Thirdverse raises $20M and names Gumi founder Hironao Kunimitsu as CEO

Thirdverse raised $20 million and named Gumi founder Hironao Kunimitsu as its CEO as he trades mobile gaming for virtual reality and the metaverse.

That’s a big move for one of Japan’s entrepreneurial gaming CEOs, who rose to prominence in the mobile gaming era and is now betting big on VR. Thirdverse develops virtual reality games such as Swords of Gargantua, and Kunimitsu has been increasingly impatient in his aim of establishing VR and the metaverse as the next great entertainment platforms.

He helped pioneer modern mobile games in Japan by starting Gumi in 2007. The Tokyo-based mobile game company published games such as Brave Frontier. As CEO, he took the company public in 2014. He cofounded Thirdverse in 2020, and he also started the Virtual Reality Fund, Gumi Cryptos Capital, and several VR incubators in Tokyo, Seoul, and Helsinki.

Now Kunimitsu is giving up all his roles in Gumi (most recently, he was chairman) and will now run Tokyo-based Thirdverse alongside cofounders Kiyoshi, Shin, Satsoshi Ban, and Masaru Ohnogi. And he’s doing that because he believes that technologies such as VR, gaming, and blockchain will usher in the metaverse, the universe of virtual worlds that are all interconnected, like in novels such as Snow Crash and Ready Player One — and Japanese anime such as Sword Art Online.

He said he will leverage his experience in gaming, VR, blockchain, and expanding global businesses into new markets to help accelerate Thirdverse’s growth. I interviewed Kunimitsu at our GamesBeat Summit: Into the Metaverse event in January, and he said that the story behind  Sword Art Online inspired him to think about the same kind of metaverse as envisioned in Ready Player One.

The Thirdverse investment

JAFCO Group led the investment in Thirdverse, with participation from Presence Capital, Sisu Ventures, Incubate Fund, and Animoca Brands. Additionally, video game producer and founder of inXile Entertainment Brian Fargo has joined the Thirdverse advisory board.

Ohnogi, who once demoed an early version of Swords of Gargantua for me, said in a statement that he is delighted that Kunimitsu is joining as CEO to expand the global business and support the mission to create the metaverse.

Why Kunimitsu separated the companies

Above: Swords of Gargantua.

Image Credit: Steam

It’s a risky move to switch from the big public company, Gumi, to the startup, since Thirdverse has 60 people and Gumi has more than 730. Thirdverse is in a more speculative stage of its life cycle, but that’s what Kunimitsu find exciting.

Kunimitsu said Thirdverse is building a world-class tech development and publishing team that spans gaming, VR, and blockchain. With the additional funding from Animoca Brands, the company will also drive its multi-year vision of the metaverse, he said. Kunimitsu said that he prepared for the CEO change by buying ownership of Thirdverse from Gumi last year.

“I have completely stepped down from Gumi, and I am no longer involved in daily operations,” Kunimitsu said.

Hiyoyuki Kawamoto has assumed the job of CEO of Gumi.

“For now, Gumi is fine and I will focus on Thirdverse,” Kunimitsu said. “VR and blockchain are my new stage.”

VR’s payoff

He noted it was hard to keep investing in VR at Thirdverse while it was owned by the public company, Gumi, because investors care about profits. VR has taken a long time to incubate, and it’s better to separate it as a separate, privately owned company that can afford to take risks without having to worry about public company investors, Kunimitsu said.

“I was doing VR since 2015,” he said. “Finally, it is now growing. I decided I want to put all of my effort into this new challenge.”

He counted off the years, one by one, 2015, 2016, and so on.

“Finally, it is starting to grow, after seven years,” he said.

He credited to the launch of Facebook’s Oculus Quest 2 wireless VR headset, which started out as low as $300 when it debuted last fall. After that, sales of Swords of Gargantua started growing again.

NFTs and blockchain

Above: My Crypto Heroes

Image Credit: Gumi

In addition to Thirdverse, Kunimitsu is investing in blockchain gaming through Gumi Cryptos, which is a venture fund focused on crypto games and nonfungible tokens (NFTs), which use the transparent and secure ledger of the blockchain to ensure authenticity of digital items. The NFTs are a new way to monetize games because they can authenticate rarity in game items, allowing them to be sold for higher prices. NFTs are also a key to the metaverse as they will help players take avatars and other items from one game to another. Since NFTs can be offered as rewards in games, Kunimitsu hopes they can be used to enable gamers to make money from playing games.

“Many times parents said games are a waste of time,” he said. “Some kids make money from playing games, but esports is very tough. That ratio, the chance to make money from esports gamse, is as difficult as becoming a baseball player or football player.”

But with NFTs, the game companies have the potential to create real economies inside virtual worlds that will enable a lot more people to make a living playing games, he said.

Kunimitsu also started the blockchain startup Financie, and he was a major investor and board member for Double Jump.Tokyo, which created the hit blockchain game My Crypto Heroes.

Future vision

Above: Swords of Gargantua has expansions.

Image Credit: Thirdverse

Kunimitsu said Thirdverse has two VR games in development, and it will use the new round of investment to bring those games to the market. The gameplay will include multiplayer within VR environments.

“VR and NFTs combined is the future of the metaverse,” he said.

As far as his vision for Thirdverse, that has never changed over time, he said. The idea is to create a third place on the metaverse, in addition to the home and work places, where people can enjoy themselves.

“Before that happens, we have to make a big hit game,” he said. “This is the future of games and the internet. I think it is a very exciting moment.”

He compared it to the days of starting Gumi, when mobile games finally took off. He believes the metaverse will include games and social networking. While he is excited that Facebook is going to invest in the metaverse, Kunimitsu believes one part of the vision is very different. He wants to assume fictional identities, rather than be himself on the metaverse, as Facebook is likely to require real identities.

“I want to be someone who is not the real me,” he said.