Animoca Brands Corporation Ltd has reported key unaudited financial and business highlights for the three months ending March 31, 2024.
The results reflect contributions from the company's key business units, including The Sandbox, TinyTap, Darewise Entertainment, nWay, Eden Games, Blowfish Studios, GAMEE, Pixowl, Forj, Grease Monkey Games, Motorverse (formerly REVV Motorsport) and Crazy Defense Heroes (TOWER).
Additionally, the report includes revenue from Web3 services and income from portfolio investments and partnerships.
Key financial highlights
As of March 31, 2024, the company recorded (unaudited, non-IFRS measures) bookings of US$90 million for the three months, compared with US$52 million in the first quarter of 2023, representing a 72% increase.
Bookings in the first quarter of 2024 include:
(i) $65 million from Digital Asset Advisory (DAA), which includes fees from token advisory, trading and blockchain node operations;
(ii) $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;
(iii) $6 million from Investment Management, which includes realized gains from digital asset investments and fees from Animoca Ventures.
Eighty per cent of Q1 bookings were achieved by the Digital Asset Advisory business and other projects driven by Animoca headquarters.
- Operating expenses for the three months ending March 31, 2024, were US$55 million, compared with US$64 million in the first quarter of 2023, representing a 14% decrease.
- Asset balances as of March 31, 2024, were reported in a prior announcement (refer to the announcement of April 17, 2024). For convenience, the balances are included below:
- Cash and stablecoin balances of US$291 million.
- 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.
Business model update
Animoca has continued to expand its vision to deliver digital property rights to the world's internet users, thereby creating a new asset class and building new economies with a more equitable digital framework that will improve people’s lives.
Initially focused on developing the gaming sector and making ecosystem investments, over the past 18 months, the company has attracted world-class talent, enabling it to execute its vision more diversely and strategically.
The company’s business model now comprises three synergistic pillars, briefly described below.
Digital Asset Advisory (DAA)
Animoca Brands offers comprehensive services for digital asset projects looking to launch tokens or non-fungible tokens (NFTs). These services include tokenomics design, smart contract advisory, exchange listing support, launch strategy, decentralized autonomous organization (DAO) setup, node operations and liquidity provisioning.
In the fiscal year 2022, DAA constituted approximately 25% of the company’s total bookings, increasing to about 72% in Q1 2024. Currently, more than 150 projects are in the DAA pipeline.
DAA revenue is primarily earned via advisory fees (in tokens) and trading fees, providing diversification and resilience to the company’s business model under volatile market conditions.
Web3 Operating Businesses
Since 2018, the company has focused on building Web3 applications and platforms through Animoca Brands, its subsidiaries and investments. Projects such as The Sandbox, Mocaverse, Tinytap and Anichess are developing Web3 products and platforms spanning gaming, metaverse, artificial intelligence (AI), education and digital identities.
In Q1 2024, the company’s operating businesses accounted for approximately 22% of bookings. Revenue from these businesses is primarily generated through token and NFT sales, as well as transactions within the platforms, often concentrated around application and platform launches.
Investment Management
Animoca Brands has been investing in Web3 technologies since 2018, significantly enhancing the company’s industry expertise.
As of Q1 2024, Animoca Brands had more than 450 investments in its portfolio, including those from its balance sheet, venture fund Animoca Ventures and various accelerator partnerships.
Revenue from investment management is earned through management fees from Animoca Ventures and the sale of tokens and exits from equity positions in the company’s portfolio.
The DAA business originated from the company’s extensive reach in the Web3 ecosystem via its investment management and Web3 operating businesses.
Today, most projects in the DAA pipeline are sourced from the over 450 minority investments in the company’s portfolio, providing a revenue stream in addition to realized gains. The operating businesses also offer opportunities for DAA and investments through their various partnerships and activities.
Additionally, the company is developing a fourth pillar, expected to launch later in 2024, focused on building Web3 and blockchain applications for larger institutions, such as the company’s partnership with NEOM in Saudi Arabia.
Animoca Brands is also pursuing initiatives with stablecoins and decentralized physical infrastructure networks (DePINs).
Animoca business highlights
Digital Asset Advisory (DAA)
In Q1 2024, DAA was responsible for 72% of total bookings, making it Animoca Brands' largest revenue source.
The company invested in and supported projects such as Farcana (FAR), Pixels (PIXEL) and zkSync (ZK). It provided trading services for more than 15 projects and acted as a node operator for 17 projects, including TON and RONIN.
By the end of Q1 2024, Animoca Brands had more than 150 deal opportunities for DAA, driven by improved market sentiment.
Mocaverse and Moca ID
The Mocaverse platform, aimed at creating the largest Web3 game publishing platform, saw significant growth.
By the end of Q1 2024, Mocaverse had created 1.5 million MOCA IDs, a 500% increase from the previous quarter.
Partnerships were established with digital asset exchanges OKX and KuCoin, each onboarding over 150,000 new wallet customers.
Mocaverse also formed user activation partnerships with Pixelmon, Param Labs and XION, and collaborated with Aethir for node offerings.
Open Campus and Open Campus ID
Open Campus, a decentralized education platform, launched Open Campus ID (OC ID) in January, issuing more than 100,000 OC IDs by March 2024.
The platform aims to enhance educational experiences by providing on-chain verifiable credentials.
Open Campus also launched OC100 in partnership with ForbesWeb3, identifying top educators and thought leaders in Web3.
Anichess
Anichess, developed with Chess.com and Magnus Carlsen, launched PvE daily chess puzzles in January and secured over one million registered players.
In March, Anichess introduced its Season 1 leaderboard, ranking players based on gameplay and social participation.
GAMEE
GAMEE, Animoca Brands' gaming studio, expanded its operations on Telegram, integrating Web3 gaming and launching the WAT Protocol on The Open Network (TON). It achieved over 3 million daily active users and 5 million followers on social media.
Global expansion
In March, Animoca Brands entered a Memorandum of Understanding with King Abdulaziz City for Science and Technology (KACST) to advance the Web3 and gaming ecosystem in Saudi Arabia, including establishing a Web3 Hub in Riyadh.
Mocaverse also expanded its partner network in South Korea to integrate and export Korean Web3 culture.
Thought leadership
Animoca Brands' executives presented on the role of the games industry in Web3 development to the UK All Party Parliamentary Group on Metaverse and Web3.
The company continues to provide global thought leadership through various platforms, with its executive chairman serving on the Hong Kong Task Force on Promoting Web3 Development.
Capital raising activity
The Sandbox raised US$20 million in convertible notes with a two-year maturity and 10% interest from institutional investors, concluding in Q1 2024 at a valuation cap of US$1 billion.