Animoca’s Betting Big this Crypto Winter

in two thousand fourteen. Anamoca has expanded well beyond making mobile games into owning and operating a portfolio of investments and acquisitions that includes more than three hundred different finance, gaming and social media companies. Yeahs, Anamoca's co founder has as a result, become one of the most influence chill

people in technology. Bloomberg reporters Jumping Juang thinks we can digitalize your ownership of your tokens and assets in a way that everyone will has to property ownership and their data is not controlled by a centralized company. Joins me now to chart the path of Anamooka and its founder from indie game studio to crypto conglomerate. So good to have you on the show. Why don't you introduce ourselves

to our listeners. Hey, everyone, excited to be here. I jumping Juan and I'm covering Asia technology and the crypto out of Hong Kong. Lots going on in Asia technology at all times. You have a pretty busy beat, but lots going on, particularly as it relates to crypto and blockchain, especially in terms of a company called Anamuka Brands. Why don't you just tell us a little bit more about Animoka, about their founder and why they've been in the news

so often recently. Yeah, So Animoca is like Asia's biggest blockchain and webstree gaming master and this is its current status. But it started like about a decade ago, and before it's pivot into crypto, it was a sort of a dying mobile game developer out of a based in Hong Kong, and the company was making those casual mobile games. But back in uh the company made its first investment in Crypto Kiddies, which was the world's first like popular and

f t collection. So that was its like entry point into crypto and ever since then it's been buying a lot of like promising startups and projects in the crypto space, and uh till this day, it's still doing so even now we're in the middle of a cryptal in the last year. Last summer, I think the company first reached the unicorn status by reaching one billion US starar valuation in a fundraising around led by Sequoia, and now the company is valued as six billion US stars. So it's

just in the matter of twelve months. That's a lot. It's it's it's a lot. It's a very large valuation. It is a very short amount of time to achieve that valuation. How is this happening? Like, who is the person behind this? Right? So Yasu is the founder and the mastermind behind all the pivot into crypto. So Yassu it's not your typical tech bro like. He talks like softly and he is a father of three kids. Um and he always wear those sports where like the hoodie

and as like athletic pens. It can be just some and that's jogging on a Hong Kong trail. That someone you can run into in a morning job. But apart from its her, he's like very soft like appearance in the way he speaks. He has strong message for the big tech that is he wants to use his company and it's all subsidiaries. The tokens. He hoped to sort of revolutionize the Internet of today because today's Internet it's pretty much controlled by a couple like big players like

mad Amazon, Microsoft or Tensent. But with blockchain, yes do things. We can digitalize your ownership of your tokens and assets in a way that everyone will has to property ownership and their data is not controlled by a centralized company. Now there's an interesting tension that you're describing, right, which is that his you know, his whole thing is about decentralization and how blockchain will give users and customers like back the value that they currently provide to these big

tech companies. But Anamoca is now so big and has invested in so many different types of companies, not just blockchain, not just gaming, that they are kind of becoming a sort of a centralized force in their own in their own right. Yeah, they're sort of a gamekeeper in the website space because they're so influential. And we talked to some startup funders or crypital entrepreneurs. They sort of feel like, hey, if we don't get the investment from Animal, does does

that mean we're missing out? And at the same time, like yas it is trying to build the ecosystem, right, Like it's trying to plug its portfolio companies into a bigger internet blockchain system. For example, like one of its subsidiaries is making game aims for the board Ape collection, which is the one of the top empty collections. Things

like that. That approach will make people ask if I'm not one of Animoca's investees, or if Animoka doesn't home token to my crypto project, will I'll still be part of the future that Yatu is envisioning. There's a big question mark around that. Well, there's another question mark about

how sustainable is this future at all? Right, so they've got this extremely concentrated crypto exposure in addition to having like crypto on its own balance sheets in the middle of what's turning out to be a pretty protracted crypto winter, is Yatoo all worried about this? Right now? We're talking looking at like crypto games like Ax and they sort of pioneer the play to earn model, right, but it

doesn't really work during the down cycle. So once the token price shop, if players are here for the money but not for the fun, they will actually leave the game. So we've seen that with cryptal kids, and we've seen that with XI and will constantly happen as long as

like players are here for the for the money. Yes, to acknowledge that that problem actually for for his industry, and he's sort of arguing that he's spending more time to build a higher quality Triple A games, which may take a couple of years to come to the market. When we interview him, he showed us some demos trailers

for a couple of blocking games. They're buildings. They look similar to some of the more popular or better produced games here in here in the in the traditional council market, like for nine or uh there's another space shooter game which looks actually pretty cool. If those, like more serious games turned out to be a big hit, then it

will sort of part of the issue. Yes, he actually thinks it's a good time to deploy more capital because thunders studing money and Yasu has a big watch hast so well just the company and him will just go out and keep finding those bargaining investments. But I want to go back to something that you said about the

potential for blockbuster games. It's not particularly controversial to point out that most blockchain games right now are just not fun and they are, as you just said, really environments in which people are there for the money as opposed to for the game, and the money is declining. Actually Infinity again being an example of this, the fund is not necessarily rising. What do we think is the patients of potential blockchain gamers if those like you know, Blockbuster

