From being sold for 5 million dollars to now being worth 3.6 billion dollars, how did The Sandbox achieve this?

Source: MetaverseHub Heart of the Metaverse

We firmly believe that the curtain of the metaverse has been lifted, leading the technological internet of the next 20 years onto the tide of the times. Here is our 5th issue, let’s see what the Sandbox, which is increasingly attracting the attention of Fortune 500 companies, is all about. Enjoy.

As the integration of fashion, music, and luxury industries with the metaverse gradually strengthens, some traditional financial giants have also begun to explore the virtual world. On February 16, 2022, JPMorgan Chase announced the opening of a virtual lounge named Onyx Lounge in Decentraland, becoming the first Wall Street bank to enter the metaverse.

Following the first entry of financial institutions into the metaverse, on March 19, HSBC, which manages over $3 trillion in assets, purchased a piece of virtual land in The Sandbox, becoming the first global financial services institution to enter The Sandbox.

Subsequently, Sebastien Borget, COO and co-founder of The Sandbox, stated in a press release: "We believe this is the beginning of broader adoption of Web3 and the metaverse by institutions that drive brand experiences and engagement in this new ecosystem."

It can be seen that in the nearly two years since the concept of the metaverse became popular, tech giants, leading internet companies, and capital have been actively entering the space, all exploring tracks suitable for themselves. However, it is an undeniable fact that the metaverse requires users to co-create.

However, some mainstream sandbox games currently restrict the rights and ownership of creators. To address the centralization of user-generated content, The Sandbox has rich experience in providing creators with new tools to build the metaverse.

Therefore, The Sandbox does not wish to be just a fun game; its goal is to gain recognition through empowering creators. So what exactly is the Sandbox ecosystem like? What story has it written in the metaverse industry? And why can it still become a unicorn-level company after being "sold" for $5 million?

What is The Sandbox?

The Sandbox is a sandbox game built on Ethereum, similar to Minecraft produced by Microsoft Xbox Game Studios. The characteristic of such sandbox games is that players can freely explore and create in the game, using the props provided in the game to build their own creations, ultimately experiencing the fun of the game by achieving certain accomplishments, while the game itself does not have a main storyline.

The difference is that in ordinary games, we can acquire or purchase corresponding equipment and props, but these game items do not belong to us personally; they belong to the game developers.

In the world of The Sandbox, everything will be different. The characters, props, and equipment in the game can be "NFTized" through blockchain technology, and everything created by players will become their personal "digital assets."

VoxEdit (creation editor), GameMaker (game creation), and Marketplace (trading market) are important components of The Sandbox ecosystem.

VoxEdit is a powerful free 3D voxel modeling and NFT creation tool that is easy to use. Once the models created by players are officially recognized, they can be traded in the official marketplace.

After acquiring the models, players can build game scenes and rules using GameMaker without needing programming skills. However, there is a prerequisite: you need to own LAND in The Sandbox.

There are a total of 166,464 LANDs in The Sandbox, which will never increase or decrease. Among them, 123,840 can be sold, 25,920 are allocated as rewards to partners, creators, and players, and another 16,704 are designated for hosting events and games.

SAND is a functional token based on the Ethereum ERC-20 protocol and is the main medium of exchange in The Sandbox ecosystem, which can be used for trading, governance, and asset creation. The "NFTized" characters, props, etc., can all become tradable assets. Once creators own their assets, they can trade with ordinary users who want to purchase LAND and assets in the Marketplace.

Since The Sandbox adopts a Play To Earn model, players can achieve profit creation through trading or acquiring tokens in the game. Thus, The Sandbox is also seen as a sustainable game and content creation ecosystem, where players' autonomous creations in the game can be converted into certain value.

What is the history of The Sandbox?

After financing in October 2021, The Sandbox's parent company, Animoca Brands, was valued at about $2.2 billion. Following a $358 million financing completed in January this year, the company's valuation soared to $5 billion, with this round led by Liberty City Ventures and participated by Soros Fund Management.

It can be seen that as a decentralized metaverse game, The Sandbox is attracting attention from the capital market. So how did The Sandbox achieve such success step by step?

