Weak market slashes Animoca’s web3 funding target to $1B

Pokemon on Fortnite, Gala Games’ deleted tweet on The Rock deal, plus more top stories

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Metaproof Team
January 12, 2023

🎮 Metaproof Gaming

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📲 By the numbers

  • The total addressable market for the metaverse economy could grow to between $8 trillion and $13 trillion by 2030, with gaming as a key use case in the years to come due to the immersive and multiplayer experience. (Source)

  • The Cointelegraph Accelerator seeks to boost web3 startups. It will leverage the expertise of the global team of more than 150 people working and developing media products in 11 languages, targeting GameFi, DeFi, NFTs, web3 social, cross-chain and layer-2 solutions, and other segments of the broader web3 space. (Source)

📫 News & trends

Fortnite maker Epic Games is quite the royalty of in-game collaborations, as shown by the sheer amount of licensed characters in its flagship video game, from Dragon Ball Z to Naruto to Star Wars. Now a recent Fortnite video appeared online and featured Ash, Pikachu, and Charizard from Pokemon - a fan-made video, but just the same sparked speculations about a potential collaboration.

Inverse offers three reasons it could happen:

  1. It would print money, with the Pokemon series a likely profitable venture for Epic Games given its immense popularity

  2. It’s the perfect Ash sendoff, given how his story arc in the show has finally ended after 25 years

  3. There are plenty of anime collab precedents, making it highly plausible for Pokemon to join the fray

Gaming platform Animoca Brands hopes to raise a slimmed-down target of $1B in the first quarter of 2023 - a fund that will be used toward web3 and metaverse investments. The amount is a seeming departure from the $2B commitment made in November, thought to be an adjustment due to a fragile market suffering from the aftermath of the FTX meltdown and significant losses in the crypto market. Previously, Animoca CEO Robby Yung disclosed to Nikkei that the company intended to establish a $2B fund, fueling ambitions to go global while supporting mid to late-stage web3 startups. According to Nasdaq, Animoca Brands executed the most metaverse deals in 2022, spanning support organizations, open metaverse platforms, and web3 game producers.

Web3 gaming executive Alex Connelly, who heads technology at blockchain company Immutable, tells Cointelegraph that new innovations in artificial intelligence (AI) will make the gaming genre better than it has ever been. According to him, OpenAI - an AI-focused American research laboratory focused on developing friendly AI applications that can assist with a variety of tasks - will allow new possibilities for web3 games. This will lead developers to create better art, more challenging encounters, and superior narration, giving players a more immersive and richer experience.

Web3 gaming company Gala Games have recently made headlines as its native token GALA’s price climbed by nearly 60% in one day after announcing its partnership with Hollywood stars Dwayne “The Rock” Johnson and Mark Wahlberg in producing films for their ecosystem. The partnership will include Gala Music and Gala Films, as well as discussions around the potential uses for the blockchain in the industry, such as incorporating QR codes on movie tickets and for digitally redeeming items via platforms like Netflix. The cryptocurrency sustaining its increase over the last few days and moving further to the upside remains to be seen, particularly if it will make its way to $1.

Gala Games’ Monday tweet that the company was working with Dwayne "The Rock" Johnson and Mark Wahlberg helped lift GALA over 70% to $0.051, the highest since Sept. 13, CoinDesk data reflect. However, the company deleted the tweet without any explanation, and the token is now more than 20% lower at $0.039 as of this writing. Crypto followers on Twitter weighed selling the token after the tweet deletion, which came without an explanation.

As the metaverse hype cycle wanes, marketers are likely to target technologies and techniques that beef up their plans and strategies. In the gaming space, the rise of the influencer is heavily predicted, and 2023 is thought to be the year that marketers embrace partnerships with gaming influencers even without obvious direct ties to the gaming community. The gamers’ main platform might be Twitch or another streaming service, yet they usually have a following on Instagram, Facebook, or other social media platforms. Non-gaming brands like Samsung, Red Bull, and Hershey have partnered with Ninja, the most followed gaming streamer on Twitch.

Ah, metaverse gaming - the digital world we inhabit via colorful characters and rich plotlines, with in-game rewards to boot. Among the hottest metaverse games in 2023 is Illuvium, an open-world role-playing game currently under development and showcases creatures called Illuvials, which resemble deities and might be as powerful and dangerous. My Neighbor Alice lets players purchase and maintain virtual farms or islands in a multiplayer builder game that’s structured similarly to Farmville. Players can also trade My Neighbor Alice NFTs such as plants, animals, houses, clothes, and decor. Don’t sleep on the role-playing fantasy game Chain of Alliance, too, with its customizable monsters and NFT value first released in 2020.

