Inventory of top crypto VCs' layout in "3A chain games," who can carry the banner of Gamefi?
"Most P2E games are overhyped, and they are not fun to play."Author: The Way of DeFi
Such views are prevalent in the current crypto industry, and as a result, many traditional gamers remain skeptical about Gamefi. Currently, the playable blockchain games on the market are mostly at the level of 4399 mini-games, so this criticism is justified.
We know that in the traditional gaming field, there is a concept of AAA games, which generally refers to high-quality games that are developed at a high cost, with long development cycles and significant resource consumption, to the extent that they could potentially bankrupt a company. For example, the development costs of well-known single-player games like The Witcher 3 and Grand Theft Auto IV are close to 100 million dollars, and a development team of nearly a thousand people may take 3-5 years to create a fun AAA game.
In the past year, crypto VCs have not stopped investing in this sector despite the negative voices surrounding blockchain games. Some project teams have begun to invest significant resources to create "AAA blockchain games," attempting to change players' perceptions of blockchain games.
Recently, Vance Spencer, co-founder of Framework Ventures, tweeted:
"In the next 5 years, there may be about 1,000 AAA crypto games on the market. Conservatively speaking, 10% of these games will succeed, meaning 100 games will be successful, and each will bring in 1 million MAU (the average scale of a decent F2P game). Conservatively, there will be 100 million new crypto users, and this is not complicated."
It is reported that Framework Ventures plans to allocate half of its third crypto fund (200 million dollars) to invest in the rapidly growing blockchain gaming sector.
So, which "AAA blockchain game" teams should we pay attention to in the coming time?
"AAA Blockchain Games" and "Quasi-AAA Blockchain Games"
To create a fun AAA blockchain game, developers will inevitably need to raise a large amount of funding for development (whether through VC private placements or through NFT or token public offerings). Looking at the traditional gaming sector, teams that manage to raise over 50 million dollars may barely squeeze into this category. However, in the entire Gamefi field, there are currently only a few teams that meet this standard.
Blockchain game projects with funding between 10 million to 50 million dollars can be referred to as quasi-AAA blockchain games. If their subsequent development goes smoothly, these game developers may be able to increase their game development through further financing.
What are the AAA blockchain game teams?
1. Animoca Brands
In January this year, metaverse game developer Animoca Brands announced the completion of a 358.8 million dollar financing round, led by Liberty City Ventures, with participation from 10 T Holdings, Gemini Frontier Fund, ParaFi Capital, Provident, Sequoia China, Soros Fund, Winklevoss Capital, and others, resulting in a post-investment valuation of 5 billion dollars. According to data provided by Crunchbase, Animoca Brands has raised a total of 1.3 billion dollars to date.
Animoca Brands' blockchain game products include REVV Motorsport, REVV Racing, The Sandbox, Phantom Galaxies, etc. Currently, The Sandbox is Animoca Brands' flagship game, but it may not fully meet the definition of an AAA blockchain game. Among its remaining products, only Phantom Galaxies is described as an AAA blockchain game. According to the roadmap, Phantom Galaxies will launch NFT avatars in the second quarter of this year and plans to release an early test game in the third quarter of this year, although delays are also possible.
2. Forte
In November last year, blockchain gaming platform Forte announced the completion of a 725 million dollar Series B financing round led by Sea Capital and Kora Management, with other notable investors including Animoca Brands, Warner Music, Tiger Global, Andreessen Horowitz (a16z), Cosmos, Polygon Studios, and Solana Ventures, bringing the company's total financing to 910 million dollars.
However, unlike typical blockchain game companies, Forte is not a game production company but an infrastructure company that provides services to game developers, helping them transition to blockchain gaming.
Therefore, although Forte has reached AAA standards in terms of resources, whether it can launch an AAA blockchain game remains unknown.
3. Sorare
In September last year, NFT football game developer Sorare announced the completion of a 680 million dollar Series B financing round, bringing its project valuation to 4.3 billion dollars. This round was led by SoftBank, with participation from several football stars. According to Sorare's official website, it has now formed formal partnerships with 245 football clubs, including Real Madrid, Liverpool, and Juventus. According to Crunchbase data, Sorare's total financing has reached 739 million dollars to date.
Currently, Sorare only offers a fantasy football game, but it already has the strength to launch an AAA blockchain game.
