Published on: 09/09/2022
Animoca Brands secures $110 million in funding round
Hong Kong-based game software company and venture capital firm Animoca Brands raised $110 million in a funding round led by Temasek, Boyu Capital and GGV Capital to fund strategic acquisitions, investments, product development and advocate for digital ownership rights.
All the investors, including Mirae Asset Management and True Global Ventures from a previous round, will create a strategic consortium to advise Animoca Brands as it continues its expansion. The strategic consortium will give Animoca Brands their input on business issues, capital plans and related topics.
“We are incredibly pleased to complete a special strategic round of fundraising comprising several of the most respected institutional investors in the world, and we are honored by the continued support from existing investors,” said co-founder and executive chairman of Animoca Brands Yat Siu, as per NFTGators.
“Animoca Brands has grown significantly as a company in the last year, and 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.”
The importance of digital ownership rights
Animoca Brands will also continue to promote digital property rights to advance the concept of an open metaverse. The company deems that the current games industry merely rents virtual goods to players and not granting them true ownership.
The rental of virtual goods limits a player’s engagement. Consequently, the current conversion rate of a free to paying player is very low, and players are hesitant to invest in a game because their investment could be made meaningless due to a publisher shutting down the game. The company views blockchain technology as a solution to this problem.
“Today’s games industry is held back by antiquated practices of ‘rental ownership’ and we are certain that gamers would prefer to have true ownership and control over their virtual goods,” the company wrote. “We believe that blockchain technology is the best option to deliver true and lasting property rights for virtual assets.”
According to a 2019 report by Limelight Networks, more than two million gamers spend over seven hours a week playing games. This puts gaming as one of the largest and most lucrative entertainment industries. While most models currently only benefit the publisher, Siu believes that digital ownership rights and blockchain technology will grant players the ability to “own and leverage a portion of that value”.
The exec pointed out that the process of people generating value from games is already happening but only at a small scale, and Animoca Brands is well-positioned to push blockchain gaming to the mainstream. He added that a model that increases players’ confidence in their investments would benefit the industry as a whole, as gamers would become more likely to purchase digital products and recommend them to others, enhancing revenue for everyone.
“Gamers will gain greater confidence to spend their time and money in games and other digital products if they have assurances of genuine digital ownership and permanence,” Siu wrote. “We are in the early stages of a significant market shift that is as momentous as the early days of the Internet or the smartphone revolution.”