In fact, The Sandbox is not a new project; it launched a mobile version of the game on Android and iOS in 2012. The application accumulated 40 million downloads and even reached nearly 2.6 million monthly active users at its peak, and was rated as "Game of the Year" by Apple in 2012.

In 2015, The Sandbox provided a PC version for download through the Steam platform, where users created 70 million unique worlds and environments to interact with other players.

However, this user-generated content sandbox game format was not enough for The Sandbox to stand out from its competitors, especially against a powerful rival like Minecraft, leading to its decline.

The turning point for The Sandbox's second life came in 2018 when it was acquired by Animoca Brands for about $5 million (actual price $4.875 million).

At that time, The Sandbox was developing its blockchain version, and Animoca Brands had a strong interest in the blockchain field, leading to a perfect match and resource sharing.

The CEO and founder of The Sandbox game development team, Pixowl, stated, "We believe blockchain is the way for our players to gain true ownership, and they are creating more content," making it a great opportunity for The Sandbox.

Indeed, The Sandbox's concept aligns very well with blockchain technology. Compared to other blockchain games, The Sandbox offers higher playability and a more mature economic and governance model, making it a leader in the blockchain industry for sandbox games.

The Sandbox addresses many issues of open sandbox games through blockchain technology, such as the centralized control of virtual product transactions created by players in some mainstream games, which restricts the value players should gain in a free market.

Currently, The Sandbox refuses to disclose its valuation, but the market capitalization of the Sandbox coin supported by The Sandbox exceeds $3.6 billion (source: CoinMarketCap).

In addition, according to official disclosed data, The Sandbox has raised over $95 million in four rounds of financing. Here are the details of The Sandbox's financing.

Overall, whether as a traditional sandbox game or a decentralized metaverse game, The Sandbox has received much support and popularity from players, thanks to its strong development and operational capabilities behind the team. The virtual reality platform still needs more完善的制度来维护用户的权利，而区块链版本的The Sandbox也在继续积极的探索，并逐渐获得了诸多品牌方的喜爱。

Why is The Sandbox favored by brands?

Whether it is its decade-long development history or its unique usability and fun as a sandbox game, The Sandbox, as one of the "Four Dragons of Virtual Land," has attracted many brands.

Currently, The Sandbox has established partnerships with over 60 companies, including HSBC, Adidas Originals, Square Enix, ATARI, The Smurfs, Care Bears, and many other well-known IPs, making it a hot topic.

But why does The Sandbox attract brands? Let’s take a brief look back at The Sandbox team's strategic planning and its strong collaborations with partners in the past.

As early as August 2018, Sebastien Borget, co-founder and COO of The Sandbox, announced at the ChinaJoy exhibition that they would launch a decentralized sandbox game called The Sandbox, based on the mobile game The Sandbox Evolution at that time.

Sebastien Borget stated at the conference that The Sandbox team would release a 3D editor, VoxEdit, which combines user-generated content (UGC) with NFTs, allowing anyone to create their own NFTs and build a new integrated ecosystem where creators and players can play, create, collect, earn, govern, and own digital assets in the game, providing a foundation for brands to build their own scenes in The Sandbox.

In the following two years, The Sandbox successively introduced LAND to bring in quality land and assets, established the Game Makers fund to sponsor and authorize game projects and artists, and built a large community of over 750,000 members, steadily and rhythmically advancing the construction of The Sandbox ecosystem.

Sebastien Borget firmly believes that players come not for technology but for fun, and creating interesting, visually appealing, and well-mechanized games is The Sandbox's ultimate vision, which aligns perfectly with the IP attributes of brands.

Most surprisingly, Sebastien Borget publicly stated in an interview in 2020 that The Sandbox is a sandbox metaverse. The Sandbox team's foresight of future technological development far exceeded that of most game companies at the time, placing them at the forefront of the times.

The Sandbox's partners can be said to cover various industries.

Well-known brands such as Atari, Care Bears, Japanese game developer Square Enix (publisher of Final Fantasy), Korean game developer SHIFT UP, Shaun the Sheep, and the Smurfs, along with award-winning game studios, have created their related themed metaverses in The Sandbox based on different brand attributes and labels, faithfully restoring the scenes required by the IP.

