Investing in Web3 Gaming Requires Greater Due Diligence, Animoca Brands CEO Says

Investment Proposals in Web3 Gaming Demand More Rigorous Evaluation

Investing in Web3 gaming has become a more careful and meticulous process, according to Animoca Brands CEO Robby Yung. Speaking at the European Blockchain Convention in Barcelona, Yung emphasized the need for robust assessments when considering investments in Web3 gaming. He stated that the current cryptocurrency bear market and economic downturn have made investors more selective due to the scarcity of capital. Yung highlighted the importance of passionate teams with specific skill sets and product ideas that align with the market.

Higher Standards and Tangible Progress

Yung noted that Animoca Brands now expects prospective projects to be at a more advanced stage of development compared to a few years ago. Investors demand tangible progress, including an alpha build and user testing, before committing capital. Yung acknowledged that the Web3 gaming sector has seen improvements, with several deals completed in the second half of 2023. However, he emphasized that there has been a shift towards quality projects.

Challenges in User Acquisition

One of the hurdles in the Web3 gaming space is user acquisition, according to Yung. He attributed this challenge to the distribution of games and the hesitance of mainstream gaming platforms to list games with Web3 infrastructure. Yung explained that traditional gaming distribution platforms, such as mobile app stores, Steam, and console platforms, have historically been unwelcoming. He believes that including Web3 infrastructure would disrupt their existing business models, particularly in terms of distribution fees.

Mainstream Players' Uncertainty

Yung pointed out that mainstream gaming companies like Steam, EA, and Epic Games remain uncertain about the implications of integrating Web3 infrastructure into their offerings. This uncertainty has led to a reluctance to engage with the Web3 community and explore potential solutions that cater to the wider gaming market. Yung emphasized the need for collaboration and dialogue between Web3 gaming and mainstream gaming platforms to unlock the full potential of Web3 technology.