Posted 2 months ago | by Catoshi Nakamoto
Animoca Brands is without a doubt one of the biggest and most influential companies in the blockchain gaming space, but because there isn’t an Animoca token or an Animoca exchange, retail investors tend to overlook the importance of this company. However, if you have followed Animoca’s investments over time you would be doing very well right now. Animoca is shaping up to be one of the industry’s biggest players, and it seems like everything they touch turns to gold…Or crypto.
Let’s get it.
Welcome to Bitboy Crypto…
In this video we’re going to talk about Animoca Brands, a company that has been building out the metaverse for years and positioned itself to be one of the major players in the space. Animoca Brands started out as a gaming company when it was formed back in 2011. Animoca’s earliest offerings were in mobile gaming, but founder Yat Siu began taking an interest in blockchain gaming and NFT in 2018. He jumped in during the depths of the bear market, when most investors had entirely given up on the industry. Animoca Brands did not have a massive treasury at the time, but the fearful conditions in the market allowed them to get insane deals on what would become some of the most popular brands in the metaverse.
In early 2018, the company signed a deal with Axiom Zen, the creators of CryptoKitties, one of the earliest NFT projects, and one of the most popular applications on Ethereum at the time. The deal gave Animoca exclusive rights to license and distribute the CryptoKitties brand in China. A few months later, Animoca made significant investments into Dapper Labs, the company behind CryptoKitties, which would go on to create NBA Top Shots, one of the early NFT projects that became a massive success and contributed to the massive NFT bull run of 2020.
Next, Animoca managed to acquire rights to The Sandbox after buying out its developer Pixowl for just under 5 million dollars. Not many people realize this, but this is one of the most successful acquisitions that we’ve seen in this industry, and there have been a lot of em. Now, the Sandbox token has a market cap of roughly 4 billion dollars, and the land is trading at a daily average price of around 3ETH. The game has also attracted a lot of big investors that have poured nearly a hundred million dollars into the project since it was acquired by Animoca Brands.
The popularity of the Sandbox has grown tremendously and has regularly grabbed headlines with announcements of partnership deals or big celebrity buy-ins. These deals and endorsements were possible because Animoca was able to leverage existing relationships with connections in the traditional world that they developed during their time as a publicly traded company in the gaming industry. That position as a publicly traded company helped them build credibility with established brands at a time when crypto was really struggling to prove itself. However, in 2020, Animoca was delisted from the Australian Stock Exchange specifically because they were a crypto-related business. Among the top reasons for delisting Animoca, The Australian Stock Exchange cited “involvement in cryptocurrency-related activities.”
The heavy handed regulation in Australia didn’t slow Animoca down, and it didn’t shake the confidence of its partners either. Animoca continues to work with major brands and artists such as Snoop Dogg, ADIDAS, Atari, the WWE, and a long list of sporting leagues and franchises, including the MLB, a few soccer teams in the UK and Australia, and auto racing leagues like MotoGP, Formula E, and the Formula One. Even the HSBC bank has purchased digital real-estate in the Sandbox. The bank says that it is planning to offer unique experiences to its customers in the metaverse, and it has chosen the Sandbox as the location.
Today, Animoca Brands is far more successful than it was when it was delisted from the stock exchange, which means that once again the regulators prevented retail investors from making money, while at the same time claiming to protect them.
The Sandbox is definitely shaping up to be one of the most popular metaverses, and it already has a ton of users and a lot of attention in the press. Animoca is not putting all their eggs in one basket though, they also have significant investments in many competing metaverses as well, including Decentraland, Axie Infinity, CryptoKitties, Atari, and Veloce Racing. The Decentraland investment is interesting considering the fact that it is often seen as the biggest competitor to The Sandbox. Animoca is hedging their bets so they win no matter which platform ends up becoming most popular. Chances are that the Sandbox and Decentraland will both be successful and find their own communities, which means big gains for Animoca.
The company is also heavily invested in Metamask and OpenSea, giving them exposure to the entire NFT and DeFi markets. They have also made significant investments in Ethereum’s layer 2 ecosystem, which includes leading a $200 million in Series C funding round for Immutable X, one of the leading layer 2 networks on Ethereum. Animoca has also teamed up with Polygon for multiple investments in gaming.
Unfortunately, one of Animoca’s most popular games on Polygon, F1 Delta Time, was recently forced to shut down because the company was unable to renew its IP license. Animoca has promised to ensure that NFT holders will be reimbursed even though their assets are gone now. This incident has raised questions about IP licenses for traditional brands in the NFT space, because many of them don’t actually understand NFTs, so they could make decisions with their licenses that negatively impact holders, and there isn’t much that the hosting platforms can do about it. For these types of licensing deals to continue, these projects are going to start developing a clear set of guidelines for what happens to the NFTs when the licensing contracts end. Luckily, Animoca has the resources to make its customers whole, and has promised to compensate them for their NFTs, but this is a problem that is happening on other platforms as well, and it’s something that the industry needs to address before we can reach mass adoption.
In addition to their investments in Ethereum and its layer two networks, Animoca Brands is investing in a multichain future with other layer one ecosystems as well. Just recently, the company announced that it would be investing in the Cardano-based decentralized exchange WingRiders. They have also invested in numerous Solana projects, including a new NFT platform called Burnt Finance and the most anticipated metaverse on Solana, Star Atlas.
Just recently, Animoca Brands led a 450 million dollar funding round for Bored Ape Yacht Club creator Yuga Labs. The funding will be used to build the upcoming Bored Ape metaverse, The Otherside. There have also been reports that Animoca has been working with Yuga Labs to build a play to earn game and another mystery project that has yet to be revealed. The game is expected to launch some time in the next few months and promises to “grow the Bored Ape universe and expand the utility and benefits offered to all Bored Ape NFT holders.” As of now it is not clear if The Otherside metaverse is the same project as this play to earn game, or something entirely different.
In total, Animoca Brands has a portfolio of over 150 different blockchain projects, and the list of partners seems to be growing every day.
Animoca Brands has been a strong advocate for decentralization of the metaverse, but they are still a centralized company, which means that they can be forced to comply with KYC or sanction requests from governments. The company recently caused some controversy when announcing the upcoming Bored Ape play-to-earn game, because the sign ups were requiring KYC verification. Then in the face of the recent Russian invasion of Ukraine, Animoca Brands became one of the first companies in the crypto space to entirely cut off service to Russian users, not just Russian Oligarchs or sketchy accounts, but every single user in Russia, even those who may have been against the invasion. Animoca Chairman Yat Siu said that the company received legal advice that they should ban Russian users, or they could risk being cut off from the world financial system themselves. Many other centralized companies in the crypto industry have avoided an all out ban, but after getting kicked off the Australian Stock Exchange for no reason a few years ago, it makes sense that they are being extremely careful to avoid negative attention from regulators.
This is a very pivotal time for Animoca. In January, the company announced a new 360 Million dollar funding round, which doubled their total valuation to 5.5 billion over just a few months. The raise was led by Liberty City Ventures along with Winklevoss Capital and oddly enough Soros Fund Management. If you want to swim with the whales in the NFT and blockchain gaming space, Animoca Brands is one of the biggest whales to follow.
But that’s all I got. Be Blessed. Bitboy out.