Blockchain partners such as Matic, MakerDao, Klaytn, OpenSea, Bitski, Dapp.com, Polygon, Ethernity, and DappRadar have linked with The Sandbox's large community, promoting decentralized communication and driving the development and iteration of Web 3.0.

Decentralized game partners such as MyCryptoHeroes, ZEPETO, CryptoKitties, and Axie Infinity have joined forces with The Sandbox to provide interactive parallel 3D spaces, enhancing user experience.

Traditional industries such as South China Morning Post, HSBC, New World Development Group, Adidas Originals, auditing giant PwC, Warner Music Group, gaming giant Ubisoft, Play Magnus Group (PMG), Hong Kong Ocean Park, luxury brand Gucci, Singapore digital asset management company DWM, American high-tech sports menswear brand ASRV, French top fashion magazine L'OFFICIEL, and Thailand's Siam Commercial Bank (SCB) are showcasing new interactive games and experiences in The Sandbox's metaverse "mirror world."

At the same time, many celebrities are also laying out in The Sandbox. Jay Chou has held concerts in The Sandbox, and American rap superstar Snoop Dogg has created a mansion and corresponding avatar in The Sandbox, allowing fans to become neighbors with their idols, exciting countless people.

Bringing mainstream game companies and IP into blockchain games and NFTs, and establishing good trust and experience with these key brands is the direction The Sandbox team is striving for, and they are actively breaking through.

Currently, The Sandbox's partner landscape continues to expand. We believe that it is undoubtedly cool for players to play games, create, own assets, and profit while being surrounded by gaming giants like Atari, HSBC, and Adidas Originals.

The frequent attention from brands is not coincidental or a momentary whim. The Sandbox, based on blockchain technology, not only provides brands with ownership of digital assets but also achieves a perfect replication of the physical world, providing a foundation for brands to create a "mirror world" that breaks dimensional barriers, restoring dreamlike scenes that are difficult to achieve in the physical world.

At the same time, The Sandbox has a large user base that can effectively bring players and brands together, enhancing user engagement and brand influence.

In addition, with the arrival of the metaverse era, The Sandbox, which has laid out the metaverse-related track in advance and achieved perfect alignment, undoubtedly has a strategic advantage. As major brands rush into the metaverse, trying to seize the market, The Sandbox has become the primary choice for many brands.

Differences between The Sandbox and Minecraft

In the gaming field, a sandbox is a type of game where the core gameplay allows players to change, influence, or create the world within the game, with Minecraft being the most representative game.

Minecraft is a sandbox game developed by Mojang Studios in 2009. It is a pixel world made up of blocks, where there are animals, plants, and minerals. Anything can be destroyed to obtain materials such as wood, meat, grains, and ores, which can then be reassembled into new things through a series of construction formulas.

Thus, players can freely modify and build this world in Minecraft, making it truly "my world" that belongs to the players, as if immersed in a world with rules very similar to the real world.

Additionally, Minecraft has a creative mode where players do not need to take risks but only retain the building function, allowing them to use these pixel materials to construct the world they desire, often used to recreate classic buildings or landscapes.

Due to its highly free gameplay and innovative creative mode, Minecraft has gradually become a favorite among players. With the help of social platforms, countless players have begun to share their constructions and ideas, allowing Minecraft to influence even more people.

Today, Minecraft has become a globally recognized game with over 100 million monthly active users, marking an important milestone for sandbox games and making sandbox games a beloved genre among players.

The built-in games of The Sandbox are quite similar to Minecraft, where players can first purchase land in The Sandbox and then create a pixelated game on that land. The Sandbox also provides creators with a set of tools to unleash their imagination and create their own worlds.

However, unlike Minecraft, The Sandbox is driven by blockchain technology, which decentralizes digital items into non-fungible tokens (NFTs), meaning that everything in The Sandbox is a valuable asset.

