Games

Animoca confirms $110M round led by Temasek, plans new acquisitions

Singapore government-backed investor Temasek is known for crypto-related investments but is yet to do its first direct investment in crypto.

Animoca Brands, a major player in the metaverse and blockchain gaming, has officially disclosed details of a funding round led by Singapore’s state-owned investor Temasek.

Animoca announced on Thursday that it closed a strategic funding round of $110 million from the issuance of convertible notes to a small number of institutional investors. Completed at a conversion price of AU $4.50, or about $3.0, the new round values Animoca similarly to its previous funding round, the firm said.

The notes round included new investors like Temasek, the private equity firm Boyu Capital and the global venture capital firm GGV Capital. These companies have established a strategic consortium of new investors, aiming to provide advice to the company as it continues to grow and build its organizational structure.

Temasek, Boyu and GGV are now expected to engage and advise Animoca on a wide range of business issues as well as provide input on its business and capital gains, the announcement notes.

Additionally, existing investors in the round included major South Korean investment firm Mirae Asset Management and the venture capital firm True Global Ventures.

Animoca is planning to use the new funds to continue to make strategic acquisitions investments, develop new products and secure licenses for intellectual properties. The company also targets advances in the open metaverse, including efforts to promote digital property rights for online users.

Yat Siu, co-founder and executive chairman of Animoca Brands, pointed out the importance of the round’s participation by major global institutions, stating:

“Our new investors will contribute strategic advice and perspective as we build the world’s leading company furthering digital property rights in the Web3 industry.”

Some initial reports on Animoca’s funding round first surfaced in late August, with anonymous sources claiming that Temasek would lead a $100 million round for Animoca.

Related: Blockchain incubator valued at $100M following NGC Ventures-led Series A

Temasek is a high-profile crypto-related investor, participating in multiple investment rounds for big crypto companies, including Binance and Amber Group. Temasek International chief investment officer Rohit Sipahimalani stressed that the government-backed firm did not directly invest in crypto but rather is focused on investing in a crypto-related business.

“We don’t directly invest in crypto, but some of the funds we have invested in may have crypto exposure,” Sipahimalani reportedly said in July 2022. He added that, at that point, the firm felt more comfortable with exposure “more in the picks and shovels of the entire system, the enablers rather than the currencies.”

Gaming makes up over half of blockchain industry usage, DappRadar

The gaming sector accounts for nearly 51% of the activity in the blockchain industry with hundreds of millions in transactions, according to August data.

New data from DappRadar suggests that gaming remains a vital organ to the blockchain industry. According to the report, the gaming sector accounts for approximately 50.51% of industry usage month-over-month (MoM), as per August numbers.

While overall the numbers are a good indicator for the sector, it is a decrease from the previous month. Last month, the gaming sector made up approximately 57.30% of industry usage (MoM).

The data from DappRadar comes from the daily Unique Active Wallets (UAW). According to the surveyor, there are around 847,230 gaming-related UAW active daily with nearly $698 million in transactions.

Source: DappRadar

Gaming has long been touted as a gateway to the world of Web3, blockchain, and crypto. Another recent survey from ChainPlay highlighted that of 2,428 surveyed GameFi investors, 75% said they joined the space solely on the premise of gaming.

It’s not just GameFi investors that believe in the sector as a proponent for mass adoption. In a panel at Korean Blockchain Week 2022, experts said GameFi and crypto naturally go together. Moreover, there was speculation that the majority of games will have an in-game crypto economy within the next few years.

Long-time legacy gaming companies in the traditional gaming sector also have their eyes on Web3. The head of Xbox even stated his optimism toward metaverse gaming, but with some caution toward play-to-earn (P2E) crypto games.

According to research from the cybersecurity auditing firm Hacken, many projects in the GameFi industry don’t prioritize security and are overdue for a major hack. The Ronin token bridge from Axie Infinity was one of crypto’s largest hacks with a $600 million loss in tokens back in March.

Recently in an analysis of 60 Web3-based games, it was found that 40% of users were automated bots or multiple accounts coming from one single entity.

Analyst says 40% of users in most Web3 games are bots — Here’s how to avoid being fooled

In DApps, daily active users is an easy metric to manipulate. Let’s review a few ways to cross-reference the authenticity of the metric.

