Animoca Brands acquires Sandbox game developer Pixowl for $4.875 million

Animoca Brands acquired Pixowl, the developer of The Sandbox user-created world mobile game, for $4.875 million in cash and stock.

The deal represents a nice outcome for Pixowl, which launched The Sandbox in 2012. The pixelated-art game didn’t make nearly as much money as rivals such as Minecraft or Roblox, but it did generate 40 million downloads and still has more than a million monthly active players, said CEO and founder Arthur Madrid in an exclusive interview with GamesBeat.

Pixowl also made mobile games such as Peanuts: Snoopy’s Town Tale, Garfield: Survival of the Fattest, and Goosebumps Horror Town. I wrote about Pixowl in 2013, close to its inception, when it had great success with a cartoon-style game called Doodle Grub. For its life, the company stuck with the whimsical cartoon-like games, which finally paid off with The Sandbox.

“There are not many studios that could be a good match with our brand strategy,” said Madrid. “Animoca Brands was one of them. And because we are working on the blockchain version of The Sandbox, it was good timing.”

Madrid said that Hong Kong-based Animoca Brands shared a vision in that both companies are interested in blockchain, the decentralized ledger that brings transparency and security to cryptocurrencies such as Bitcoin and Ethereum. Pixowl is in the midst of creating a blockchain version of The Sandbox, Madrid said. Blockchain is particularly relevant to The Sandbox because it has so many individual creators, who will be able to own and sell the items that they create.

Pixowl plans to launch its own marketplace for user-generated non-fungible tokens, where players will trade game assets and Pixowl will get some of the cut. That game will debut in 2019. Pixowl has 27 employees in San Franciso and Buenos Aires.

“We feel the blockchain is the way to get true ownership for our players, who are making a lot of content,” Madrid said.

Ed Fries, the former head of Microsoft Game Studios and cofounder of the Xbox, has been a special adviser to Pixowl and The Sandbox, and will continue his advisory role after the acquisition.

Under the deal, Animoca will pay $519,512 in cash, and the rest is in shares of Animoca Brands. Madrid acknowledged the price isn’t that high, but he said he believes in Animoca Brands’ strategy for the future.

“We want to be part of Animoca because we believer in it,” Madrid said.

The Sandbox is available for iOS and Android devices as a 2D pixel-based world creation game. Its players create approximately 100,000 new worlds and 25,000 new world elements every day. A quarter of all players have created more than five worlds. The free-to-play game has more than 350 elements you can use to build items. Some of them are free, and some you have to pay for.

Pixowl is also working on two additional titles featuring popular brands. The Loud House and WonderPark are in development and scheduled for launch later in 2018 and 2019.

“Our acquisition of Pixowl provides powerful strategic and operational synergies with Animoca Brands. Pixowl’s experienced developers will significantly increase our development capabilities,” said Yat Siu, cofounder and director of Animoca Brands, in a statement. “Its founders are highly respected game industry veterans who have developed multimillion dollar franchises. We believe the blockchain version of The Sandbox has incredible potential. Pixowl shares our vision of blockchain gaming, NFT’s, and games as a platform. Like us, it has a number of world-renowned brand licenses, including Snoopy and Goosebumps. We look forward to utilizing the many opportunities for growth conferred by this acquisition.”

Siu posted on Medium about why Animoca Brands did the deal.

Animoca Brands is listed on the Australian Stock Exchange, and it makes games based on popular intellectual properties such as Garfield, Thomas & Friends, Ever After High, and Doraemon. In addition, Animoca Brands is the exclusive China distributor of CryptoKitties.

As for mobile gaming, Madrid said, “It’s still a very exciting industry. You can look at games like Fortnite, Roblox, and Minecraft, and they are all doing very well on mobile. There’s a generation of children who love these kinds of games, and they think that match-3 games are boring.”