How NFTs Turned a Small Mobile Gaming Company Into a Billion-Dollar Giant
Compilation of the original text: Hu Tao, Chain Catcher
Compilation of the original text: Hu Tao, Chain Catcher
He said:
He said:"Maybe we can even reshape how people think about classic forms of capitalism"。
This future ruled by NFT and blockchain technology has become the savior of this Siu. Just over four years ago, Animoca Brands was struggling. In January 2014, revenue at the small mobile games business he cofounded with David Kim, a former SoftBank partner and former CEO of early Internet success Mail.com, fell 25 percent to $5.2 million, and its market value (just under $6 million .
Then, in 2017, Siu stumbled across CryptoKitties, an early blockchain-based marketplace where users could buy, sell and collect virtual pets. He spotted the problem and invested in Vancouver-based parent company Dapper Labs (then called Axiom Zen), which is now worth $7.6 billion. This is the first to grow into over 150 NFT-related investments. Animoca Brands now owns stakes in most of the largest and most successful NFT businesses in the world, including OpenSea (the largest NFT marketplace with an estimated $375 million in revenue in 2021), Dapper Labs, and Sky Mavis (developer of Axie Infinity).
“Probably the only place we’re not in is Antarctica,” laughs Yat Siu.
In mid-January, Animoca Brands raised nearly $360 million at a valuation of $5.4 billion, more than double the $2.2 billion it had raised before October. Forbes estimates that Yat Siu owns a 10 percent stake worth nearly $500 million. Investors in the round included Liberty City Ventures, Soros Fund Management and Winklevoss Capital. (Animoca Brands is reportedly in talks with global investment firm KKR to add about $140 million to the January round.)
Since struggling in 2017, the company has grown from 57 employees to more than 600. In the first nine months of 2021, Animoca Brands generated $670 million in revenue, about $530 million of which came from digital assets and investment income. Its token reserves were worth nearly $16 billion as of the end of November.
Overall, the global market for NFTs grew from $100 million in 2020 to $25 billion last year. A fifth of that came from games, according to NFT tracker DappRadar. Much of the action takes place in places like the Philippines, where low-income gamers have embraced a "play and earn" model that allows them to earn a steady income of a few dollars a day. Western gamers are less enthusiastic about embracing this trend. Blockchain games are either the future of the $200 billion video game industry or another bubble waiting to burst.Given the size of Animoca's holdings, many smart money are looking at Siu's success or failure as a litmus test for the viability of blockchain gaming.
“Very few people feel like they can help shape an industry,” Siu said. "It's very different than seeing a rally and an opportunity to participate. But here, you can help shape it, and at least we think it could be positive for everyone."
The concept behind blockchain games has been around for some time, dating back to the booming economy of online multiplayer games in the early 2000s, notably World of Warcraft, and later the original Metaverse project Second Life, which had its own digital currency, was the first The birthplace (and later bankruptcy) of a virtual real estate boom.
Blockchain games are a massive bet on the idea of "true digital ownership," where players can not only buy and sell items in-game (like a unique outfit or a super-powered sword), but those assets exist (on the blockchain). on-chain) independent of the game.How this actually works in an industry where competing game developers can't agree on even the most basic standards is anyone's guess, but one NFT gaming app has caught on: Earn as you play.
Take The Sandbox, a mobile game acquired by Animoca Brands in 2018 and transformed into a blockchain product, as an example. Players can buy a piece of virtual land for about $4,000, populate it with custom buildings, objects or characters, and sell it for a higher price, just by putting in the time. Animoca Brands charges a fee for each transaction. The Sandbox also has its own in-game token called SAND, which corresponds to a real-world value — according to CoinMarketCap.com, its market capitalization is currently $4.5 billion. Animoca Brands does not receive royalties on tokens, but has amassed reserves shown on its balance sheet.
"No one thinks about how much we can give back to the players in game design?" Xiao said. "It's really always been about the business."
Siu has been passionate about technology since childhood. Growing up in Vienna in the 1980s, he felt like an outsider because of his Chinese roots. He finds refuge in computers and the burgeoning Internet to escape his loneliness.
He taught himself to code on an early Texas Instruments computer, a "glorified calculator," as he put it, and later upgraded to the Atari ST. As a teenager, Siu started distributing music creation software online, using its MIDI port to connect to a keyboard. Not knowing his age, Atari reached out to him to discuss a job, but was dumbfounded when he arrived at the company's Austrian outpost. Still, they liked his online posts so much that they hired him as a consultant.
