Animoca Brands rides upstream of blockchain-powered gaming and true digital ownership

In what appears to be a revolution not only for gaming and finance, blockchain technology could be on course to change the very future of work itself.

As part of the emergence of independent digital ownership, or in other words, online property rights and what has become known as a “play-to-earn” business model, blockchain has arrived to “trigger a wave of new economic opportunities”.

That’s the verdict from Animoca Brands co-founder and chairman Yat Siu, who is leading the blockchain gaming company as it breaks new ground.

In a founder’s letter addressed to shareholders, celebrating a successful year for the company that has seen multiple game releases, strong financial performance and the launch of a new digital currency, Mr Siu declared Animoca Brands is now scaling up these trends for the mass market.

He explained that the current opaque dynamics of the video games industry prevent players from owning any of the content they purchase and this inefficiency is fostering the kind of monumental change that creates new markets and new opportunities, similarly to the internet and the smartphone.

Performance-wise, Animoca Brands’ two primary areas of focus are its SAND and REVV token projects (utility tokens used in The Sandbox and F1 Delta Time games), which are growing with October’s turnover reported as totalling US$245 million (A$336 million), consisting of US$24.55 million (A$33.7 million) for REVV and US$219.69 million (A$301.78 million) for SAND.

New economic opportunities

Born and raised in Vienna, Austria and a formidable entrepreneur and angel investor, Mr Siu formerly worked at Atari and is now leveraging the market fusion of gaming, blockchain and fintech to lead Animoca Brands into what he described as “elevating the accepted standards of video gaming”.

The company intends to take advantage of the multifaceted growth of digital technology and fintech by focusing on two specific areas: digital ownership and play-to-earn.

“We are of the view that any projections of the value of the video games industry are necessarily too low if they do not factor in true digital ownership and play-to-earn,” he said.

“Property rights also enable significant and previously unavailable value-added services. Already, NFTs (non-fungible tokens) are being accepted as collateral for crypto loans – for example, NFTfi – and there are even services that provide fractionalisation of NFTs such as NFTX, breaking up a single NFT into multiple pieces, or fractions, so that they can be owned and traded by multiple owners,” Mr Siu added.

Digital property rights and play-to-earn

True digital ownership is a rather novel concept and made possible only since the advent of blockchain technology.

Traditionally, the gaming industry has interacted with its customers directly with players purchasing in-game digital content and allowing the company to retain all licensing rights. Players can use game assets licensed to them inside the game but cannot transfer those “assets” or monetise them.

As both an evolution and a revolution to the status quo, blockchain technology has arrived to enable what has become known as “true digital ownership” for in-game assets, conferring to gamers genuine property rights – including the right to use their assets outside their native games with the added ability to trade them independently via exchanges or direct transactions.

Intending to commercialise this convergence of fintech and gaming, Animoca Brands said it has developed a “constellation of products and companies” that can monetise its overarching forward-thinking approach.

Earlier this year, the gaming company unveiled its WWE Undefeated game, partnered with Formula E to expand its REVV token ecosystem and launched SAND, a digital currency attached to its Sandbox gaming metaverse.

Animoca Brands is also progressing an ongoing phased launch of F1 Delta Time, another blockchain-enabled game that includes various NFT collectables.

Interestingly, and as a clear sign that blockchain will have a huge part to play in the future of gaming, Animoca Brands reported several F1 Delta Time players generating “significant sums” by playing the game, with one player cited as generating “over US$1,600” in one month.

Moreover, players are choosing to open virtual shops to sell F1 Delta Time NFTs on marketplaces like OpenSea of their own accord, with premium collectable items generating “thousands of dollars”, according to the gaming company.

“Many players, motivated by the opportunity for play-to-earn, have organised themselves into racing teams, sharing resources to increase their chances to win and then splitting any winnings,” Mr Siu said.

“Joining a team as a driver usually means that you will receive some level of support from the team management – such as tyres, car components, or even a car.”

Alternative income source during COVID-19 lockdowns

Elsewhere, the play-to-earn phenomenon is being utilised by underprivileged communities to boost incomes remotely, in amidst COVID-19 lockdown restrictions.

In the Philippines, blockchain game Axie Infinity – a game in which Animoca is itself invested in – is enabling families to boost their incomes during the economic hardships brought on by the government’s response to the pandemic.

Created by Vietnamese start-up Sky Mavis, Axie Infinity is a decentralised application (dapp) on the Ethereum blockchain where players breed, raise, battle and trade digital characters called Axies. Despite being a video game, the app has proved to be a priceless tool for several people simply seeking to generate alternative sources of income.

“There is incredible potential in the play-to-earn space as it grows into a powerful trend that will change lives and the very future of work itself,” Mr Siu said.