The decentralized application (DApp) industry pushed above $40 billion in smart contract deposits in February 2021, and currently, the figure stands at $59 billion. To date, “real money” continues to flow into the sector, and on Aug. 29, gaming startup Limit Break raised $200 million. The project gained popularity after the successful launch of its DigiDaigaku free-mint NFT collection.

According to a report by Dove Metrics and Messari, the crypto industry saw $30.3 billion in funds raised in H1 2022. This amount surpassed the $30.2 billion seen in 2021. Excluding the $10.2 billion in funding raised for the centralized finance sector leaves a whopping $20 billion that was invested in DApps, nonfungible tokens (NFTs) and Web3 infrastructure.

One might question how much of that money has been deployed effectively or reinvested in ventures owned by the same investment groups. Of course, there are a handful of clever ways to overextend those announcement numbers without violating any regulations, but there’s undoubtedly a great deal of money flowing toward decentralized applications.

There’s always been a healthy amount of distrust in the actual number of active users on DApps, but so far, no hard evidence of cheating has been presented. So what tools can retail users employ to detect inflated activity? Well, it turns out there are at least three: active users, community engagement and liquidity.

Comparing registered users to active users

Most proof-of-stake (PoS) networks charge minimal registration fees and many are free to use. This leads to troves of “fake” active addresses that interact with the DApp and it creates incentives for developers and investors to boost their numbers.

Filtering the DApps rankings by the number of users brings some staggering data, especially in the Tron, WAX, Flow, EOS and Thundercore networks. Some of the DApps claim to have more active users than industry leaders like OpenSea, Uniswap and Axie Infinity.

Levan Kvirkvelia, the co-founder of Jugger, a Web3 bot prevention service, analyzed over 60 games and DApps and found that 40% of tactive users are actually automated bots or single entities controlling multiple accounts.

In some cases, such as the AnRKey X game on the Polygon network, the ratio of bots to holders reached 84%. Even though there could be a plausible explanation for distancing the project developers from the bot deployment, Kvirkvelia’s research shows that analysts should not use the number of tokenholders as a proxy for active users.

Faking community engagement is incredibly hard

A sign to look out for is inconsistent community engagement on the project’s social networks even if the DAU metric is high. Well funded projects aim to “buy” real users whereas bots are not skilled enough to contribute to discussions in a meaningful and consistent way.

This analysis doesn’t take longer than 10 minutes because it only requires one to log in to the official group and scroll through the last 40 or 60 messages. Are there real questions and constructive debates by the community or merely activity from group admins and shilling from bot accounts?

Moving on to the project’s official Twitter, Twitch, YouTube or Instagram page, follow the same process of reviewing posts and comments from the community. This qualitative data should yield a far more accurate analysis versus the number of shares, likes or active blockchain addresses.

Detecting fake token liquidity

Believe it or not, market makers offer liquidity services for tokens. For a certain fee, they can keep bids and offers at reputable exchanges at all times, moving the price using algorithms based on the orderflow.

An experienced investor will note nuances that distinguish fake volumes and order book depth from actual trading activity. For starters, analyzing the 2% depth on bids and offers provides an easy way to avoid illiquid tokens.

UFO Gaming (UFO) top markets by volume. Source: Coinmarketcap

Notice how the UFO Gaming token holds an unreasonably low amount of bids compared to its daily trading volume. The aggregate demand from buyers is 2% below the last trade and is less than 0.6% of the reported trading volume.

While having a market maker is usually a good thing since it encourages users to trade the token actively, it does not necessarily translate to trading volume. Dissipating interest from the community eventually causes the token liquidity to plunge.

Related: Singapore state investor leads $100M round for crypto firm Animoca, Report

Orchid Protocol (OXT) top markets by volume. Source: Coinmarketcap

The example above shows Orchid Protocol token, which despite being listed on Binance, Coinbase, Kraken and Kucoin, amasses $675,000 in daily volume. This effect causes the 2% order book depth to range between 9% to 47% of the daily trading activity, which sounds quite off.

Investors should be aware that venture capitalists and market makers are becoming even more skilled at hiding their manipulation. For instance, finding a top-200 coin at Binance with distorted ratios on daily volume and order book depth is almost impossible. Traders, gamers and investors should take care not to be misled by thehigh DAU metrics for popular DApps. Doing a qualitative analysis of the platform’s social media accounts and GitHub is a great way to cross-reference on-chain and trading data.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Why DeFi, GameFi and SocialFi are horizontals in the Metaverse

Read this article to know why DeFi, GameFi and SocialFi are not just verticals but also horizontals in a metaverse.

