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Animoca Brands set for busy time with launch of major gaming titles ahead and gamers fire up in lockdown

Snapshot

Animoca’s business has grown, reporting record quarterly and monthly revenues over the first four months of the year, topping off with a positive EBITDA in April.

Animoca Brands Corporation set for busy time amid lockdown as gamers hit video games and launch of major gaming titles ahead

With the global lockdown amid COVID-19, gamers have had more time on their hands for gaming videos, benefitting Animoca Brands Corporation Limited, which has seen increases in downloads, revenue generation and engagement with their products.

Animoca’s business has grown during this period, reporting record quarterly and monthly revenues over the first four months of the year, topped off with a positive EBITDA in April.

Animoca is not just another video gaming company. It leverages gamification, blockchain and artificial intelligence to develop and publish digital entertainment products including original games as well as products based on popular intellectual properties.

And it has a very busy schedule ahead, which includes:

  • The planned public listing of its subsidiary OliveX Holdings Limited, a company focused on AI-driven health and fitness technology; and
  • Proposed commercial release of a number of major gaming titles later in the year, including F1®️ Delta Time and The Sandbox.

The trading of Animoca Brands shares on the PrimaryMarkets secondary share trading platform commenced on July 6, and the company raised about $6 million from strategic investors including M7 Asia and Mind Fund via convertible notes which converts to equity valued at 18 cents per share.

RightBridge partnership

Animoca Brands has initiated a strategic partnership with Sweden-based investment company RightBridge Ventures AB through the sale of its wholly-owned subsidiary Gamma Innovations Inc for US$1 million.

This deal will give Animoca a fully diluted stake of around 5% in RightBridge Ventures, which focuses on investing in companies that shape the future of e-sports and gaming as part of the digital entertainment industry.

The partnership will combine Animoca Brands’ leadership in shaping the evolution of the gaming industry towards mobility, multiplayer networking and true ownership of in-game digital items with RightBridge Ventures’ expertise in scaling up innovative companies and access to European and Scandinavian capital markets.

Atari Partnership significantly expanded

Earlier in August 2020, its licence agreement with Atari SA (XPAR:ATA) (NASDAQ:PONGF) was significantly expanded, granting Animoca the right to develop and distribute globally 15 classic Atari arcade games (including Asteroids, Pong, Centipede and Missile Command) and the right to develop and publish blockchain versions of these titles including the integration of non-fungible tokens (NFTs).

Animoca will also be the non-exclusive distributor in Asia and exclusive provider of blockchain content globally for the Atari VCS console.

The amendment grants to Animoca the rights to distribute the games through the platforms of its subsidiaries and affiliated entities, principally Gamee and Quidd.

Animoca intends to launch the games on Gamee’s mobile, web and desktop platforms, and the company will also offer digital collector assets from the games via its subsidiary Quidd.

Animoca will be the exclusive blockchain gaming content provider for the Atari VCS console until September 30, 2022, including the right to incorporate its preferred blockchain technology solutions (such as a crypto wallet), which will make the VCS the world's first dedicated blockchain gaming game console.

In exchange for the expanded licensing arrangements, Animoca will pay Atari a minimum guarantee against future revenues payable through the issuance of 18.7 million shares of the company priced at 21 cents per share.

And for the exclusivity of Atari’s VCS game console, Animoca will pay a minimum guarantee against future revenues to Atari of US$320,000, payable before July 31, 2021, at its discretion in cash or through the issuance of Animoca shares.

​Appointment of Ken Cron as advisor

Animoca Brands has this week appointed Ken Cron as advisor to the board of directors.

Cron’s experience, which covers public and private companies, includes overseeing and growing organisations into global enterprises, revitalising large companies and launching start-ups with eventual public offerings. 

He is chairman and CEO of Coin Operated Games HODL, LLC, a company that incubates, acquires and operates game companies with a mission to gamify finance.

