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Animoca’s Robby Yung: Web3 Gaming Investors Becoming More Selective During Crypto Downturn
According to Animoca Brands CEO Robby Yung, investing in Web3 gaming has necessitated a heightened level of due diligence amid a challenging cryptocurrency bear market.
Yung, who is also a co-founder of the well-known Metaverse platform The Sandbox, emphasized the need for more stringent criteria when evaluating Web3 gaming investments during his remarks at the European Blockchain Convention in Barcelona.
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The CEO of Animoca Brands stated that investment opportunities involve identifying a combination of dedicated teams with specialized skills who are developing product concepts that demonstrate a clear market fit:
“Now that we’re in a sort of crypto winter and an economic downturn, from the investor perspective, we can afford to be quite choosy because, obviously, capital is scarce.”
Yung noted that the development stage of potential projects that Animoca Brands considers for investment is generally more advanced compared to the benchmarks set a few years ago.
Tim Stingelin, Leo Khan, Robby Yung, and Saro McKenna explore the current landscape of Web3 gaming at the European Blockchain Convention 2023 in Barcelona. Source: Cointelegraph
As a result, investors are becoming more selective, demanding concrete advancements from projects seeking to secure funding:
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“You have to have an alpha build. Ideally, you have some kind of user testing out there when you first go out and look for external capital. It’s very difficult to raise just on the basis of the business plan in this market.”
Despite the increased scrutiny from investors, Yung acknowledged that companies are still managing to raise funds, with the latter half of 2023 serving as evidence of this, as several deals have been completed:
“It has improved a lot, but there has been a flight to quality.”
User acquisition continues to pose a challenge for the Web3 gaming sector, which Yung attributed to difficulties in game distribution. He highlighted the reluctance of mainstream gaming platforms to feature games that incorporate Web3 technology:
“We’ve historically been unwelcome in most traditional gaming distribution platforms, whether that’s mobile app stores, Steam or console platforms.”
Yung believes that mainstream companies remain apprehensive about the consequences of integrating Web3 infrastructure into their offerings, which has led to an initial adverse reaction:
“I think that the idea of putting Web3 infrastructure in would bypass their business models, as in the fees that they take for distribution.”
The CEO of Animoca Brands added that these conclusions have hindered platforms like Steam, EA, and Epic Games from exploring the potential and engaging with the Web3 community to develop solutions that serve the broader gaming market.
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