All for one and one for all

We need GameFi, DeFi and SocialFi to create a holistic Metaverse experience. Even with metaverses focusing on one purpose, these elements are essential to ensuring viability and scale.

In essence, a metaverse can scale only if DeFi, GameFi and SocialFi can work together seamlessly. DeFi, in essence, would take care of the financial elements, GameFi the experiential elements and SocialFi the credibility elements for the economic actors.

Without the DeFi elements, a metaverse would lack commercial scalability. Without the GameFi elements, the community would lack the experience motive for continually returning to it. Finally, without the SocialFi angle, the ecosystem’s credibility would not be established. The SocialFi elements ensure users and creators get credentials for their value addition.

This is not to say we won’t see a metaverse that focuses on football, Hollywood or art. But, even in these metaverses, there will need to be mini-games, microtransactions and ecosystem rankings. We are already seeing several SAAS platforms providing these bells and whistles so that teams can focus on the core purpose of their metaverses. All these must come together to create a sustainable economy, sticky platform and an immersive experience for the users and creators of the Metaverse. 

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Ecosystem-specific experiences

The future of value creation and exchange will know no national boundaries and jurisdictions. They will all be ecosystem specific. Therefore, all use cases need to be ecosystem-specific.

The future for DeFi, GameFi and SocialFi may be embedded. But, this embedding can only be implemented in a well-oiled ecosystem. The Metaverse that brings these user functions together will not only have experiential elements but also utilitarian and gamification elements.

For instance, a metaverse in which DeFi can be applicable will need to have opportunities for microtransactions. A metaverse in which SocialFi can be embedded will need to have an ecosystem that has creators and consumers contributing, being compensated and acknowledged for these contributions.

Let us now look at what we could see as embedded DeFi. Many of these have already been implemented in several metaverses.

Embedded DeFi 

As this space evolves, we see microtransactions, nonfungible token (NFT)-based lending, rental mechanisms, NFT marketplaces, micro token economies, token exchanges and many more bells and whistles that will support the Metaverse economy. Each of these features have their purpose in establishing a scalable economic model within the Metaverse.

For instance, Ecommerce within the Metaverse is already being tried in several ecosystems. Imagine a user with a good bag of NFTs, going into an art gallery. The art is expensive, and the user is short of liquidity. If NFT-lending has been integrated, the user could use their Ape or Punk to borrow some USDC to buy the art.

In the scenario described above, the user interface is extremely important in making the transaction frictionless. In the above example, instead of an Ape, if the ecosystem has a native NFT, that could be used more seamlessly. These NFTs will be more valuable as the user spends more time in the ecosystem — particularly if there are mechanisms by which they can be leveled up. 

As users invest more time and effort in upgrading the value of their ecosystem assets like NFTs, land or in-game assets, these assets will play an important role in DeFi elements, which the user can leverage.

Embedded GameFi

The term GameFi is often used in the context of large play-to-earn platforms like Axie Infinity. Yet, in many instances, gamifying an experience is as important as GameFi. Often, these features do not need to be intense Fortnite style gaming experiences. They can use casual games, leaderboards, loot boxes, battle passes and raffles to provide gamified experiences.

Much like DeFi components that add value to the economic model, GameFi elements are not only helpful in increasing user retention, but also critical to keeping users engaged and invested in the platform. 

Components of GameFi rely on both DeFi and SocialFi to succeed. For instance, those who want to be part of a leaderboard can borrow or rent an NFT to participate. On a similar note, the leaderboards are only effective if the SocialFi elements are built with gamers and creators in mind.

Embedded SocialFi

Last but not least, SocialFi keeps the soul of the creator’s economy intact in a metaverse implementation. A metaverse often involves various stakeholders: asset creators, asset holders, gamers and/or users. A sustainable model is achieved when all these stakeholders or economic actors are incentivized proportional to the value they add.

This is often where gamifying the experience interacts with SocialFi principles. For instance, gamers who play and win consistently go up the ladder within the ecosystem. As a result, they will accumulate experience points. Similarly, creators whose assets perform well in the ecosystem will be rated highly.

