Special Report: Animoca Brands, the metaverse-exploring venture capital conglomerate has emerged strongly from the ‘Crypto Winter’, lifting bookings in Q1 2024 by 72% versus Q1 2023.
The Hong Kong-based crypto-gaming and Web3 specialist also delivered a 14% reduction in operating costs over the same period, after dropping quarterly and full year numbers up to March 31 2024.
And that’s a period that offers a rare insight into the digital asset-verse and blockchain gaming world during a bearish market period we’ve come to know as the Crypto Winter.
This week, the Fortune Crypto 40 company – one of the most globally recognisable and far-reaching blockchain innovators – dropped a metaverse full of unaudited financial and business highlights for the year (to December 31), as well as the numbers for the March quarter just ended.
Unsurprisingly, Animoca Brands says its total bookings for 2023 fell by about 30%, from US$402 million in 2022 to $280 million – a direct result of the slump in blockchain activity during the economic icing over of the Web3 market following the calamitous collapse of Sam Bankman-Fried’s FTX exchange, the collapse of Luna and TerraUSD, and the crypto-related fallout which led to the crypto bear market that swallowed 2022 and much of 2023.
But the comeback this year has been emphatic, with the company landing bookings of some $90 million for the three months to 31 March 2024, compared with the $52 million in the first quarter of 2023.
Bookings in the first quarter of 2024 include the following:
$65 million from Digital Asset Advisory (DAA), which includes fees from token advisory, trading, and blockchain node operations;
$19 million from Web3 Operating Businesses: subsidiaries and projects incubated by the Company, which include token sales, NFT sales, in-app purchases, and other non-blockchain sales;
$6 million from Investment Management, which includes realized gains from digital asset investments and fees from Animoca Ventures.
Balance sheet strength heading into 2H
Animoca Brands says that 80% of Q1 bookings were achieved by the Digital Asset Advisory business and other projects driven out of Animoca headquarters.
The balance sheet is strong heading into the second half.
The company says it’s also cut down on operating costs – of $55 million over Q1 against the $64 million in the first quarter of 2023 – a 14% decrease.
The FY23 bookings reflect the company’s successful diversification across the full Web3 blockchain-metaverse spectrum – with some $77 million in bookings via its digital asset advisory (which includes fees from token advisory, trading, and blockchain node operations); $182 million in sales from subsidiaries and projects incubated by Animoca Brands (which include token sales, NFT sales, in-app purchases), and other non-blockchain sales.
The company says it continues to develop and publish a broad portfolio of products particularly in the Web3 gaming and metaverse sectors, including original games such as The Sandbox, Phantom Galaxies, Life Beyond, and Crazy Defense Heroes. It also offers products that utilise popular intellectual properties from the worlds of sports and entertainment, such as The Walking Dead, Power Rangers, MotoGP, the AFL, Olympics, and Formula E.
A scratch on the meta surface
For 2023 Animoca Brands also booked $21 million from investments, which includes realised gains from digital asset investments and investment management fees from Animoca Ventures.
Digital asset advisory revenues and realised gains from investment activity generated by Animoca Brands HQ made up some 35% of total bookings last year.
Animoca Brands remains in a strong financial position heading into 2024, the company says.
Considering the array of new subsidiaries operating under the Animoca Brands group as a result of acquisitions in 2022, total operating expenses of $246 million last year were only slightly higher, up from $234 million in 2022.
The increase was offset by cost reduction initiatives across all subsidiaries as well as the addition of a new business line providing digital asset advisory services.
The second half of 2023 saw a 9% decrease in operating expenses compared to the first half of the year, Animoca Brands reports.
The turnaround
Despite the fall in full-year bookings, Animoca Brands’ performance quickly turned around toward the back end of last year and into this one as digital asset markets thawed and the flow of money, excitement and ideas returned to the international industry.
In March the company entered into a Memorandum of Understanding (MOU) with King Abdulaziz City for Science and Technology (KACST) to collaborate to advance the Web3 and gaming ecosystem in the Kingdom of Saudi Arabia (refer to announcement of 11 March 2024).