Launch of US$3 million SAND tokens

Animoca’s The Sandbox launched a US$3 million sale of 360 million SAND tokens at US$0.0083 per token on Binance Launchpad, Binance’s exclusive token launch platform for transformative blockchain projects.

SAND is the main utility token for The Sandbox, the blockchain-based, community-driven gaming and game creation platform that will allow content creators to monetise gaming assets and experiences.

​The Sandbox is a unique virtual world that will offer a deeply immersive 'metaverse; in which virtual worlds and games will be created collaboratively and without central authority. 

It seeks to capitalise on the popularity of user-generated content (UGC) in gaming by giving players the benefits of true digital ownership over their creations in the form of non-fungible tokens (NFTs), which players can trade or sell without restrictions.

NFTs are virtual tokens for digital scarcity, security, and authenticity, and in The Sandbox they represent objects and real estate in the game universe. 

​The Sandbox has secured more than 50 partnerships with notable gaming companies such as Atari, CryptoKitties (Dapper Labs) and Shaun the Sheep.

OliveX listing

In June 2020, Animoca Brands lodged a prospectus for listing its fitness and health technology subsidiary OliveX Holdings Limited on the National Stock Exchange of Australia (NSX), aiming to raise $2-3 million to advance its health and well-being online platform.

The separate listing is being pursued as the US$4.2 trillion global wellness industry presents a market opportunity that is distinct from the core business activities of Animoca.

OliveX has created KARA Mirror, which uses artificial intelligence (AI) and gamification to engage with users and provides an interactive workout using a display monitor and camera which allows the user to obtain real-time personal coaching programs and guidance.

Raises US$4.1 million

In July, the company entered into unsecured convertible promissory notes with a number of strategic investors, including M7 Alternative Investment Strategies Asia Ltd and Mind Fund Group Ltd for net proceeds of US$4.1 million (around $6 million).

The convertible notes have a coupon rate of 9%, repayable at maturity subject to several numbers of redemption and conversion rights.

This capital raise will provide working capital and support a proposed initial public offering (IPO) the company is seeking by spinning off the assets of Pixowl SA, TSB Gaming, nWay Inc and Quidd Inc on Euronext or other public exchange.

M7 is a subsidiary of M7 Real Estate Ltd, one of the leading specialists in the pan-European, regional multi-let real estate market, while Mind Fund is a global venture capital company that has invested in several companies in the US and Asia.

Gamee buy

Also earlier in July 2020, Animoca Brands bought Gamee Ltd, a social casual gaming platform with over 80 game titles and 13 million registered users playing its games primarily on social media platforms such as Telegram.

It paid about $6.53 million, payable in Animoca shares, as well as earn-out payments of up to $1.63 million in either cash or shares, based on the achievement of revenue and profit milestones.

Gamee has recorded more than 4 billion gameplay sessions to date and on average, each user plays Gamee’s games for 25 minutes a day.

The acquisition gives Animoca access to Gamee’s in-house HTML5 skills and resources, as well as its highly active gaming community of 1.3 million monthly active users.

HTML5-based web gaming is a fast-growing gaming segment to which Animoca had limited exposure prior to the acquisition.

According to a report by ResearchAndMarkets, the global browser games market is expected to grow to US$26.26 billion by 2020 and reach US$28.18 billion by 2023.

Racing game launching in summer 2020

F1® Delta Time, a blockchain game licensed by Formula 1®, and developed and published by Animoca Brands, consists of a collectible component based on NFTs and a racing component that utilises those NFTs.

The collectible component is available now, and the racing component will launch later in 2020.

➢ The Racing Game will provide the full F1® Delta Time game experience.

➢ Played out in a full 3D environment, players will go head-to-head with others, racing their compositions against other F1® Delta Time players.

➢ Players need to qualify for a race and are matched with players of a similar level via matchmaking. Once qualification ends, then the real race begins. Each player controls their car against a full grid of 19 other cars.

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