This form of “social swag” is also critical in DeFi transactions. Creators and gamers with social scores or experience points can get better deals when they tap into the DeFi components of the Metaverse. More social swag allows economic participants to accrue value within the ecosystem faster.

Most of these activities within the Metaverse are on-chain, and concepts like soul-bound tokens can also be used to build credibility within a Metaverse economy.

Conscious vs. unconscious experiences

Understanding the differences between conscious and unconscious experiences is essential for seeing how these applications interact in the Metaverse. Should they blend in or should they stand out? 

Let us consider examples of a conscious and an unconscious experience. If a passenger went to the ticket counter, picked up £10 from their wallet and bought a ticket for a train journey into London, it is a conscious user experience. If a passenger walks into the station and uses near field communication (NFC) on their phone to tap and walk through the barrier to take the train, it’s an unconscious experience.

One of the key goals In traditional fintech applications is to make performing financial transactions seamless, frictionless and as unconscious as possible. Similarly, you do not have to compete with your friend or colleague in a “Call of Duty” experience. The competitive spirit can be gamified through likes and views on Instagram.

Coming back to the Metaverse, all three paradigms — DeFi, GameFi and SocialFi — would be embedded experiences. This is not to say we won’t have metaverses like the Otherside where people come to play. But many of these paradigms will be unconscious experiences, making the paradigms more horizontal (embedded) than verticals (standing out from unconscious actions).

The Metaverse, the convergence

The Metaverse is expected to be the next avatar of the internet. As the internet is now, the Metaverse will have various virtual economic models powered by Web3. These models can have their roots in financial services, gaming or social media. Yet, there will be constant cross-overs and interactions across these models as they coexist in the Metaverse.

In the world of Web3, we often perceive decentralized finance (DeFi), GameFi and SocialFi as separate verticals or sectors. The inception of these three subclusters of Web3 happened at different times over the last few years. But as the space evolves and the Metaverse concept of matures, we are more likely to see them integrate into a Metaverse experience as horizontals.

All of these concepts are still in their nascent stages and use crypto to support their economic models. Most of the current implementations within DeFi, GameFi and SocialFi are standalone decentralized applications (DApps). However, that is set to change with the Metaverse becoming a part of the household.

Let us understand why it is critical to differentiate the capabilities of verticals versus horizontals. When we look at a GameFi application within a metaverse, we see that it is a dedicated gaming experience that draws users into the Metaverse. They play the game and leave the platform fulfilled.

The same can be the case for DeFi and SocialFi apps as verticals. For users who come to the platform to perform DeFi transactions or want to interact with their friends in Twitter or Instagram-like experiences, the apps are there as verticals. They stand out as an experience.

But the Metaverse is not just a collection of applications. It is more a bundle of conscious and unconscious user experiences within a scalable economic model. The conscious experiences can be categorized as verticals and the unconscious experiences as horizontals.

GameFi investors are now prioritizing fun factor over money: Survey

While roughly half of the investors joined the GameFi space initially for profits, 89% of GameFi investors succumbed to Crypto Winter 2022.

GameFi, the fusion of gaming and decentralized finance (DeFi) attracts a set of investors that tend to choose projects based on their use case rather than money-generating potential.

The GameFi ecosystem attracts GenZ investors and gaming enthusiasts. As a result, it stands as an entry point for numerous first-time investors. A ChainPlay survey participated by 2428 GameFi investors revealed that 75% of the respondents joined the crypto space solely because of GameFi.

3 in 4 respondents joined cryptocurrency because of GameFi. Source: ChainPlay

While roughly half of the investors joined the GameFi space initially for profits, 89% of GameFi investors succumbed to the crypto winter of 2022 — with 62% of them losing more than 50% of their profits.

GameFi profits are decreasing. Source: ChainPlay

However, investors believe that poor in-game economy design was the main reason for their losses. In accordance with this sentiment, the survey revealed that in 2022, investors worldwide spent an average of 2.5 hours per day participating in GameFi, which is down 43% to 4.4 hours from last year.

The fear of rug pulls and Ponzi schemes coupled with sub-par graphics are some of the biggest drivers preventing investments in new GameFi projects. As a result, 44% of investors believe that the involvement of traditional gaming companies can be key to GameFi’s growth.