Fortnite equivalence are two to three years away. M M. I think the issue will be like for companies like in mon Card and the making Websta games, they shouldn't be only targeting the crypto gamers or the cryptal traders. They should be targeting the way bigger like game or market. So if there's a day when Xbox player or a ps PS five player that will be drawn to a webstree game without noticing there's even a blockchain element to it,

then that will be a big successful animoca. So I guess it's less about the patients for for cryptal enthusiasts because they have the basic knowledge of the tokens and that they will go through all the troubles of like creating a wallet and linking into the game. But if anamoca scame can can be naturally integrated to the blockchain technology without letting gamers know, then you can have a

much bigger user adoption. I think that the challenge right now is you can get a much bigger user adoption. But like the time Horizon seems further away, is it that animal Okay is using other parts of its portfolio to kind of subsidize that potential couple of years between Okay, we are where we are with the existing blockchain games, but in you know, like our version of Fortnite is just around the corner, Like, how are they bridging this gap in the meantime. I think one of animals biggest

cash causes called Sandbox. That's a blockchain based huge GC content platform similar to rob blocks or Minecraft. So what Sandbox is doing is it's been doing a lot of like those virtual lends sales. Two big brands like Nike or even some of the local banks in Hong Kong. They're spending huge money on just buying lands on a

virtual space which has yet to have much happening. Because at the same time, game developers or even like indi like game music enthusiasts are they're using the in game tool to try to build those in game minigame on top of the sandbox platform. That's happening while they're doing the land sales, so as you can see, like they have a sort of quick and a medium way to make money. Meanwhile, they're letting their players in their ecosystem to try to provide more content to fill the gap.

We'll be right back with more from Bloomberg Reports up in Huang. What are some of the non crypto parts of the Anamoka portfolio. Oh, yeah, they have some games from the web twobe error, like like some power Ranger games. So it's sort of the fighting and raising games that they have published during the mobile game boom back like ten years ago. But they're they're sort of just letting those games to dept their own life, meaning they're they're

not putting extra resources into them. And at the same time that they're looking at their portfolio or i mean gaming portfolio and also profolio companies to see which are the ones we should pick out and let them make like blockchain game or turning like existing mobile games into block chinking by adding a layer of the token economics. Anamoka is clearly particularly as it relates to you know, other investors and funders in the region, one of the

biggest out there. And when it comes to you know, folks who if you if you don't live in China or Japan or Singapore, and you might be less familiar

with them. They've been compared to like an Andrews and Horowitz or an A sixteen C. Do you see them as potentially getting kind of a similar reputation outside of Asia where it's like folks who are based in New York in or in Silicon Valley are looking to Anamoca as a potential funder in the way that they look to some of these you know, big US based venture capital firms. Now, yeah, I think that's happening because right now I'm traveling in the States and just spend a

couple of days in the Bay Area. So the Webstree founders, at least the ones I met was they recognize and Marca is a big player and people are flying to Singapore to Hong Kong to meet them because they're big, Like there's a crypto event happening in Singapore, and the founders want to get any more money even if they're based in the States. And as a matter of fact, and Marka did acquire a like local game studio called nWay here in San Francisco a couple of years ago.

So yeah, actually it's making in rows into not only Asia but also the bigger Western market. I think one key difference between Marca and a VC from like a six thc Is and Morca is actually, yes, it's a game assment house, but it's also trying to do something

like a house. It's an operations company which grounds so many games studios, right, But that may go back to our earlier point that it still wants to would the world of gamers with its own creation of the next block pasture titles which happened to have a blockchain animent

to it. Right. So a kind of a comparison would be like if Facebook slash matter we're one of the biggest investors in other social media companies while also being Facebook slash matter, Yeah, exactly, and actually in Asia that's tencent right in the in the process of your reporting, you know, you, because you've you've been reporting on for a very long time, you have managed to kind of convey the appropriately crypto levels of what seems to be

boundless enthusiasm and confidence that yet to an other folks associated with anim have in terms of the future, But what are their big plans, Like what's what's the five, ten, fifteen year horizon. Mm hmm, that's a good question. I wish I asked you asked you like, what's your five year plan? Just like the Chinese government love five year

economic plan. But he was sort of saying like he wished to take the company public in the next two or three years, but depends on the market situation, because I feel he's grown to a stage that he needs to let investors away out because people have been backing him since like twenty eighteen and the you know VC or p from they need to cash out. The easiest way will be through an I p O. But that

that's his like plans in the financial markets. But back on the operation side of things, I think it's just like keep acquiring up and calming blockchain startups or acquiring that some internet startups that's already big in their own niche and then through the acquisition and morca give them a new play in blockchain. So a case of that will be it's acquisition of an education company called tiny Tap,

which connects online tutors with with like school kids. So there are content platform but now they're moving their content to blockchain, so yeah, and Moca will just keep buying. It's sort of also like the VC play like it's a number of game right. Sometimes you fail sometimes the startups. The startups will grow big, but you only need to have a couple of wings to be successful. Well Time Hotel, thank you so much for joining us. Really appreciate you

being on the show. Thanks Stacy. You can find more of his reporting on the Bloomberg terminal, on Bloomberg dot com or on Twitter. He's at ping Roma. That's p I N G R O m A. On the next episode of Bloomberg Crypto, we'll catch you up on what's been you guessed it yet another busy week in crypto. We'll talk regulation, markets and why there are almost no crypto CEOs left. This is Bloomberg Crypto, a daily podcast

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