4. Dapper Labs
In 2017, the launch of the game CryptoKitties introduced people to the charm of blockchain games, and the development team behind this game, Dapper Labs, gained the attention of investors. To date, Dapper Labs has completed financing of 607.5 million dollars, with major investors including Coatue, A16z, and Google Ventures. NBA superstar Michael Jordan has also participated in Dapper Labs' investments, largely due to its launch of the NBA Top Shot sports collectible game. Additionally, Dapper Labs is attempting to expand into sports fields like UFC and rugby, but these projects have not reached the height of NBA Top Shot's influence.
In the NBA sports sector, Dapper Labs is fully capable of launching an AAA blockchain game. According to recent plans, Dapper Labs will launch a mobile game called Hardcourt, where users will be able to use Moments from their NBA Top Shot accounts to play.
5. Yuga Labs & Improbable
The parent company of "Bored Ape," Yuga Labs, completed a 450 million dollar seed round financing in March this year, led by A16z, with other notable participating institutions including FTX, Animoca Brands, and MoonPay.
Yuga Labs' next focus is to create a metaverse game project called Otherside, and the developer behind this game, Improbable, is another metaverse gaming company worth watching.
According to Crunchbase data, Improbable has raised 604 million dollars to date, with investors including A16z, SoftBank, and DCG.
Recently, Improbable CEO Herman Narula stated that during the early development of Otherside, they successfully tested the interaction of over 15,000 people in a virtual space using Improbable's M2 technology.
Currently, Otherside is still in the very early stages of development, and the game may not be released until next year.
6. Sky Mavis
Axie Infinity, as a phenomenal project in the blockchain gaming market, once achieved a daily active user count of over 2.6 million. However, after its Ronin sidechain was hacked for over 600 million dollars, Axie Infinity has shown signs of declining popularity. Recently, Sky Mavis, the developer behind Axie Infinity, completed a 150 million dollar investment led by Binance, with participation from Animoca Brands, Paradigm, and a16z. It is reported that this round of financing will be used to compensate users who lost funds in the attack.
According to Crunchbase data, Sky Mavis has completed a total of 311 million dollars in financing, and it has only announced Axie Infinity as its blockchain game product. So, does Sky Mavis have the energy to create another AAA blockchain game? The possibility is not zero.
7. Illuvium & Immutable
Illuvium has raised 43 million dollars through private placements and IDOs, and its token's FDV currently exceeds 4.4 billion dollars. As the most anticipated AAA blockchain game on the Immutable X platform, Illuvium has undergone a year of development and is still in the private beta testing phase, with only a few invited players able to test a limited gaming experience.
According to the official roadmap, Illuvium's public beta game testing will be released in the second quarter of this year, and the mobile game will be released next year. Additionally, Illuvium will also increase its development budget by selling game land.
It is worth mentioning that Immutable, as a partner, has raised 279 million dollars to date, with investors including Temasek, Tencent, Animoca Brands, and Alameda Research. Therefore, the resources available for Illuvium as an AAA blockchain game should not be underestimated.
8. Parallel
In October last year, the NFT sci-fi card game Parallel completed a 50 million dollar financing round led by Paradigm, with other investors including YouTube co-founder Chad Hurley, Focus Labs, OSS Capital, and Yunt Capital.
According to the official website, Parallel aims to create a AAA-level TCG card game. It has completed three card drop sales, and with a 10% royalty cut from the secondary market, Parallel currently has over 80 million dollars available for development.
It is reported that the Parallel blockchain project started in the first quarter of 2021 and has been in development for nearly a year. It is still in internal testing, and developers estimate that Parallel may only launch an initial playable game by the end of this year, with a possibility of being delayed until early 2023.
What are the quasi-AAA blockchain game teams?
1. SIDUS HEROES
In December last year, the metaverse blockchain game project SIDUS HEROES announced the completion of a 20 million dollar financing round, with participating institutions including Animoca Brands, Polygon, OKEx Blockdream Ventures, Arkstream Capital, Spark Digital Capital, AU21 Capital, and HashKey.
SIDUS HEROES, as a space-themed MMORPG, launched its experience testing version in January this year. Its game utility token SIDUS has an FDV of 200 million dollars, having dropped 96.4% from its peak, which may be largely related to the game testing experience not meeting expectations.
2. Big Time
In May last year, the blockchain game Big Time completed a 21 million dollar financing round, created by the former CEO of Decentraland, with participating institutions including FBG Capital, DCG, OKEx Blockdream Ventures, Alameda Research, and LD Capital.
From the currently released game videos, Big Time is somewhat similar to MMORPGs like World of Warcraft. It is worth mentioning that Big Time's tokens will not be sold in any way but will be entirely earned through gameplay.