Moreover, when it comes to future GameFi projects, 81% of GameFi investors are moving away from the traditional mindset and prioritizing the fun factor over profit-making as they seek positive in-game experiences.

Related: GameFi and crypto ‘natural fit’ for game publishers: KBW 2022

Blockchain gaming and the Metaverse were the least affected ecosystems by the Terra debacle, confirmed a DappRadar report.

In addition, a sustained institutional investment was seen in both blockchain gaming and the Metaverse, highlighting that many top companies see the potential for strong economic growth in both sectors moving forward.

Web3 games incorporate features to drive female participation

Web3 games are focusing on community building, aesthetics, customization and representation to attract female users — but is this enough?

Although there is still an apparent lack of women in the Web3 sector, blockchain-based games geared toward women may help drive inclusivity. A recent report from the Entertainment Software Association found that 48% of gamers in the United States identify as female. It has also been noted that nearly half of all gamers in the world are women. The interest that women have taken in the billion-dollar gaming sector is notable. This, combined with the massive growth being projected by the GameFi industry, is a key reason why a number of Web3 games are being built specifically for female users. 

Beryl Chavez Li, co-founder of Yield Guild Games — a global play-to-earn gaming community — told Cointelegraph that she believes blockchain-based games like Axie Infinity have started to see an uptick in women players. “Although statistics show that play-to-earn games appeal more to male users, we believe that more women will start to take an interest,” she said.

Yat Siu, co-founder and executive chairman of Animoca Brands, further told Cointelegraph that finance and Web3 games are closely related, noting that over time, this will naturally attract all types of people to the space. Yet he believes that women, in particular, will be drawn in given their tendency for greater financial responsibility. “This is particularly evident in developing countries where microfinance and specifically microlending is led predominantly by women,” he remarked.

Web3 games incorporate features to attract women

A number of Web3 games are coming to fruition with the goal of appealing to a predominantly female audience. For example, Fashion League is a free, play-to-earn mobile game that allows users to develop their own fashion empire. Theresia Le Battistini, CEO and founder of Fashion League, told Cointelegraph that the game allows users to create virtual clothing lines that could eventually be sold as nonfungible tokens, or NFTs, while brands can leverage the game to display digital products: “We believe that everything will be gamified in the future, as our statistics have found that the gaming market will exceed $300 billion by 2027. Web3 games need to be inclusive.”

To drive female participation, Le Battistini explained that Fashion League contains certain features that are naturally appealing to women. “The aesthetics of the game are important, along with the fact that it will first be accessible on mobile devices. Women like to play games on mobile, as there is a low barrier to entry,” she explained. Recent statistics show that 62% of people install a game on their phone within a week of owning it. Moreover, these findings note that the current mobile gaming gender split is 51% for women and 49% for men. Regarding aesthetics, a report from The Female Quotient found this to be the most important factor i attracting women to the Web3 space.

Fashion League avatars. Source: Fashion League

Chavez Li, who serves on Fashion League’s advisory board, further pointed out that many Web3 games focus on first- and third-person shooter games, yet lack creativity. She noted that Fashion League encourages individuals to create digital items, which can eventually evolve into sellable NFTs. “We are enabling the creator economy through a fun game. The more users play, the more points they can earn. In-game cash can then be exchanged for tokens that can be converted to fiat,” she said. Chavez Li also mentioned that players can compete and interact with each other during events like fashion shows, adding a layer of socialization to the game.

In addition to Fashion League, Mishi McDuff, founder of digital fashion brand Blueberry, told Cointelegraph that the company launched a 3D boutique shopping experience on the gaming platform Roblox. Known as “BlueberryXWorld,” McDuff explained that the Web3 game was designed to create a fun and safe environment for gamers to explore their digital identity:

“Avatars can browse Blueberry’s two-story boutique and try on clothing and accessories. The clean lines and silhouettes of the collections are juxtaposed with flints of attitude such as miniskirts, crop tops and party girl metallics, along with fun accessories such as cat backpacks. In addition, a variety of hairstyles are available for further customization.”

Like Fashion League, BlueberryXWorld was created entirely by female designers and developers. While McDuff noted that the game can be enjoyed by everyone, she believes that this element ensures female creators are able to have their perspectives heard. She elaborated: “In most traditional games, you see women represented in such an unrealistic way: no cellulite, no stretch marks, no body fat. Our avatars have love handles, stretch marks, and all the other things that make us human.”

