How does Animoca Brands, a down-and-out game company, rely on NFT to counterattack?

The wave of NFT and the Metaverse has led to the emergence of a large number of new business entities, including the well-known chain game Axie Infinity, and the NFT project Bored Ape Yacht Club.

Among the new projects, a slightly old company stands out. Animoca Brands was established in 2014 and initially focused on mobile game development and distribution. It was listed on the Australian Stock Exchange, but was subsequently delisted. When the dividend period of mobile games declined, the company was unable to make ends meet for a long time, and even had to expand its e-book business for a while.

It is such a company that has rewritten its fate with the help of NFT and has become the hottest giant in the NFT field. Its blockchain games include “The Sandbox”, “Crazy Kings” and so on. Previously, it was an early investor in NFT star projects such as Axie Infinity developer Sky Mavis, Decentraland, Dapper Labs (NBA Top Shot).

In the past year, Animoca Brands has successively completed several huge financings ranging from tens of millions of dollars to hundreds of millions of dollars, and its valuation has also grown from $1 billion to $5 billion.

This legendary counter-attack story is not accidental. The uniqueness of Animoca Brands is that it paid special attention to IP-licensed games at the beginning of the development of mobile games, and developed licensed mobile games such as “Garfield”, “Doraemon” and “Ultraman”. During the transition to NFT, it continued to obtain IP copyrights in sports such as Formula 1, the American Professional Baseball League, and the Bundesliga through cooperation, acquisitions, etc., and developed chain games such as F1 racing F1 Delta Time. Not long ago, its subsidiary also cooperated with the International Olympic Committee to release the Beijing Winter Olympics-themed chain tour, and released Olympic series NFTs such as Bing Dun Dun.

It can be said that the dedication to popular IP and the accumulation of IP resources have enabled Animoca Brands to quickly seize the opportunity in the NFT wave and complete the counter-attack transformation. And it is also giving back in the form of investment and creation, promoting the advancement of NFT and the Metaverse.

Animoca Brands is expected to receive huge investment in a row 

If there were a list of unicorns emerging from the wave of NFTs and the Metaverse, Animoca Brands would be on the list.The Hong Kong-based company started out as a lesser-known traditional mobile game developer. It was listed on the Australian Stock Exchange through a backdoor, but was eventually delisted due to issues such as internal governance and trading violations.

Mobile games entered the dividend period and declined. Animoca Brands had experienced a difficult time, and the emergence of NFT and the Metaverse rewrote its fate.

The relationship between Animoca Brands and NFT began in 2018. Back then, when the first-generation blockchain game called Cryptokitties became very popular, Animoca Brands, which was in transition, saw the potential of this market. It authorized the development team of Cryptokitties and was allowed to exclusively distribute Cryptokitties in China and get a share.

Although this cooperation is not very profitable, Animoca Brands sees a broad space for NFTs. Yat Siu, co-founder and executive chairman of Animoca Brands, said at the time the company had a strategy that digital property rights would revolutionize the industry in the future by expanding financial inclusion, and this important change would begin in NFTs are used in the game.

Since then, Animoca Brands has entered the NFT field in all aspects. In August 2018, Animoca Brands acquired the sandbox mobile game “the Sandbox” developed by Pixowl and built it on the blockchain. Through this virtual sandbox world, Animoca Brands entered its NFT world.

Two years later, NFT has become one of the hottest topics in the blockchain circle, and a large number of NFTs have completed transactions at sky-high prices. Subsequently, chain games with NFT as the key underlying element became popular, and “The Sandbox”, which had an early layout and accumulated a large number of users, broke out smoothly and became one of the most popular chain games.

How does Animoca Brands, a down-and-out game company, rely on NFT to counterattack?

The Sandbox game poster

In November last year, Zheng Zhigang, CEO of Hong Kong New World Development Co., Ltd., announced that virtual land would be built in “The Sandbox”. In February, luxury brand Gucci announced that it had purchased virtual plots in The Sandbox. In addition, some sports brands including Adidas have also settled in this virtual world.

The acquisition of The Sandbox is one of Animoca Brands’ most successful investments in the NFT space. One of the reasons is that Animoca Brands has long ceased to be a pure game manufacturer, and has brought many classic investment cases as an investor.

In 2018, Animoca Brands invested in the Metaverse project Decentraland and NFT development company Dapper Labs (which created the well-known product NBA Top Shot), and in 2019, it completed a $1.465 million investment in Axie Infinity developer Sky Mavis. In addition, Animoca Brands has also acquired NFT-related companies such as NFT marketplace QUIDD, sports NFT ecosystem lympo, independent game developer Blowfish Studios, and NFT solution provider Bondly.

The smooth sailing in the NFT field has allowed Animoca Brands to win the favor of a large amount of capital, and its valuation has been soaring.

In May last year, Animoca Brands completed a $88.88 million financing at a valuation of $1 billion. Investors include Kingsway Capital, RIT Capital Partners, AppWorks Fund, etc.; 5 months later, the company completed another $65 million in financing, Investors include Liberty City Ventures, Ubisoft Entertainment, Sequoia China, and currency upstart Justin Sun.At this point its valuation has risen to $2.2 billion.

