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Mythical Games has raised $150 million at a $1.25 billion valuation to launch its Blankos Block Party open-world multiplayer game as well as its platform to create games with nonfungible tokens (NFTs).
That’s just four months after it raised $75 million. And this time, marquee Silicon Valley investment firm Andreessen Horowitz led the round, bringing the company’s total funding to date to $270 million.
Los Angeles-based Mythical Games is pioneering the idea of “playable NFTs,” using NFT technology to uniquely identify game characters so players can truly own them. NFTs use blockchain, the secure and transparent digital ledger, to authenticate unique digital items.
Blankos Block Party, the company’s first game, has vinyl-style game characters who you can earn (through gameplay), buy, or sell. It has a marketplace where players can buy and sell their characters, which can be customized or decorated with various things earned in the game.
Three top investment pros open up about what it takes to get your video game funded.
“We weren’t planning on raising and Andreessen came to us and put together a round for us, which was great,” said John Linden, CEO of Mythical, in an interview with GamesBeat. “We’re very honored to be a portfolio company of Andreessen Horowitz.”
One of the reasons for the excitement around Mythical is that it could be a bridge between blockchain technology and the triple-A game community, which has been reticent about diving into blockchain games out of fear of things such as scams, regulator crackdowns, and hostility from gamers.
“We can’t quite disclose it yet. But I think some of the biggest players in the U.S. are really starting to pay attention heavily now,” Linden said. “And we’re going to step into the space with one of them before too long. We want to have the right infrastructure in place to start onboarding games that have millions of players. It’s coming quickly now, which is exciting.”
The NFT boom
NFTs are thriving. If you look at Google Trends, you’ll see that NFTs started picking up in February and skyrocketed after related NFT sales like digital art and NBA Top Shot took off. Dapper Labs has now seen sales and resales of those NFTs top $780 million. In March, an NFT digital collage by the artist Beeple sold at Christie’s for $69.3 million. It sounds so dumb. The popularity of NFTs have exposed some serious drawbacks too in numerous scams where people steal art and sell it as their own NFTs. NFT sales hit $1.2 billion in the first quarter, $1.3 billion in the second quarter, and a whopping $10.7 billion in the third quarter as games such as Axie Infinity took off.
This week, both Strauss Zelnick, CEO of Take-Two Interactive and Andrew Wilson, CEO of Electronic Arts, both responded to investor queries on analyst calls about NFTs. And they both said that NFTs represented an interesting new way to monetize digital collectibles in games, which players have enjoyed for many years.
While many NFT projects are still dismissed as overhyped schemes to get rich quick, Linden said the company wants to drive mass adoption of ownership in games through playable NFTs.
Pre-blockchain, players invested billions of dollars into digital items in other online games without a tangible way to benefit from it beyond occasional gameplay advantages; content remains locked behind their account because their purchase is really just a lease or licensing agreement, with no capability to transfer or sell, Mythical said. And while other secondary marketplaces have existed in the form of gray markets and black markets, players who participate are exposed to unsafe transactions, scams, and even the threat of losing their accounts for terms of service violations, the company said.
But the tech isn’t really easy to create. Mythical Games has more than 100 employees, and it has been working on its tech and game for three years, Linden said. Adding NFTs to a game means that a company has to create a digital wallet for players to securely hold their digital property. It sits on top of a blockchain platform, and that platform often has to be modified to reduce transaction costs, speed up transactions, and use less energy than the likes of Bitcoin and Ethereum. All of that takes engineering work, and Mythical is still hiring.
On top of that, Mythical Games is talking to other game companies to license its platform to them so that those game companies can create their own games with playable NFT characters.
Mythical will use this latest round of funding to further drive mass adoption of ownership in games through playable NFTs with the growth of its first game, Blankos Block Party; expansion to other gaming platforms; and new projects launching later this year and in 2022. Via its Mythical Economic Engine and Mythical Marketplace, the company says it is providing a platform for game developers to create their own player-owned economies, as well as new tools for content creators and brands to facilitate ownership of in-game assets.
Through the Mythical Marketplace, players can unlock the value of monetary, rarity, and time-based efforts by selling their NFTs to other players for real money, in safe and secure transactions with proof of authenticity.
Andreessen Horowitz has been all-in on games, cryptocurrency, and blockchain.
“Mythical Games played a formative role in the development of play-to-earn concepts, and has clearly established itself as a top player among gaming technology studios, attracting mainstream players with its distinctive design and quality gameplay,” said Arianna Simpson, general partner with Andreessen Horowitz, in a statement. “Cofounders John, Jamie, and Rudy have a wealth of experience in the gaming world, and have built a world-class team to support their vision. We’re thrilled to partner with them to bring NFT gaming to an even larger stage.”
Other investors in the round include D1 Capital, RedBird Capital, and The Raine Group, as well as crypto exchanges Binance Labs and FTX. The company also received support from notable entertainment brands and personalities including 32 Equity, the investment arm of the National Football League (NFL); The Chainsmokers’ Mantis VC; Ryan Tedder (OneRepublic); OneTeam Partners; and pro-sports team owners including Jonathan Kraft and The Kraft Group (New England Patriots and New England Revolution); Michael Gordon (Fenway Sports Group; Boston Red Sox and Liverpool FC); and Michael Jordan & Curtis Polk (Hornet Sports & Entertainment; Charlotte Hornets and NASCAR Cup race team 23XI Racing).
“This is a fun round, as there is a star-studded group here,” Linden said.
The round showed that both venture investors and celebrities are paying attention to the blockchain, which, a year ago, didn’t garner any attention when Mythical mentioned it.
“As an early believer and investor in blockchain technology and NFTs, and as a much earlier believer in video games, I am happy to help back a company that understands not only where the world is at with gaming and tech, but where it’s headed,” said Ryan Tedder of the band OneRepublic, in a statement. “I’m also excited to explore the many ways in which music will play an important role in this next evolution of the games industry.”
Existing investors including Galaxy Interactive, WestCap, 01 Advisors, Javelin Partners, Struck Capital, Alumni Ventures, and Signum Growth Investments also invested in the round. Linden said the company will hire more people to scale-out operations as it funds future games and brings new game developers to the Mythical Platform, which other game developers can integrate into their games.
The first developer partners to the platform, Creative Mobile, CCG Lab, and Abstraction Games, were announced earlier this week.
“We’ve been spending lots of time with first parties really trying to figure out how do we bridge this gap,” Linden said. “The blockchain world is great. And we are seeing all this amazing stuff. But some of it still isn’t quite ready for the mainstream. There are three billion gamers in the world and they can still lose their passwords twice a day.”
In everyday websites, you can lose a password and recover it easily. In cryptocurrency, you can lose a private key and you can lose all of your money. This is what Linden meant when he said that blockchain platforms need to bridge the gap for mainstream users.
“How do we do this and bring the entire gaming world with us?” he said. “With this money, we’re focused on bringing together these groups to educate them, get them funded, get our tools into the design, so they can bring their games out.”
The company has more than 150 people.
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