Animoca Brands adds new partners to secure commercial future in blockchain gaming

Games developer Animoca Brands (ASX: AB1) is making further inroads into blockchain-based gaming having announced a partnership and mutual investment with six leading blockchain companies.

The deal takes Animoca’s growing list of collaborative partners to 17, thereby accelerating its capability in the blockchain space.

The emergent gaming company has secured a token and share swap totalling US$1 million (A$1.4 million) with Datum, LikeCoin, Musicoin, OST, Harmony and I-House, six leading blockchain-focused developers who plan to work in unison to develop a range of blockchain-related software aimed at the growing uptake of mobile gaming.

Animoca said the group of companies plan to introduce “blockchain apps” and products to the consumer mass market, thereby stimulating adoption and innovation of blockchain technology and enhancing the utility and value of existing cryptographic tokens set up by the slew of companies.

More specifically, Animoca said it plans to collaborate with all six parties to create and accelerate the adoption of distributed applications – DApps – digital applications that exist and run on a blockchain or peer-to-peer computer network.

“We continue to seek the best available specialised technology solutions to use in our products and those of our portfolio companies, like Zeroth, and we are therefore thrilled to have signed these deals with Datum, LikeCoin, Musicoin, OST, Harmony and I-House,” said Yat Siu, co-founder and chairman of Animoca.

“We strongly believe that these partners have the potential to become global leaders on truly massive scales, and together we will work toward a future in which multiple blockchain technologies are used concurrently in the same products,” said Mr Siu.

According to Mr Siu, Animoca will initiate a mutual investment totalling $1.4 million spread across all six companies in exchange for the equivalent value in each partner’s tokens.

The number of shares to be issued will be calculated as the specific investment amount specified for each partner converted into Australian dollars and divided by a deemed issue price of approximately A$0.10.

Past and present

The partnerships announced today build upon multiple such like deals signed by Animoca over the past year.

In September, Animoca partnered with OST.com and OpenST to develop products utilising the cryptographic digital token OST and to integrate OST in some of the company’s existing and future products, including WalletPet, the company’s gamified cryptowallet, currently in beta testing.

Animoca has said its blockchain projects will be accelerated by the access to the technologies, products, expertise, and networks gained by partnering with all six tech companies.

Additionally, Animoca hopes it can accelerate the development and popularity of its partners’ tokens by leveraging its global capabilities in blockchain game development, a rich portfolio of branded IP providing access to wider audiences, and the potential to create non-fungible tokens (NFTs) with existing brand partners to increase user engagement and revenue.

Its admitted strategy is to cement leadership in the blockchain space by building up its network of technology and brand partners, driving blockchain adoption and development, enhancing the value and utility of existing digital tokens, and accelerating the progress toward the mass consumer markets – widely considered to be the future of blockchain gaming.

The rationale behind the partnerships intends to leverage Animoca’s expertise in gaming, artificial intelligence, blockchain, software development, publishing, and branded IP collaboration, to increase the value of crypto tokens developed by all six companies and thereby “increase shareholder value above and beyond the revenues directly generated by each collaboration,” the company said.

Mind Fund and Helix partnerships

To further bolster its blockchain capabilities Animoca entered into a memorandum of understanding (MoU) with venture capital company Mind Fund Group and Helix Accelerator, a collaboration between Mind Fund and Hedera Hashgraph, and the first and only accelerator for developers and entrepreneurs building on the Hedera Hashgraph platform.

According to Animoca, its market move aims to establish yet another commercially viable partnership and business collaboration that will co-develop and co-invest in blockchain games and applications.

Mind Fund is a Hong Kong-based venture capital company that has invested in several companies in the US and Asia. Most notably, Mind Fund is an investor in Bytedance, one of the most valuable start-up companies in the world with a valuation of US$75 billion (A$105 billion), whilst also serving as an investor in Hedera Hashgraph.

“We believe that creative, engaging, and appealing games can attract the first hundreds of millions of users to the blockchain,” said Adam Lindemann, CEO of Mind Fund.

“This will only be possible with the advent of platforms that are fast, efficient, hassle-free, secure, and highly scalable. We believe that Hedera Hashgraph can provide such a platform,” he said.

To help Animoca to deliver on its market ambitions, Hedera Hashgraph aims to create a new commerce network based on the Hashgraph Consensus technology – a new distributed public ledger that can function faster, more securely, and on a significantly larger scale than current blockchain technology.

Earlier this year, Hedera Hashgraph raised US$120 million (A$168.9 million) from institutional investors via an agreement for future tokens (SAFT) that was offered to Mind Fund and other institutional and accredited investors.

Furthermore, under the MoU, Helix has agreed to invest a minimum of US$100,000 (A$140,000) in an upcoming token sale for the blockchain version of ‘The Sandbox’, on the condition that the game offers compatibility with Hedera Hashgraph. The Sandbox was being developed by Pixowl, a company recently acquired by Animoca.

“One of the biggest challenges facing blockchain networks is the current limit in transaction volume and latency. Hedera Hashgraph’s performance tests show throughput of 50,000 transactions per second and up to ten times that number under certain conditions,” said Mr Siu.

“Partnering with Helix and Mind Fund will significantly help Animoca to scale our blockchain products, allowing us to create a new generation of distributed games and applications that will have powerful consumer appeal,” Mr Siu added.