In January this year, Animoca Brands received another $358.8 million in financing, led by Liberty City Ventures, with participation from 10T Holdings, Gemini Frontier Fund, ParaFi Capital, Provident, Sequoia China and Winklevoss Capital, with a post-investment valuation of $5 billion Dollar.

According to people familiar with the matter, after this round of investment, many investment institutions such as private equity giant KKR still expressed strong interest in Animoca Brands, hoping to make additional investment to increase the financing amount of this round of nearly 359 million US dollars to 500 million US dollars. Animoca Brands executives told existing investors they plan to raise a new funding round as soon as this year that would value Animoca at $10 billion.

Seize IP authorization Animoca Brands borrows NFT to counterattack

The story of reversal is always the most fascinating. Animoca Brands has described a legendary journey from a traditional game manufacturer that suffered delisting to a unicorn in the field of NFT and Metaverse. But success is never accidental. Why Animoca Brands can seize the NFT outlet and complete the layout ahead of schedule is closely related to its genes.

Back in 2014, Animoca Brands was just established. At that time, mobile devices such as mobile phones and tablets ushered in a golden era of development, and people’s demand for mobile games reached an unprecedented height. At the beginning of its establishment, Animoca Brands was mainly engaged in the development and distribution of mobile games. In the mobile game boom, the company’s early development was relatively smooth, and it was listed on the Australian Stock Exchange through a backdoor listing in 2015. At that time, the cumulative downloads of the company’s 170 games exceeded 160 million.

Animoca Brands has a special principle in the creation of mobile games, that is, it pays special attention to IP-licensed games, especially popular IPs with global popularity. For example, the company licensed Garfield and all supporting characters from the Jim Davis comic series from Paws. The “Garfield” series of mobile games was developed by Animoca Brands, and the number of downloads quickly exceeded 30 million after its launch. The company has also licensed Doraemon, Ben 10, Astro Boy and Ultraman Mobile Games.

How does Animoca Brands, a down-and-out game company, rely on NFT to counterattack?

Animoca Brands has created a number of IP-licensed mobile games

Focusing on global popular IP for game creation makes Animoca Brands unique in the field of mobile games. Focusing on the production of licensed games from the fields of TV or comics, the company has accumulated rich experience in IP cooperation and laid the foundation for its subsequent layout in the NFT game track.

Unlike today’s scenery, Animoca Brands fell into a passive development between 2015 and 2018. Due to the increasingly fierce competition in mobile games, Animoca Brands has spent a lot of costs in obtaining IP licenses and developing games, making it unable to make ends meet for a long time. As of the fourth quarter of 2017, its quarterly operating cash flow has been negative. The company’s stock price fell by more than 95% at one point.

At this point, transformation has become a necessary step. Therefore, in 2018, Animoca Brands acquired the well-known game IP “the Sandbox” and entered the NFT world, which became a watershed in its destiny.

In 2020, the ASX removed Animoca Brands from its listing due to internal governance issues, involvement in crypto activities, and trading irregularities. However, Animoca Brands, after delisting, took advantage of NFT to soar into the sky.

During the period of focusing on the NFT field, Animoca Brands still maintains the characteristics of focusing on IP. It has obtained IP copyrights in sports such as Formula 1, American Professional Baseball League, and Bundesliga through cooperation and acquisition, and has developed the F1 racing class F1 Delta. Time and other chain tours.

In 2021, Animoca Brands will increase its investment, investing in well-known projects such as Yield Guild Games, Bloktopia, GuildFi, ConsenSys, DeHorizon, etc., and cooperate with Binance Smart Chain (BSC) to launch a $200 million investment plan to Accelerate and incubate early stage crypto gaming startups.

It is worth noting that the recently launched Beijing Winter Olympics-themed chain game “Olympic Games Jam: Beijing 2022” was also developed by nWay, a subsidiary of Animoca Brands. Inheriting the company’s IP-heavy genes, this game is officially authorized by the International Olympic Committee. A number of Olympic-themed NFTs have been released, including the Beijing Winter Olympics mascot BingdunDun NFT, which has been well received by the market.

It can be said that the dedication to popular IP and the accumulation of IP resources have enabled Animoca Brands to quickly seize the opportunity in the NFT wave and complete the counter-attack transformation.

Although it has invested in nearly 200 NFT-related projects, Animoca Brands has not forgotten its “old business”. Judging from its product plan, Animoca Brands also has a number of NFT games that have been listed or are about to be listed, including “Crazy Kings”, “Crazy Defense Heroes” and so on. In addition, the 3A-level blockchain TPS game “Phantom Galaxies” created by it is highly anticipated by the outside world. When most chain games lack playability and quality, Animoca Brands tries to bring high quality to the blockchain by relying on years of accumulation game.

Since its establishment in 2014, Animoca Brands has gone through a long period of 8 years, which is full of twists and turns and difficulties. During the downturn, the gaming company even tried to expand into e-books and other businesses.Looking back, the wave of NFT has rewritten its destiny, and it is also giving back in the form of investment and creation, promoting the advancement of NFT and the Metaverse.

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