Previously listed ASX-company Animoca Brands (ASX: AB1) has executed agreements between July and September last year to raise US$2 million (A$3.47 million) from investors to develop The Sandbox, a prominent independent user-generated content and gaming platform.
Animoca said in a statement it was pleased to inform the wider market of its activities, but due to concerns over listing rules by the ASX, the company was unable to do so until now.
According to the gaming company, it raised US$2 million from a consortium of investors through its subsidiary TSB Gaming with 83% received in cash and the remaining 17% in Bitcoin and Tether cryptocurrency.
In exchange, Animoca issued more than 288 million of what it calls “SAND utility tokens” as part of a “simple agreement” for future equity convertible securities.
“It’s a special privilege and honour that the legendary game company Square Enix has invested in The Sandbox. Together with the investment from B Cryptos, we are now closer to bringing The Sandbox to the Japanese market,” Animoca Brands co-founder and chairman Yat Siu said.
Mr Siu declared The Sandbox’s “decentralised virtual world” will launch in the second half of this year with the full launch of the blockchain version of the game to follow.
Funding future gaming
The companies behind the cash infusion included leading gaming studios such as Square Enix, B Cryptos, Mindfulness Venture Fund I, Mindfulness Capita and TGV.
Japanese company Square Enix operates a global network of leading development studios and boasts a valuable portfolio of intellectual property including Final Fantasy, Dragon Quest, Space Invaders and Tomb Raider.
Cumulatively, its top titles have sold more than 300 million units.
Another significant investor is TGV, a globally distributed ledger technology equity fund licensed under the Monetary Authorities of Singapore as a venture capital fund that invests in serial entrepreneurs.
B Cryptos is Japan’s first FSA-licensed investment fund that focuses on blockchain start-ups and encrypted digital assets with existing partners including Japanese cryptocurrency exchange Liquid Group.
Interestingly, B Cryptos is also partnered with ICON, a global interchain project aiming to create an environment for real-world use of blockchain technology.
With a handful of new investors on board, Animoca said it intends to capitalise on the popularity of user-generated content (UGC) gaming by allowing players to digitise, and establish ownership of, their online creations in the form of non-fungible tokens (NFTs).
Gaming in a crypto world
NFTs can be traded by players without restrictions and open the door for an entirely new concept for investors: private ownership of digital assets.
In essence, NFTs allow users to commoditise content that exists only in the digital realm via virtual tokens that can then be used to deliver security and authenticity.
Animoca’s SAND tokens will be in the upcoming blockchain version of The Sandbox and used to represent objects, items and real estate in the game world. Players can choose to buy and sell various property and see it appreciate, or depreciate, over time.
The company intends to use “smart contracts” to track token ownership at the individual token level, which means each item will have a unique identifier and unique properties stored as metadata.
SAND will effectively become the reserve currency, or utility token, that players use throughout The Sandbox ecosystem as the basis of transactions and interactions.
Animoca confirmed its ERC-20 utility token was built on the Ethereum (ETH) blockchain and will be used not only by players but also by developers and publishers, “allowing content creators and players to exchange content such as assets and games and build a user-based platform of rewards while developing an ecosystem where users share their unique gaming creations”.
“The Sandbox is a pioneer in the space of blockchain gaming, NFTs, and true digital ownership, and we are thrilled to have Square Enix with us as a strategic investor, supporting our ambitious vision of building the Metaverse where creators can make games on their LANDs and trade ASSETS on our marketplace in a totally decentralised manner,” TSB Gaming chief operating officer Sebastien Borget said.
According to Animoca, The Sandbox has conducted two successful LAND presales so far in 2020, raising over 1,300 ETH by selling more than 10,000 LANDs with a third LAND presale set to commence on 31 March 2020.