Siu founded Hong Kong-based email company Outblaze in 1998 after a college dropout and several startups. This is his first big achievement. In 2009, he sold the company's cloud division to IBM for hundreds of millions of dollars. During the ensuing recession, Siu used his millions to help the company recapitalize.
Inspiration for what to do next comes from the most unlikely places. Tired of carrying around a bunch of Baby Einstein flashcards to quiz his firstborn, Siu asked his team at Outblaze to develop a mobile app version. It's been downloaded some 20 million times, leading him to create Outblaze subsidiary Animoca in 2011 to develop the game. Rebranded as Animoca Brands and listed on the ASX in 2015.
It wasn't all smooth sailing. In 2012, Apple, one of Animoca's largest distribution platforms, suddenly removed all Animoca games from the App Store. No explanation was given. He suspects that his strategy of launching a new game a week is seen as "spammy" by Apple. Siu shifted the company to making kids' games, licensing popular brands like Thomas and Friends, and relaunched in the App Store in 2013, until Apple dealt a devastating blow to the category by de-emphasizing it. (Apple did not respond to a request for comment.)By 2017, Animoca Brands was a failed business.
Then, the co-founders of a gaming startup Siu funded told him about their new NFT project: CryptoKitties. The virtual felines were an instant success, becoming so popular that they nearly crashed Ethereum a month after their launch, in December 2017. A few months later, the crypto market itself plummeted, leading to the "crypto winter" of 2018, with bitcoin and ethereum trading at brief lows of $3,200 and $87, respectively.
Siu is strong. That year, he was at an NFT conference in Hong Kong with what he called "250 die-hard believers who were all too willing to drink our own Kool-Aid drink." He used the forum to build relationships with companies that would turn out to be his biggest wins: OpenSea, The Sandbox, and Decentraland.
Embracing cryptocurrencies makes Siu a target for the Australian Securities Exchange, which has taken a cautious approach to digital assets. The exchange gave him a stark choice: ditch the cryptocurrency or quit. "It's scary," Siu said. "If you get delisted, no stock exchange wants to look at you." Animoca Brands delisted in March 2020. (Technically, the company remains "public but private," meaning it operates like a private company with about 2,500 shareholders.)
Despite the bright future, the world still hasn't figured out how to regulate cryptocurrencies and NFTs. Controversial "earn as you play" models and the use of in-game currencies have heightened concerns about gambling, market manipulation and the exploitation of workers in less developed countries, who often rent NFTs from players in more developed countries in exchange for a cut of their earnings. part. Some Axie Infinity players are mainly in the Philippines, and their main source of income is playing digital monster games.
Last year, 35 bills on crypto and blockchain policy were introduced in the U.S. Congress. While the Australian Securities Exchange has announced plans to allow cryptocurrency exchanges and ETFs to trade on the exchange, only one has been approved. Jack Dorsey's Block, formerly known as Square, listed there in January. "It's too big to ignore," said Greg Medcraft, a former ASX regulator.
Not everyone is as enthusiastic as Siu. The economics of an "open metaverse," or collection of interchangeable virtual worlds, is not good for gaming companies, according to Blockstream CTO Samson Mow. The products produced by Blockstream are used to store and transmit bitcoins. “If Call of Duty sells you some weapons, Ubisoft doesn’t want you to bring them into Rainbow Six because it erodes their item sales,” Mow said.
“I just don’t see it happening the way people predicted it would happen, like [in the novel] ready player 1, you can move seamlessly.” Mow added that blockchain technology is far from being real The decentralization of Ethereum, the network that powers almost all NFT games, relies heavily on Amazon's web cloud services.
Axie Infinity’s main token, AXS, has lost nearly 60% of its value in the past three months, according to coinmarketcap.com. Electronic Art (Electronic Art) CEO Andrew Wilson previously expressed interest in entering the NFT space, but he walked back his remarks during a recent earnings call. Valve Corporation, which owns the popular gaming platform Steam, banned blockchain games and NFTs in October. Phil Spencer, CEO of Microsoft Games, has said that NFT games "feel more like exploitation than entertainment."
If the major gaming companies in the world are hesitant, Siu isn't. He was quick to praise the Animoca brand's upcoming PC and Mac title, Phantom Galaxies, which he said will rival the quality of AAA titles on consoles like the PlayStation 5 and Xbox Series X. Aside from a small misstep by Ubisoft, no major publisher has ventured into blockchain games yet. But this bold gamble is telling.
Original link
Original link