In 2022, blockchain games made headlines while the decentralized finance (DeFi) space struggled, a trend that has continued even at the start of 2023. An innovation in the video gaming genre, blockchain games differ from traditional games by allowing players to convert points into real money. Time spent playing is also rewarded in this ecosystem, where unique active wallets (UAW) also figure into the business model’s success. In blockchain gaming, UAW continues to rise and reaches almost one million daily wallets. At the start of 2022, GameFi accounted for over 50% of activity in the blockchain space, with Polygon, Harmony’s DeFi Kingdom, Axie Infinity, and Splinterlands as some of the best-performing protocols.

Three significant innovations are defining the future of immersive gaming. First is enhanced player ownership and portability, where experts say every game studio should provide ownership of the digital assets to their holders. A case in point: QORPO Game Studio’s free-to-play shooter game Citizen Conflict leveraging NFTs to fortify the player-centric gaming experience. Players acquire characters, masks, as well as weapons - all individual NFTs - as they battle it out in the dystopian metaverse. Second is NFT marketplaces and monetization, with the rise of new revenue models for players and game developers and an entire buy-and-sell system done peer-to-peer on NFT marketplaces, thus creating a new wave of secondary trading. Finally there are decentralized autonomous organizations (DAOs) for gaming communities, which may take center stage in determining how gaming ecosystems make community decisions.

Lithosphere, a network for cross-chain applications, will use the TRON network for its Finesse play-to-earn game and the upcoming NFT collection from the game. Lithosphere developer KaJ Labs announced the P2E game series with two chapters, “Shadow Warriors” and “The Kingdom,” for a multiplayer gameplay with mixed RPG elements. The next Finesse NFT Warriors collection, too, will showcase 50,000 unique characters and items, with only 25,000 items available for minting. Lithosphere claims to be the first blockchain to utilize embedded deep neural networks to make smart contracts intelligent, while enabling interoperability across diverse blockchains.

Despite the allure of play-to-earn, blockchain games should be first and foremost all about the gaming experience. Multiplayer survival strategy game Gold Fever takes this to heart as it offers lush graphics and immersive gameplay in its fictional jungle wilderness inspired by the events unfolding during the real gold rush at the turn of the last century. Adventurers explore the wilderness and battle to survive amid the rough, hostile environment. The reward: the in-game currency NGL. Through earning commercial NFTs - which serve both gameplay and generating wealth for players beyond the game - gamers maintain full ownership over their in-game assets, earning money while contributing to the game’s economy.

Deep tech startup Brelyon has partnered with American esports organization Velocity Esports to bring its Ultra Reality displays to esports arcades. Immersive display technologies for gaming and esports enthusiasts have faced bottlenecks around content compatibility and user experience, noted the company in a press release. Brelyon invented Ultra Reality as ultra-immersive display technologies that makes it possible to game on a massive 120-inch plus curved display. Brelyon displays are promoted as backward-compatible with existing games and content. Expanding nationwide, Velocity locations feature state-of-the-art esports lounges with the latest technology and professional-level gaming chairs; a wide selection of arcade games and prizes; and over 100 titles for esports and PC and console gaming.

GameFi hosted its Year-End Party for Christmas 2022, which it extended until January 10, 2023. The goal: to connect good games and players, and provide a place for people to enjoy themselves during the crypto winter of 2022. Co-hosted by GameFi and BNB Chain, the event was open to all game players and enthusiasts of web3 technology. They featured a selection of high-quality games and metaverse experiences before a large player base and supportive communities. Different missions took place for both player realms and social realms, and players participated as individuals, teams, or guilds competing for rewards that included cash prizes of up to $15,000, valuable tokens, and NFTs.

💸 Finance buzz

  • Bengaluru-based gaming startup Giga Fun Studios raised $2.4M in a seed round led by interactive media-focused fund Lumikai, with participation from Fireside Ventures. Lumikai said they see opportunities to create category leaders across the domestic gaming landscape spanning from content and platform to tools and frontier tech like web3 in India. (Source)

  • In Singapore, gaming-optimized blockchain Oasys has announced the launch of the Oasys Ecosystem Fund, which aims to enable new entrants to the blockchain gaming space to better serve the market and drive mass adoption. Promising early-stage gaming projects will also receive advisory support from gaming VC Galaxy Interactive. (Source)

🗣️ Quote of the week

“I think we are really excited about the potential for this technology [AI] to create more meaningful counter-play for opponents, so one challenging thing in things like trading card games or things like RPGs is building an AI that is the right degree of difficulty for and is tailored somewhat to the needs of the players. I think we think we can create really deep and immersive, ongoing learning curves for players that sort of match up to where they're at in the games.”

Alex Connelly, chief technology officer of Immutable

All content on this newsletter is for informational purposes only and does not aim to serve as or replace expert investment advice.

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If you are a startup building in the metaverse / web3 ecosystem and are raising capital, please reach out to Sfermion. Sfermion is an investment firm focused on accelerating the emergence of the metaverse.

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