And Q4 2023 bookings jumped almost 60% on the previous quarter.
These results – in addition to Animoca Brands’ core Web3 services revenue (and revenue from portfolio investments and partnerships) – include contributions from Animoca Brands’ headline business segments – a vast array of projects and businesses that include:
The Sandbox
TinyTap
Darewise Entertainment
nWay
Eden Games
Blowfish Studios
Gamee
Pixowl
Forj
Grease Monkey Games
Motorverse (previously known as REVV Motorsport),
Crazy Defense Heroes (Tower)
Animoca Brands notes it spent the entire FY2023 developing, expanding, and fully funding its menagerie of associated brands and concepts.
An open and democratic Web3
From new gaming and Web3 products, softwares and services, through its armada of subsidiaries and side projects, Animoca Brands leveraged its brand and its creative innovators to expand, deepen and diversify the company’s family of business suites and its projects portfolio.
The company has continued to build and expand the Mocaverse platform, which leverages Animoca Brands’ ecosystem of subsidiaries, projects, portfolio companies, and partners with the objective of building the largest Web3 game publishing platform.
Mocaverse participants can access games and participate in other on-chain activities to earn Realm Points and incentives provided by partners.
And one of the most eye-catching developments in FY23 has also been the launch of Open Campus and EDU Token
Animoca Brands is the incubator and launch partner of Open Campus – effectively a wholly democratic decentralised platform that aims to tackle the key challenges facing the education sector.
At its core, Open Campus is an ecosystem that connects learners, educators, content creators and educational institutions, enabling new ways of collaboration and value creation through blockchain technology.
Open Campus’s governance and utility token is EDU Token, which was launched in April 2023 on Binance.
EDU Token also powers Open Campus’s core protocol, including EDU Chain, Open Campus ID and Publisher NFTs. By the end of FY2023, Open Campus had onboarded more than 50 companies (representing up to 20 million addressable learners).
To date, Open Campus has sold out two seasons of Publisher NFTs, raising over US$670,000 and minted over 130,000 Open Campus IDs.
Co-founded back in 2014 by Yat Siu and David Kim, Animoca Brands began life as a mobile game developer, before exponentially expanding into the metaverse of web3, blockchain gaming and NFTs in 2018.
Actually, for more on the co-founder and exec chairman, Yat gave a cracking TED Talk last year titled “The Dream of Digital Ownership, Powered by the Metaverse”. It’s fab and has been viewed circa 2.4 million times on TED’s platform.
Looking Ahead
Having continued to vigorously build and expand during the bear market, the firm is heading into 2H 2024 in a strong financial position.
Here it is in brief, as per Animoca Brands:
Cash and stablecoin balances of US$291 million
Digital assets held on the balance sheet of US$203 million. Approximately 70% of these assets are held in a combination of BTC, ETH, APE, and MATIC
Liquid 3rd party digital assets of US$558 million, composed of US$278 million in available-for-sale assets and US$280 million from major unvested tokens in the balance sheet
Major liquid tokens held on the balance sheet include ETH, APE, EDU, BTC, and MATIC; these tokens comprise approximately 81% of the Company’s total available-for-sale digital assets
Major unvested token balance is predominantly from unrealized valuation gain from PIXEL
Off-balance sheet token reserves of US$1.8 billion, comprising tokens issued by Animoca Brands majority-owned Web3 subsidiaries. These reserves include Animoca Brands tokens such as SAND, EDU, ASTRAFER, QUIDD, PRIMATE, REVV, TOWER, GMEE, and others
Minority investments in over 450 portfolio companies.
Animoca Brands says it’s still just scratching the surface when it comes to the ambition of the company’s partnerships and investments – interests which now stretch further and further across the Asia Pacific and into the leading emerging tech markets, such as the Middle East.
This article was developed in collaboration with Animoca Brands, a Stockhead advertiser at the time of publishing.
This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
The post Animoca Brands springs out of Crypto Winter with big surge in Q1 bookings appeared first on Stockhead.
