San Francisco-based Magic Eden is a community-focused marketplace for non-fungible tokens (NFTs), and now it will fund its own games. On top of that, the company is also expanding its own internal gaming division, Eden Games.
It has also hired new gaming leaders and formed new partnerships with game developers. While blockchain games have been controversial, Magic Eden believes Web3 games will be an on-ramp for millions of users to use blockchain, the transparent and secure digital ledger.
The launch of Magic Ventures and the appointment of Tony Zhao as its head of gaming Investments will allow Magic Eden to invest in promising games and gaming infrastructure, which will bolster the growth of Web3 gaming, the company said.
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“The fund is only one part of our solution to help developers in the Web3 ecosystem,” said Zhao in an interview with GamesBeat. “We are providing end to end solutions, which includes our launchpad for NFT minting, our wallet solutions, game marketplace solutions, and in the future cross-chain solutions. This fund is just one way to support amazing developers and to help them succeed.”
Prior to joining Magic Eden, Zhao was a key member of the business development and investment team for Tencent Games, where he focused on investing in up-and-coming games, acquiring world-class studios, and forming strategic partnerships across the entire Tencent Games portfolio.
Zhao said the company isn’t disclosing how big the Magic Ventures fund is. He did say the company is not shooting for a high rate of return. Rather, it wants to help make its partners successful.
“This is part of a package bundle to help developers make sure that they can have the best support from us in building their games,” Zhao said. “We’re not a VC fund. The purpose of this fund is not to make bets. It is to support and grow the Web3 ecosystem overall. We’re going to partner with the developers to make them feel comfortable working with us.”
The company has competition like Justin Kan’s Fractal, but Magic Eden is the leader in terms of transactions on the Solana blockchain.
Tiffany Huang, head of content and marketing at Magic Eden, said in an interview with GamesBeat that the company accounts for 90% of NFTs sold on Solana, and Magic Eden recently raised $130 million in a funding round that valued Magic Eden at $1.6 billion. Magic Eden has a platform launchpad to market inaugural NFTs, and it has a storefront for secondary NFT trading, where players and other users can sell their NFT collections.
Magic Eden has more than 10,000 collections listed, and it has launched nearly 300 projects.
“We believe that gaming will be the next big vertical on Web3 for NFTs, Huang said.
Jack Lu, CEO of Magic Eden, said in a statement, “The world of gaming is a massive market that has just started to venture into the world of Web3. We intend to deepen our relationships with both gamers and game developers alike to champion the future of games on the blockchain. With Magic Ventures, we are excited to invest in the next wave of creativity and innovation in Web3 gaming.”
Zhao joins Yoonsup Choi, Harrison Chang, and Matt Biamonte, who all have backgrounds in professional gaming and esports. Choi and Chang are championship-caliber former League of Legends and Fortnite players and, along with Biamonte, have all individually launched NFT projects.
The trio’s intimate knowledge of both traditional gaming and NFTs will provide developers the dedicated advisory and operational support needed for go-to-market success, the company said.
Zhao said he was attracted to Magic Eden and Magic Ventures because it represented the opportunity to build something new at an early stage. He said that while Web3 games cannot compete today with traditional games like Halo or Call of Duty, they still have the potential for growth because of new technologies that they’re tapping.
“The next big Web3 games are not going to look like traditional games,” he said. “I’m looking for new experiences for players using Web3 going forward.”
Alongside the establishment of gaming investments arm Magic Ventures, Eden Games has also finalized partnerships to power marketplaces for games including, but not limited to, Aurory, Genopets, Mini Royale: Nations, Nekoverse, Remnants, Yaku, Halfwish, VBA, and Sugar Realm.
Magic Eden intends to continue building out a suite of essential tooling and services for games to enable developers to focus on building gameplay, rather than worrying about blockchain tech. Huang said that Magic Eden has a close relationship with its creators, and it has emphasized the building of tools such as the launchpad for creators.
“With the hiring of Tony, Harrison, Yoon, and Matt, we are building a strong foundation from which we can continue to collaborate with exciting innovators in the Web3 gaming ecosystem,” Lu said. “Eden Games is a fast-growing sector of our business and we’re excited to continue its development.”
Eden Games has ushered in over 50 games and seen over 310,000 users mint or trade gaming-related NFTs on the company’s marketplace. Since its inception, the marketplace has seen 21.2 million SOL (worth nearly $2 billion) traded on secondary markets since it launched in September 2021. The company has more than 100 employees.
In June, Magic Eden represented over 92% of all gaming NFTs traded on Solana. Magic Eden is excited to build the top Web3 gaming-compatible NFT platform enabling game developers to execute on their project vision and players to discover new games and connect across other digital cultures.
Huang said Magic Eden doesn’t incentivize “wash trading,” where users sell to themselves to hype an NFT before unloading it. The company also screens content and verifies NFT collections in an attempt to minimize fraud where perpetrators sell fake version of NFTs.
The company has signed more than 10 white-label marketplace agreements with different collections to build custom marketplaces. Crypto markets have tanked lately.
Zhao said it takes three to five years to make solid games and so the company isn’t looking for an immediate return. That means it isn’t worried about the crypto winter that has set in with the latest cryptocurrency market crash.
“For us, it doesn’t matter if it’s bear market or not,” Zhao said. “We see this as a long-term bet. Regardless of market conditions, a good-quality game will always find users, find lovers. That’s the beauty of our industry.”
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