McDuff also pointed out that community is an underlying principle of the game, which she believes will greatly appeal to women: “Players can stop by the cafe to grab a drink and chat with one another. Women have always had a knack for building strong, close-knit communities, so it will be no surprise to see this in Web3.”

BlueberryXWorld avatars. Source: Blueberry

Lenny Pettersson, chief operating officer of Antler Interactive — a Sweden-based mobile game studio — and acting CEO of “My Neighbor Alice,” told Cointelegraph that some of the most important features behind the Web3 game focus on player collaboration and in-game connections. Pettersson explained that the game allows users to gather resources to shape an archipelago together. Pettersson shared that player collaboration has already become apparent in the game’s Discord channel, noting that players write messages and post screenshots to the channel indicating where to find the best places to fish, for example.

Given this type of community involvement, Pettersson explained that much of the inspiration behind My Neighbor Alice has been drawn from traditional games that have been popular among a female target audience. For example, he noted that the art style plays a big part here. “A colorful and playful art style resembling a fairytale is intentional.”

Imagery from My Neighbor Alice. Source: My Neighbor Alice

While aesthetics, customization and community building are all important features for attracting women to Web3, better representation is also critical. Marcus Bläsche, CEO and co-founder of Rumble Kong League (RKL) — a game that combines basketball, play-to-earn and NFTs — told Cointelegraph that basketball and Web3, unfortunately, both share the challenge of thunderrepresentation of female users. To combat this, Bläsche explained that RKL recently partnered with Round 21, a woman-led Web3 native sports lifestyle brand with an emphasis on collaboration and community.

Related: Organizations look toward multiparty computation to advance Web3

According to Bläsche, this partnership has helped to launch a new NFT game collection called “The Rookies,” which creates an even split of male and female “rookies” to ensure female athletes are represented in Web3. Jasmine Maietta, founder of Round21, told Cointelegraph that the organization is specifically helping RKL create equal opportunities for anyone — no matter their gender, ethnicity or social background, adding:

“We believe that the Web3 world provides a unique opportunity to create a fair and equal ecosystem from scratch. Our Rookie collection is the first step in this direction, putting male and female athletes on the same page, and we plan to continue this narrative with anything we do in the future.”

Rookie Avatar. Source: Rumble Kong League

Will games increase women’s participation in Web3?

All things considered, it’s still difficult to determine if Web3 games geared toward women will actually result in increased participation. For instance, Pettersson believes this is a tough question to answer as of now. Yet, he noted that it would be sufficient to say that high-quality Web3 games geared toward women will have an impact on bringing more women into the sector: “The first “Web2” games were specifically designed and oriented toward boys and men. Over the decades more and more games were designed for girls and women.”

Related: Reinventing yourself in the Metaverse through digital identity

With this in mind, he believes that the Web3 sector is already aware that women like games and want to be involved, thus taking a heightened focus on this gender class. However, Pettersson added that it will be difficult to determine the real impact these games will have, noting:

“The challenge for Web3 games is also tied to the mass adoption of crypto, which is not specifically related to a gender question, but rather to a worldwide mass adoption of crypto. And there’s still a way to go when it comes to accessibility and user-friendliness for that to happen.”

Siu also commented that games are becoming less gender-dependent, while Maietta remarked that Web3 has the opportunity to base its culture on intentional inclusiveness. While notable, it’s important to recognize that the Web3 gaming space is still underway. As such, some in the industry believe that developers are currently more focused on building out the ecosystem rather than inclusivity. For example, Olga Ivanova, content and community manager at Spielworks — a blockchain gaming platform — told Cointelegraph that she believes Web3 game devs are more concerned with “creating robust in-game economies and elevating the game design to at least the AAA standard.”

MMORPG went into ‘hiatus’ after crypto investors bailed, denies it misused funds

Phat Loop Studios, the company behind the “Pokemon-like” game Untamed Isles has blamed the crypto market crash as a reason its investors bailed.

Phat Loop Studios, the company under fire last week for abandoning its Kickstarter and crypto-funded MMORPG game Untamed Isles, is now denying accusations that they lost their backers’ funds investing in crypto.

