Why we invested in Axie Infinity, a blockchain gaming unicorn

Why we invested in Axie Infinity, a blockchain gaming unicorn

Gaming 3.0 has arrived, powered by a blockchain engine that gives gamers the opportunity to “play to earn.” Move over Uber, the next evolution of the gig economy might just be blockchain gaming.

Sky Mavis has tweaked the ubiquitous freemium model to give game players an opportunity to monetize their engagement in an NFT game called Axie Infinity. The game enables users to create unique characters using non-fungible tokens (NFTs). These NFTs represent unique digital objects, with verifiable authenticity.

Axie Infinity – a Pokémon-inspired universe – didn’t get much attention when it was launched in 2018. But now, it is growing rapidly as the first blockchain game that gives players a real stake in the action. The game has more than 1.9 million users and has already generated over $2 billion in sales.

We joined A16z, the Series B lead, and other investors because we believe that Axie Infinity represents a whole new category of gaming. The game’s rapid growth, combined with an NFT gaming segment worth $4.8 billion, gives us confidence that this is a gaming unicorn.

The Axie platform is a hybrid solution that integrates gaming with social media and the gig economy. Play-to-earn functionality is a key differentiator because it enables players to own their in-game assets, and the entire ecosystem is governed by the community. The company’s business model includes earning a 4.5% commission on AXS token transactions, as well as collecting marketplace and publishing fees.

Axie Infinity was built as a fun and educational way to introduce the world to blockchain technology. Many of the original team members met playing CryptoKitties, which was their first time using Blockchain for anything other than pure speculation.

The founder-market-fit of this Vietnamese start-up is spot-on. Co-founder Jeffrey Zirlin, aka “Jihoz,” has impressed us with his ability to drive growth and engagement. Trung Thanh Nguyen, the company’s CEO, was formerly CTO of Lozi, a Vietnamese e-commerce company. Aleksander Leonard Larsen, COO, has been a leader in the Blockchain industry and gaming communities in southeast Asia since 2018. Tu Doan, the company’s game designer, was formerly head of design for Lozi. Finally, Andy Ho, CTO, leads the engineering team. Andy was previously a software engineer at Anduin Transactions.

Alex Shin, co-founder of Hashed and now an Entrepreneur in Residence at Next, introduced us to the Axie team. Moreover, Yield Guild’s whitepaper, “Seeking Yield Across the Metaverse,” helped us develop our investment thesis for Axie Infinity.

Of course, gaming platforms have plenty of synergy with the Samsung universe, from both the hardware and software perspectives. Axie Infinity’s platform not only facilitates player monetization, it has the potential to enable the use of token-based characters across different games. This opens up a whole new world of possibilities for value creation in the gaming sector.

Blockchain gaming has arrived thanks to the pioneering vision of Axie Infinity. We think facilitating real-world value in a fun blockchain environment is, well, a game changer.

Joan Kim is an Investor at Samsung Next. Samsung Next’s investment strategy is limited to its own views and does not reflect the vision or strategy of any other Samsung business unit, including, but not limited, to Samsung Electronics.

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