The Current State of Web3 Gaming Investment
Investing in Web3 gaming isn’t as easy as throwing darts at a board these days. As Robby Yung, CEO of Animoca Brands, recently pointed out at the European Blockchain Convention in Barcelona, we’re knee-deep in a cryptocurrency bear market, and that calls for some serious scrutiny. Gone are the days when a slick business plan could win you a few bucks—now, investors are filtering through proposals with a magnifying glass.
The New Check-Boxes for Investors
What exactly does due diligence look like in today’s market? According to Yung, it’s a mixture of passion and skill paired with a product that really fits in the marketplace. Investors are armed with a more discerning checklist, and they’re not afraid to use it. As Yung put it, “Capital is scarce,” which means that being choosy is now the name of the game.
Mature Projects are the New Norm
Yung suggests that the projects on investors’ radars tend to be more developed than we might have seen in the past. The days of betting on a half-baked idea are behind us—now, it’s about showing tangible progress. If you can’t cough up an alpha build or some user testing results, good luck raising that capital. “It’s very difficult to raise just on the basis of the business plan in this market,” he asserts.
The Flight to Quality Amid Challenges
While it seems like investors are becoming increasingly picky, Yung pointed out that there’s still money to be made—in fact, the second half of 2023 has shown us that deals are still happening. “It has improved a lot, but there has been a flight to quality,” he noted. This hints that while the market may be tough, there are still avenues for ambitious projects that prove their worth.
Distribution Dilemmas in the Web3 World
As if raising capital wasn’t enough of a puzzle, user acquisition poses its own challenges. Yung articulated the uphill battle when it comes to distributing games that utilize Web3 technology. Traditional gaming platforms, including mobile app stores and even console platforms like Steam, haven’t exactly rolled out the welcome mat. The knee-jerk reaction to Web3 infrastructure has left these mainstream players sitting on the sidelines, unsure of how to navigate the new landscape without upsetting their existing business models.
So, what’s the takeaway? If you’re looking to invest in Web3 gaming, prepare to roll up your sleeves. It’s time to dig deeper than ever before and find those gems that are not only passionate about their craft but also well-prepared to take on the industry’s challenges head-on.
