Animoca Brands expands sporting blockchain game empire through MotoGP

Mobile and blockchain gaming company Animoca Brands (ASX: AB1) has secured a high-profile contract to develop a blockchain-powered game for the MotoGP franchise – the most prominent motorcycle racing series in the world.

Animoca Brands has signed a three-year global licencing agreement with Spanish company Dorna Sports to develop and publish the official blockchain manager game, including associated “digital collectables” that will be made available for players, directly linked to the FIM Road Racing World Championship Grand Prix brand.

Dorna Sports is a world leader in sports management, marketing and media, responsible for managing the MotoGP World Championship, and is the exclusive commercial and television rights holder for the series.

For Animoca Brands, the deal represents sequential progress as the company expands its portfolio of games and mobile products including household names such as The Sandbox, Crazy Kings, Crazy Defense Heroes as well as products based on popular intellectual properties such as Formula 1, Garfield, Snoopy, Thomas & Friends, Ever After High and Doraemon.

“The digital world is one of opportunity and I’m proud to see MotoGP further cemented as a forward-thinking and innovative brand, at the same time as giving fans another way to engage with our sport and get the most from their passion for Grand Prix motorcycle racing,” said Pau Serracanta, managing director of Dorna Sports.

Gaming for commerce

Animoca Brands has agreed to pay Dorna Sports an undisclosed non-refundable minimum guarantee fee, as well as, royalties consisting of a percentage of net revenues generated by the game and its associated collectables.

Animoca Brands said that it expects to launch its game by the start of the 2020 MotoGP racing season in March next year.

Grand Prix motorcycle racing is the premier class of road racing events held on road circuits around the world graced by iconic riders such as Valentino Rossi and Marc Marquez.

Sporting an illustrious 70-year history, MotoGP is the oldest motorsports championship in the world, featuring the most talented riders and the most technically advanced motorcycles. MotoGP events draw over 400 million viewers worldwide and are shown by more than a hundred media broadcasters, while the number of views of MotoGP videos on its various digital platforms exceeds one billion.

Motorsport dominance

MotoGP is yet another major brand in the motorsport industry to partner with Animoca Brands, following the company’s partnership with Formula 1 to develop and publish the first official Formula 1 blockchain game, titled “F1 Delta Time”.

Just like with MotoGP, the F1 game will also have a collectable component based on non-fungible tokens (NFTs) as well as a racing component utilising NFTs.

“NFTs are pieces of tokenised content that are verifiably unique. Each NFT is wholly owned by the player, with that player having the ultimate permission to use, trade or sell it,” the company said. This is a step toward true digital ownership often discussed by Animoca Brands – a different approach from traditional gaming, in which the publisher simply licenses the game and its contents to the end-users.

In F1® Delta Time, all cars, drivers and components are designated as NFTs, possessing unique racing attributes that affect players’ chances of out-performing competition on the track. Tokens are produced in limited quantities as determined by their level of rarity, with the rarest tokens possessing the most impressive racing attributes.

The first phase of the game was launched earlier this year, and Animoca Brands already completed three auctions of Formula 1 NFTs. The landmark “1-1-1” car auction closed on 28 May for a record price of 415.9 ether (worth approximately $160,000 at the time of sale); the “Monaco Edition 2019” car auction sold for 108 ether (worth approximately $43,000 at the time of sale); and the “France Edition 2019” sold for 96.6 ether (worth approximately $31,000 at the time of sale).

For MotoGP, Animoca Brands will produce a “manager style” game based on MotoGP intellectual property and also plans to utilise blockchain technologies and custom-developed smart contracts to enable users to purchase, collect, view, use, and transfer digital collectables that will make up a significant portion of gameplay.

“We are honoured to work with MotoGP, the undisputed leader among motorcycle racing brands, and we look forward to bringing to blockchain the excitement and thrill of the world’s most popular motorcycle races,” said Animoca Brand’s co-founder and chairman, Mr Yat Siu.

Raising capital to gain traction

In order to fund game development including the advancement of the MotoGP manager game, Animoca Brands has carried out a strategic capital raise of $1 million by issuing 4.25 million new shares.

Interestingly, the capital raise was procured from sophisticated investors including Moses Tsang, the founder of AP Capital and founding chairman of Goldman Sachs Asia Pacific. Mr Tsang is an avid supporter of various trusts and charities and has over 38 years of investment banking and Asian capital markets experience.

Prior to founding AP Capital, he was a general partner of Goldman Sachs, where he started the international fixed income group in New York, led the establishment of the fixed income group in Tokyo and headed the debt syndicate group in London.

Animoca Brands’ capital raise was conducted at a price of $0.20 per share – an 11.6% premium to the 14-day volume-weighted average price (VWAP) from 30 August 2019 ($0.179 per share). Animoca Brands’ co-founder and chairman Yat Siu will also participate in the raise, although his participation remains subject to shareholder approval.

The raised capital is expected to further Animoca Brands’ ongoing strategy of developing a host of games for a variety of sporting brands.

The agreement with Dorna Sports consolidates its position as a burgeoning leader in the space of blockchain application for major sports brands, particularly in the area of motorsport, and in the associated space of digital sports collectables.

To date, Animoca Brands has obtained licensing arrangements with various leading sports franchises, including Formula 1, Major League Baseball, the Bundesliga, Bayern Munich football club, and now, MotoGP.

“We believe that the manager game and collectables based on MotoGP can considerably broaden our consumer reach and drive fan engagement through true digital ownership of in-game elements,” explained Mr Yat Siu.

“With both MotoGP and Formula 1 as partners, Animoca Brands has established a solid foothold in two and four-wheeled motorsports,” he said.