Therefore, while The Sandbox appears to be a sandbox game, it has already diverged significantly from Minecraft, becoming a more immersive digital world built on the foundation of sandbox games. Here are several directions to better understand the differences between The Sandbox and Minecraft.

First, in The Sandbox, any player can 100% own their creations and can turn their creations into NFTs, uploading them to the market for others to purchase, or they can offer their created games for others to play and earn from them.

In contrast, there are very few ways for players to make money in Minecraft, most of which are through live streaming, recording, and creating related videos outside the game. Only a few top technical teams can earn money by writing various mods, researching the latest technologies, and promoting them, or by forming professional building teams to take on large construction projects. Most people are still creating out of love, having skills but unable to derive value from them.

Blockchain technology not only brings digital value to The Sandbox but also ushers in a spring of monetization for content creators.

Second, The Sandbox has a complete token economic system that closely integrates players with the overall development of The Sandbox. Players are no longer just playing games; they live like indigenous people in a digital world, benefiting from the development of this city.

As more and more people join The Sandbox, whether it is the token representing The Sandbox or the value of virtual land within it, both will rise with the tide.

This is akin to buying a house in Beijing, where the appreciation of property prices represents the dividends of urban development, and we directly enjoy these dividends. However, in Minecraft, there is no such effect. In Minecraft, the more players there are, the less impact it has on players economically.

Third, in The Sandbox, players can freely dispose of their digital assets; I am free to do anything with my personal assets. In contrast, a centralized game like Minecraft has a characteristic where the entity behind it has absolute authority over the product. Even if players spend money and effort on it, they do not have the dominant power.

This can be intuitively felt from the contents of Minecraft's end-user license agreement.

MINECRAFT End User License Agreement

One important provision is that unless we explicitly agree, you may not distribute any content we create. "Distributing any content we create" means:

Providing copies of our game to any other person;

Using any content we create for commercial purposes;

Attempting to make money through any content we create; or

Allowing others to access any content we create in an unfair or unreasonable manner;

This is understandable for the operators of Minecraft, but on the other hand, it shackles the greater possibilities of the sandbox world. The autonomy granted to The Sandbox by blockchain technology gives users wings of imagination, making the differences between the two clear.

Thus, although Minecraft currently leads in total user numbers, recognition, and activity, The Sandbox has just surpassed 2 million users, but its economic effects have already exceeded $300 million, with a clear flywheel effect.

The Sandbox is gradually being recognized by more and more celebrities and companies, collaborating with them, and its future development potential is limitless.

What does The Sandbox carry?

As we described above, although The Sandbox is still far behind Minecraft, which is pursued by mainstream global gamers in terms of entertainment and user volume, we need to see what new things The Sandbox has brought us and why it has suddenly become popular after years of silence. We will explore the significance behind The Sandbox from three directions.

◉ The digital world has "ownership"

The future digital world will also have geographical divisions, and The Sandbox aims to represent land ownership in the digital world.

First, we need to see that the most intuitive utility of The Sandbox is to anchor the ownership and value rights of land in the digital world. It is important to note that there is currently no value description for virtual land in the digital space or the internet world. Apart from the "boundaries" in games, most land is just a concept, and ownership is merely a piece of paper.

Therefore, The Sandbox, with its blockchain characteristics, can naturally monetize land ownership, rather than being a piece of land that can be copied and pasted at will on the internet. When the uniqueness and immutability of blockchain are superimposed on The Sandbox, the chemical reaction it brings is akin to when Marx wrote "Capital" years ago—labor value is recognized.

As we compared The Sandbox with Minecraft earlier, it is because of the concepts of tokens and NFTs that we can truly own a piece of land, a prop, or a jpg in The Sandbox.

We believe this pioneering approach will bring innovation to games and the digital world, allowing players to no longer just be participants in a game but also builders and even leaders. The introduction of decentralization into the gaming world by The Sandbox has also catalyzed the emergence of the metaverse, earning it the reputation of a metaverse game and recognition from capital.

◉ Opening up new marketing methods in the digital world

Perhaps people will wonder why more and more Fortune 500 companies are buying land in The Sandbox. Behind this is not only some commercial hype but also the giants seeing new opportunities. After all, when NFTs or digital collectibles become a popular marketing method among young people, a major brand must seize the minds of users.