The company came under fire last week after announcing a “hiatus” of their Pokemon-like open-world video game, with some of the community accusing the developers of spending game development funds to bet on the crypto markets.

In a statement on Wednesday, the developers behind the project, which raised over $525,000 United States dollars, or $841,000 New Zealand dollars, on Kickstarter, insisted that all funds raised “were spent by the studio developing the game.”

The company stated that the reason for the hiatus is due to “the company exhausting its available funds” after “several investors” pulled out recently “due to concerns about both the economic market along with the crypto market.”

According to the initial announcement about the hiatus, the project had been gearing toward an October release. owever, Grant stated that the development of the project had been put on pause as the company was unable to “financially keep up with the demands.”

Grant stated that the main reason for this was due to the “economic landscape” changing for cryptocurrency, making it hard to continue pursuing the project that employed “more than 70 staff” to work “relentlessly for more than two years” to build the project.

“The crypto market crash meant that investors that were lined up earlier this year pulled out” who was necessary to “make it through to our runway to launch,” said Grant. 

The game was initially designed to launch with nonfungible token (NFT) implementation, but the plans for this were later dropped outside of an optional external marketplace.

This angered many who questioned the legitimacy of using the crypto market crashing as an excuse for the project failing if it was based on “game first, crypto second.” 

It is unclear how much the project actually planned to integrate cryptocurrency into the project at all, however, Grant stated that “until the crypto situation is resolved — and we’re confident it will be at some stage ” then we have to hibernate development on this project.”


Function over fun? Analyst says P2E games don’t need to be ‘fun’ to retain users

Play-to-earn games struggle to retain users, which is exactly why one analyst says they need to focus on function over fun.

Play-to-earn (P2E) blockchain-based games gathered investors’ attention in late 2021, with Axie Infinity leading the pack with over 2 million active users. In P2E games, players are awarded crypto or nonfungible tokens (NFTs), as they progress throughout the game. These digital assets can be sold using marketplaces and cryptocurrency exchanges, generating income in a decentralized manner.

However, there is a large discrepancy between P2E and traditional PC and console gaming experiences. In that sense, crypto games are a couple of decades behind due to the restrictions imposed by blockchain technology.

Yes, most crypto games lack a decent user experience

Although the promise of AAA-level crypto games eventually developing exists, so far, most of the launches gravitate toward digital trading card battles, decentralized finance (DeFi) disguised as role-playing games and collectibles.

Unsurprisingly, crypto games critics focus on the lack of fun, or a comparable user experience versus the traditional market, as pointed out by analyst Udi Wertheimer.

According to Anton Link, the CEO of NFT renting and leasing protocol Unitbox Protocol:

“Unlike most Web2 titles, fun is not what play-to-earn gamers aim for. Their main goal is to make a profit and be the first to gain new valuable experience that they can effectively use as a guild or cybersports team member to monetize their time.”

In terms of adoption, the traditional gaming industry beats the movies and TV entertainment by a large margin. A recent report from Newzoo suggested that the video games market will reach $200 billion in 2022, a 5.4% increase year-over-year. In addition, the report states that the gaming segment entices 3 billion players, far higher than the estimated 320 million crypto users worldwide.

Even if Wertheimer’s remarks are correct, meaning the demand for crypto games will remain sluggish, capturing a mere 0.5% of this segment equates to 16 million users. Moreover, there’s nothing impeding someone from seeking some form of revenue in P2E and, separately, enjoying traditional games on consoles, PCs and mobile apps.

In regards to the potential expanding P2E user base, Anton Link, the Unitbox Protocol CEO said:

I think NFT blockchain games and the GameFi sector will be the key drivers of the industry in the next few years – and will also become a vehicle for the mass transition of new users to the crypto industry through new NFT-based DeFi products.

There’s a considerable difference between collectible NFTs and in-game avatars, armors, weapons, land and spaceships. Likely the prejudice against P2E games comes from the 67% decline in NFT trading volume from May 2022 to July 2022, according to data from DappRadar. Furthermore, Axie Infinity has been plagued by a massive $600 million Ronin bridge hack on March 29.

DeFi-focused games could generate income for many

There’s plenty of valid criticism for the crypto gaming industry, and forcing users to buy items or tokens sits near the top of this list of complaints. However, one should note that the multiple DeFi applications are disguised as games, such as DeFi Kingdoms, Farmers World and Sunflower Land. In these cases, expecting free compensation without any initial investment would be weird.

