Seller of USD 100K Virtual Car, Animoca, Bets Big on Blockchain
Animoca Brands, Hong Kong-headquartered publisher of mobile games, is betting on blockchain as they're considering this technology to be a game changer in the industry, according to Yat Siu, Co-founder and Chairman of the company.
In 2018, Animoca reached AUD 12.8 million (USD 8.9 million) in operating revenue, while the result for the whole group was AUD 16.5 million. One of their brands, The Sandbox, has over 40 million installs on mobile and 1 million active monthly creators. Also, recently, they managed to sell a virtual car for more than USD 100,000, while their Ethereum blockchain- based racing game F1 Delta Time now has over 30,000 subscribers.
In an interview with Cryptonews.com, Yat Siu discusses their strategy and why they believe in the blockchain technology.
Cryptonews.com: What is your blockchain-related growth strategy?
Yat Siu: We’re working on many different projects and have a lot in the pipeline. Our goal is to bring about a shift in the concept of digital ownership. Right now you don’t own anything inside a game - the game owner grants you a license to use in-game assets, but they are ultimately the property of the publisher. Blockchain allows us to change this paradigm. We can now offer true digital ownership, and we will leverage that true ownership to increase the value associated with games - both in terms of consumers, who will get more out of a game, as well as game producers and publishers, who will benefit from increased engagement and conversion. Mobile freemium [a pricing strategy that includes free and paid products] gaming is a USD 70 billion industry that is powered by a less than 3% conversion rate; we believe that true digital ownership can push that conversion rate up - and just a 1% increase would translate to approximately USD 25 billion in extra revenue.
Why did you decide to develop blockchain-related projects?
Blockchain is still in the early development phase, and we see a powerful opportunity for early adoption. The blockchain market today is analogous to the Internet boom of the late 1990s, and presents similar opportunities for a significant technology shift. Think about the relatively crude services and web sites associated with the Internet in the 1990s - you had to have a certain level of vision to foresee how they would evolve into today’s powerful companies and products. Animoca Brands is becoming a leader in blockchain and gaming because our vision informs us that blockchain will become a consumer technology with mass scale and extreme relevance. Blockchain will change the nature of gaming by enabling true digital ownership, thereby increasing the engagement levels as now these items have real value.
Blockchain’s value in this case has nothing to do with efficiency or speed. The value is the permanence and immutable nature of the technology that allows for true digital ownership and true digital scarcity. For the first time in digital history, blockchain lets you own something permanently, and that ownership is validated by mass consensus.
The F1 NFTT auction recently ended for a unique, non-fungible token (NFT) collectible. What other collectibles are you planning to issue and when?
We will keep releasing official Formula 1 NFTs in the future, in fact, the second auction, for a special Monaco car NFT, is currently underway.
What have you learned from the experience of the popular crypto collectible CryptoKitties?
From CryptoKitties, we have learned that NFTs are an incredibly important development for investors and collectors because they allow digital assets to have properties (independently verified on blockchain) that until recently we only associated with physical assets. This means that a digital asset can now be traded on the basis of qualities like its rarity, provenance, or scarcity - just like a real-world asset such as a rare baseball card, postage stamp, comic book, or other collectible.
You’re planning to release the blockchain version of The Sandbox, the popular sandbox game for mobile phones. How is it coming along?
We’re approaching the release of the first phase of The Sandbox Marketplace. [In May, the company estimated that The Sandbox’s decentralised marketplace will launch in Q3 2019.] The next update of VoxEdit, which is the voxel editor of The Sandbox, will allow exporting both static and animated NFT assets to the Marketplace to earn SAND, the crypto currency to be used in The Sandbox. We are also very excited to have recently brought on board incredible partners such as Kakao and Hashed to support The Sandbox.
(Separately, Yat Siu added that “since launch, VoxEdit has been downloaded for 19,000 times, and there have been over 2,100 assets being created using VoxEdit.”)
Given that users can create their own non-fungible tokens within the game, are they the full owners of their tokens?
Yes, the creators are the full owners of their NFTs, and they can do whatever they want with them.
You are in partnership with Dapper Labs, Lympo, and Kakao’s Klaytn, to name a few. Are there any new partnerships in your pipeline?
The blockchain space is new and developing, and it will only grow through continued collaboration and cooperation. We are always looking for more partners, and we definitely have more partnerships in the pipeline that we are working on. I can’t comment on the specifics until they are signed and announced, so watch this space!
Animoca raised USD 1.1 million through selling new stock to Sun Hung Kai and Lympo, and announced multiple acquisitions and investments in various projects. Also, just recently, the company has raised USD 2.5 million in funding for The Sandbox. What is your M&A (mergers and acquisitions) strategy?
As you can probably tell from our news and dealflow, we are a very active company in terms of M&A. I cannot comment on further specifics as that would be sensitive information for a publicly listed company.
Disclosure: Cryptonews.com is backed by Antanas Guoga, a serial entrepreneur, investor, and co-founder of Lympo.