As NFTs, digital collectibles, DAOs, Crypto, and Web 3.0 become more ingrained in people's minds, all business observers will see a new singularity, and the proximity of this singularity will influence decision-makers to take action.

Imagine if The Sandbox reaches a monthly active user base of tens of millions in the future. Players who entered this field early will benefit from the appreciation of land, and they will also have a good reputation for entering this new digital world early. This includes both investment value and brand utility value, so the combination of the two will inevitably win some brands' attempts. After all, compared to the marketing costs that can reach hundreds of millions, laying out a piece of land in The Sandbox is just a drop in the bucket.

Of course, if we view The Sandbox as a small metaverse space, brand merchants have already become the first batch of advertisers in the metaverse. This is akin to the companies that first placed internet ads years ago; those who dare to take the plunge will undoubtedly attract more attention.

As Lindsey, the global head of technology and innovation at AB InBev, said, "The future of sports, media, and entertainment is virtual. About 2.5 billion people are already participating in the virtual economy. This is the direction of the world's evolution. Undoubtedly, just like in the real world, brands need to find a foothold in the virtual parallel world."

◉ Becoming the true beginning of the metaverse

When people talk about the metaverse, they not only discuss VR and AR virtual reality worlds but also the metaverse layout brought about by blockchain, which inevitably involves The Sandbox and Decentraland. They have pioneered a decentralized metaverse form. Although some visuals may seem awkward and some games may lack playability, they stand at the beginning of a new era.

This beginning is akin to Columbus crossing the Atlantic in the 15th century to discover the Americas. Although the new continent is filled with backwardness and ancient civilizations, the collision of culture and the new world is the root of development and its symbolic advantage. Coincidentally, The Sandbox happens to be a virtual continent, a blank space that we later arrivals need to fill.

Some may say, "The metaverse can be built without blockchain." We cannot absolutely deny such statements, as Facebook's rebranding to Meta also stirred up great waves. We can only say that a metaverse supported by blockchain is the true digital world; otherwise, it is merely a transition from a two-dimensional internet to a three-dimensional one, a superficial improvement.

Therefore, the "P2E" (Play to Earn) model pioneered by The Sandbox allows players to truly "live" in the digital world, rather than just playing games.

The development path of The Sandbox seems to validate the transition from the internet to blockchain, and now they stand on the broad avenue known as the next generation of the internet. We should embrace Columbus's enthusiasm and rebuild another world on this new continent.

What might be the final form of The Sandbox?

Since we have discussed the current significance of The Sandbox, what direction will it take in the future?

We believe The Sandbox is highly likely to become a real estate developer and advertising service provider in the metaverse, and it may also have the potential to become a giant in the metaverse gaming industry.

First, as a metaverse real estate developer, this goal seems to be getting closer, as more and more mainstream brands have purchased land in The Sandbox, and its transaction volume has been rising. According to a Messari report, The Sandbox's land sales exceeded $350 million in 2021. Of course, compared to traditional real estate, this figure may not even match the land sales of a second-tier city, but it also indicates that there is still considerable room for the future development of virtual land.

Secondly, regarding advertising services, if The Sandbox can effectively utilize its land and link part of the development rights and sales to the land, it may bring a huge impact to advertising services in the digital world. At the same time, with the enhancement of its games, various traffic entrances will also become excellent advertising sales locations. However, the final marketing choice may still lie in the hands of users, as a metaverse scene filled with advertisements may not be appealing.

Finally, returning to its essence, The Sandbox still defines itself as a gaming company, continuously launching alpha games, which has become a trigger for user growth. Although the global registered user base of 2 million still seems limited, once the "flywheel" starts turning, it will not stop.

Of course, The Sandbox's gene determines that it will not follow a single main line. This is also the reason why its team has been continuously innovating since its inception. If 2021 was the "hype year" for The Sandbox's virtual land, then 2022 will require more games to wrap around itself.

As for where The Sandbox will ultimately head, perhaps the development of the metaverse will tell us the answer.