Despite the challenges in onboarding users and creating sustainable in-game economies with sufficient incentives, Link explained that “It will only be a matter of time before institutions start lending against NFTs.”

He elaborated with:

“Once the institutional lending infrastructure is in place, we expect the demand for NFTs to rise as well, as institutional money can flood into the country due to the additional utility that comes from securing their NFTs.”

Maybe, in the near future, players will no longer have to buy digital monsters and spaceships before adventuring in P2E. Even though there’s valid criticism for the crypto gaming industry, a 10x increase in active players to 16 million is not far-fetched. More importantly, this growth and the new models supporting it do not need the same user experience provided by traditional games that don’t require interaction with blockchains.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

GameFi and crypto ‘natural fit’ for game publishers: KBW 2022

Korean experts believe that crypto would play a major role in the gaming ecosystem, and within the next three years, the majority of games might have an in-game crypto economy.

South Korea is considered the fourth biggest gaming market and one of the biggest blockchain adopters. However, the country has banned play-to-earn (P2E) blockchain games due to the crypto integration. The new pro-crypto president Yoon Suk-yeol had hinted at lifting the ban, but the government has yet to show any significant effort.

Anthony Yoon, managing partner of blockchain investment and accelerator firm ROK Capital, in an exclusive interview with Cointelegraph, said that GameFi is a natural fit for Korean game publishers. Yoon shed light on the current state of GameFi in the country and how game studios are approaching blockchain integration during the Korean Blockchain Week 2022 (KBW)

Yoon explained that there are two thought processes among Web2 gaming companies looking to shift to Web3 and blockchain gaming. Where one camp is looking for ways to derive value for their projects and create their ecosystem on blockchain from scratch, with token integration being the last step, the other camp is ready to launch a token first and outsource the technology.

Talking about the popularity of global blockchain projects such as Solana and Polygon against the native Korean projects, Yoon explained that their popularity is not just dependent on the amount of capital they bring in but more so on the infrastructure and ecosystem they have to offer. He explained:

“From a feasibility perspective, I think something that these gaming studios also look at — are their users on this chain. Is there an ecosystem on this chain? Is there infrastructure on the chain?”

Yoon also said that while native chains do play a key role in developing the ecosystem, the major focus of game studios is to build a global ecosystem.

Related: Web2 adoption key to Metaverse success, Klaytn Foundation — KBW 2022

In another chat, WeMade CEO Henry Chang talked with Cointelegraph about current trends in the GameFi sector, its potential future and WeMade’s new gaming blockchain platform Wemix.

Chang said that even though crypto-integrated blockchain games are banned in Korea, crypto definitely has a utility in the gaming industry. He added that crypto would find a place in most of the games in the coming years. He concluded by saying, for crypto games to be successful, they must have a formidable in-game economy.

Condense to live stream IRL events into the metaverse

Metaverse infrastructure company Condense closes a $4.5M seed round with plans to livestream real-world events into the Metaverse.

The Metaverse infrastructure company closed a seed funding round to continue the development of 3D live streaming technology. Condense raised $4.5 million in a round led by LocalGlobe, 7percent Ventures and Deeptech Labs. 

The technology employed by Condense live streams 3D videos into the Metaverse via games and existing platforms. The firm states that such technology has the potential to create an entirely new world of content creation and entertainment engagement with real-time connections.

Additionally, Condense had participation from angel investors and music industry insiders such as English footballer and platinum-selling artist Tom Blomfield (Mozo) and music manager Grace Ladoja.

Funding from this round will go toward relationship building with content creators, artists, labels and existing Metaverse platforms.

The underlying technology of Condense utilizes, “cutting-edge computer vision, machine learning and proprietary streaming infrastructure to capture and embed live 3D video (Video 3.0).” This live video experience is then streamed into metaverse games, mobile applications or platforms created with Unity or Unreal Engine.

The 3D aspect of these live streamed events will allow a unique and dynamic perspective for every player simulating a physical live event. Such technology adds a level of individualism to Metaverse events, moreover, to simply watching a standard event live stream. 

This development comes as the music industry continues its push for engagement with Web3. technologies and digital interactions.