3. Star Atlas
The interstellar battleship game Star Atlas, based on the Solana blockchain, completed several rounds of financing last year. According to data provided by Crunchbase, Star Atlas has raised a total of 10 million dollars to date, with participating institutions including Animoca Brands, Serum, MoonWhale Ventures, and FTX.
Star Atlas has gained significant popularity due to its high-quality game trailers. As of now, the FDV of Star Atlas's game token ATLAS is 570 million dollars, having dropped 94.1% from its historical peak.
Star Atlas has only released a minimal viable web game for players and collectors to use or trade game assets.
For Star Atlas to truly launch a blockchain game that meets the standards of its trailers, it may require several years of development time, and whether its current financing is sufficient to support the development of a movie-quality AAA blockchain game is currently in doubt.
This may also be a common pitfall for most so-called "AAA blockchain games."
4. Ultiverse
In March this year, the blockchain game Ultiverse announced it had raised 4.5 million dollars in seed funding led by Binance Labs and Defiance Capital, with other investors including Three Arrows Capital and SkyVision Capital. Subsequently, Binance Labs announced an additional investment of 5 million dollars in Ultiverse.
Currently, Ultiverse is still in a very early stage, and it will be the first AAA blockchain game in the BNB ecosystem, so it is worth keeping an eye on.
5. Ascenders
In April this year, the sci-fi action RPG blockchain game Ascenders, based on Avalanche, announced the completion of a 6.4 million dollar private placement financing round led by Paramount Capital, Sino Global Capital, and Three Arrows Capital, with other participating institutions including DeFiance Capital and Blizzard Fund.
Currently, Ascenders only offers a game demo for testing, and like Ultiverse, this blockchain game is also in a very early stage, so it is worth keeping an eye on.
The Layout of Top Crypto Investment Institutions in AAA Blockchain Games
By observing the financing situations of the aforementioned Gamefi projects, we can see that well-known top crypto investment institutions like A16z, Paradigm, Three Arrows Capital, Binance Labs, and FTX (Alameda Research) have invested in some AAA blockchain games. Additionally, the game development company Animoca Brands frequently appears in the investment lists of blockchain game projects.
For example, A16z has invested in blockchain game teams like Forte, Dapper Labs, Yuga Labs & Improbable, and Sky Mavis. Paradigm has invested in Sky Mavis and Parallel, Three Arrows Capital has invested in Ultiverse and Ascenders, Binance Labs has invested in Sky Mavis and Ultiverse, and FTX (Alameda Research) has invested in Yuga Labs, Big Time, and Star Atlas.
Apart from Yuga Labs and Sky Mavis, which are currently popular blockchain game teams that have received attention from 2-3 top crypto investment institutions, the other blockchain games mentioned are mostly projects managed by top investment institutions (Note: If every public chain has an AAA blockchain game representative, then the projects supported by these institutions are likely to become hotspots).
Currently, games like Big Time, Illuvium, and Phantom Galaxies are expected to open to players this year, while Parallel, Otherside, Ultiverse, and Ascenders will likely need to wait until next year.
Some Simple Views on Blockchain Games
From the current situation, the scale of investment by crypto investment institutions in blockchain games is second only to public chain infrastructure. As Layer 2 and DA (data availability) solutions mature, blockchain games with high performance requirements will have the potential for large-scale expansion (going mainstream).
We know that during the last crypto bull market cycle, Axie Infinity, a blockchain game with poor playability, became a phenomenal blockchain game product due to its excellent token model design, sparking a wave of Play to Earn. However, such games are essentially more financial games, downplaying the fun of the game itself. Currently, some AAA blockchain game teams are starting to improve game quality based on Play to Earn gameplay to attract more gamers into the crypto space.
Additionally, as the culmination of the metaverse narrative, blockchain games can simultaneously encompass the three fundamental elements of crypto: DeFi, NFT, and DAO.
However, we need to understand that a fun crypto game cannot be developed overnight, and the more glamorous the trailer of a blockchain game project, the more cautious we should be. The reason is that the implementation difficulty of such projects is also extremely high, and there is a significant possibility that the project team may fail to deliver a satisfactory game or that the waiting time will be very long.
We also need to understand that currently, any so-called AAA blockchain game essentially does not belong to a pure blockchain game, but this does not hinder their path to mainstream success.
In summary, the blockchain gaming sector will continue to be a focal point in the crypto space. Which blockchain game projects do you think are likely to dethrone Axie Infinity from the Gamefi throne?
