-making video game that became popular in the Philippines during the pandemic lockdown

When Axie’s popularity peaked in 2021, SLP was accepted by landlords, gas stations, and some restaurants in the Philippines as an alternative to the peso.

But a year later, when the cryptocurrency collapsed, thousands of Filipinos lost their savings held in SLPs. A game character that some players purchased for thousands of dollars (so expensive that some Filipinos needed a loan to buy it) became worthless.

“The game looks beautiful when everyone is involved,” said Ian Dela Cruz, 30, a farmer and former Axie player in Pampanga province, north of Manila. “But when everyone tries to leave, it’s game over.”

Former Axie player Ian Dela Cruz remains in the crypto industry and works as a video game streamer on Twitch

Some Filipinos who have successfully made money through Axie have become entrepreneurs, establishing their own companies and gaming teams called “guilds.”

Teresa Pia, 27, a former Axie player who quit her job as a preschool teacher in 2021, runs a cryptocurrency gaming guild called Real Deal, which has 54,000 members on the social media platform Discord. Pia said she sees her Discord channel as “a new classroom,” where she teaches members, many of whom are Filipino women working overseas, how to trade and invest in cryptocurrencies. With the resurgence of cryptocurrencies, many women are now making enough money to return home to their families, she said.

Teresa Pia is a former preschool teacher who teaches Discord channel members how to trade and invest in cryptocurrencies

“The money they receive may seem like a small amount, but when converted into pesos, it’s a lot of wealth for them,” Pia said.

Dela Cruz remains in the crypto industry and works as a video game streamer on Amazon-owned streaming platform Twitch. He is now the captain of one of the largest esports teams in the Philippines. In Pampanga, many farmers have started playing Pixels and harvesting virtual crops to earn cryptocurrency as extra income, he said.

The game’s American founder, Luke Barwikowski, said Filipino farmers gave him advice on how to make Pixels more realistic.

“Some users will provide us with their crop schedules or irrigation habits directly,” he said.

Even by crypto industry standards, the Philippines is full of opportunists. Philippine phishing scams are rampant in the cryptocurrency community on platforms like Discord and X, with scammers targeting victims through deceptive texts and Facebook messages. Former Axie players say that during Axie’s heyday, some guild leaders exploited disadvantaged players by taking half of their income as membership fees.

Bon said that in addition to providing computers and resources to guild members, he also sees his job as a protector.

Many farmers on the Dela Cruz family farm in Pampanga have started playing the video game Pixels and harvesting virtual crops to earn cryptocurrency as extra income

While cryptocurrencies have been a boon to many Filipinos, some say they could turn to other industries if the industry fails again. Dela Cruz said he dreams of managing more farms with his brothers without having to rely on cryptocurrency for income.

“Fresh air, the crow of chickens,” he said, “that’s something you can’t find online.”