Did you miss a session from GamesBeat Summit Next 2022? All sessions are now available for viewing in our on-demand library. Click here to start watching.
CryptoKitties became a sensation after it debuted in November as a collectible game built on top of a blockchain and the Ethereum cryptocurrency. Now the Axiom Zen game studio is spinning it out as a separate company, and it has raised $12 million funding for this endeavor.
The idea behind CryptoKitties is to make blockchain technology accessible and relevant to everyday consumers. Andreessen Horowitz and Union Square Ventures led the round.
CryptoKitties don’t come with a cryptocurrency themselves. Rather, the company calls them cryptocollectibles, which use blockchain technology to authenticate ownership of a particular CryptoKittie character. Players can buy and sell those characters, and some of them are rare. You can think of CryptoKitties as a kind of Pokémon for the age of blockchain.
Since its launch, CryptoKitties has gained more than 1.5 million users. This doesn’t sound like a lot, but the studio says fans have conducted more than $40 million in transactions. And some of the game’s most popular cats have sold for the equivalent of more than $200,000. CryptoKitties got so popular that they accounted for as much as 30 percent of the volume of trading in Ethereum, one of the more popular cryptocurrencies.
Angel investors include Fred Ehrsam (former founder of Coinbase); Naval Ravikant (CEO and founder of AngelList); Mark Pincus (cofounder of Zynga); Bill Tai (board member of BitFury); William Mougayar (founder of Token Summit); Avichal Garg (partner at Y Combinator); Jeff Morris (head of revenue at Tinder); Balaji Srinavasian (founder of Earn.com) Josh Stech (vice president of business at Lending Home); Joshua Naussbaum (founder of Compound VC)j; and Tyler Gaffney (CEO of Entrepid).
Seed funds investors also include CAA Ventures, Digital Currency Group, YesVC, and Version One.
CryptoKitties isn’t much when it comes to gameplay. You can buy a kitten (with Ethereum) and hold on to it. You can breed kittens, which have different visual features, dubbed traits. Some of the traits are rarer than others. There are thousands of kittens in the game. Some of them breed fast, and others are slower. CryptoKittydex keeps track of trains and how common or rare they are.
In January, Axiom Zen partnered with Garfield developer Animoca Brands to publish CryptoKitties on mobile in China, Hong Kong, and Taiwan. The company is launching in China with localized web site and support. Axiom Zen is also launching an iOS beta app in the region, limited to just 5,000 users.
It might be odd for China to ban cryptocurrencies but to permit trading to happen for cryptocollectibles. But Axiom Zen sees CryptoKitties as one more sign that games are always at the forefront of emerging technologies and platforms. The company said that “digital scarcity and true ownership unlock billions of dollars of value and put power in the hands of creators and their fans.”
China has banned cryptocurrency trading, but Canada-based Axiom Zen said that regulators are OK with the game thanks to the distinction that it is dubbed a cryptocollectible.
In an email, CryptoKitties cofounder Bryce Bladon said earlier, “CryptoKitties are not cryptocurrency, and local regulators have confirmed that they are not classified as a security.”
GamesBeat's creed when covering the game industry is "where passion meets business." What does this mean? We want to tell you how the news matters to you -- not just as a decision-maker at a game studio, but also as a fan of games. Whether you read our articles, listen to our podcasts, or watch our videos, GamesBeat will help you learn about the industry and enjoy engaging with it. Discover our Briefings.