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Yield Guild Games has raised $4 million in funding, and that’s a big validation of the company’s belief that players should be able to earn a living playing video games.
It may sound like an outlandish idea, but it fits in a decade when we’ve seen fast growth for new careers, such as being a streamer or a YouTuber. Yield Guild Games is a company that formed around a group of players, all of whom play games where they can earn cryptocurrency rewards. Game-focused venture fund Bitkraft Ventures led the funding round.
“This round was interesting because, with the first round that we raised, it was pretty much mostly crypto funds,” said Gabby Dizon, the cofounder of Yield Guild Games, in an interview with GamesBeat. “This time, we have one of the most respected games and esports venture capital firms in the world. And they were interested in what we were doing because it fit their ideas of the future of work.”
The topic of getting paid to play games such as Axie Infinity is so interesting that it’s the subject of a documentary, Play-to-Earn: NFT Gaming in the Philippines.
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The NFT opportunity
The 18-minute film (which Yield Guild Games bankrolled and Emfarsis Consulting created) is about a group of people in the Philippines. They were out of work in the pandemic and turned to play a game, Sky Mavis’ Axie Infinity, that enables players to earn rewards as they play. Axie Infinity uses nonfungible tokens (NFTs) to uniquely identify digital items in its cartoon-style PC and mobile game. Players who play the game earn a virtual currency dubbed Smooth Love Potion. They can convert this into cryptocurrency and then convert it into real money.
The money has turned out to be a life-saving income for people in the film. I call this the Leisure Economy, where one day we will all get paid to play games. And this film shows the idea isn’t a joke, though it is very much in its infancy. The documentary about Axie Infinity and Yield Guild Games was recently screen by the Philippine government’s Department of Information and Communications Technology as part of National ICT Month.
NFTs have exploded in other applications such as art, sports collectibles, and music. NBA Top Shot (a digital take on collectible basketball cards) is one example. Built by Dapper Labs, NBA Top Shot has surpassed $500 million in sales, five months after going public. And an NFT digital collage by the artist Beeple sold at Christie’s for $69.3 million. Investors are pouring money into NFTs, and some of those investors are game fans. Lately, NFT prices have fallen, but NFT fans aren’t deterred.
Starting the guild
Yield Guild Games, a decentralized player guild cofounded by Gabby Dizon, formed a player group that would share proceeds and let members earn more money. I wrote about Dizon’s company, and he spoke about NFTs at our GamesBeat Summit 2021 event.
“If you look at it from a macro level, it looks like a real estate collective,” Dizon said. “We have the combination of being able to invest in valuable assets and providing the labor to work those assets and improve them and then taking a portion of the profit for themselves.”
Dizon thinks that companies like Yield Guild Games can help reduce unemployment around the world through its business model.
The documentary helped establish some credibility.
Dizon said that other game publishers want the guild to start playing their games as well, and Dizon believes that in the next game, pretty much all games will have play-to-earn communities.
“It’s still really early, and a lot of established studios are skeptical about it,” he said. “I think having an investment in us signals that it’s real.”
The Play-to-Earn model
Play-to-Earn is a new business model where real money can be earned by playing games. By actively participating in virtual world economies, players can earn rewards such as in-game assets and tokens, which can then be traded or sold, if the player so choose.
One example of a play-to-earn game that is supported by Yield Guild Games is Axie Infinity. Players earn an in-game token called
“Smooth Love Potion” (SLP) by winning battles against other players. SLP is required in-game to “breed” new Axies. Or, it can be sold on an open marketplace and traded for other cryptocurrencies.
Yield Guild Games is on a mission to accelerate the “play-to-earn” phenomenon that has been popularized by cryptocurrency-based games that enable players to monetize their time spent in-game by operating, leasing, and selling in-game objects. As a player community, Yield Guild Games invests in NFT assets in different games across the ecosystem and lends these assets out to its community of gamers to make it possible to earn an income from playing games.
NFTs have been recognized for their utility to deliver true digital rights to participants in blockchain games and virtual worlds. Because they cannot be easily duplicated, NFTs solve the cloning problem that has traditionally reduced the value of in-game assets.
Dizon believes that, instead of “wasting time” playing games for a long period of time, players can become owners of in-game assets, and that will help turn gamers into investors, helping secure their financial future in the long term through gameplay. Yield Guild Games’ Discord community has more than 15,000 members so far.
Many of Yield Guild Games’ members are in the Philippines, but Dizon said it is starting to spread out to other communities and regions like Indonesia and Brazil.
“It took us six months to get our first 1,000 Axie players,” Dizon said.
Now the money can be used to pay for scholarships for players, as it costs money to play enough of games like Axie Infinity to the point where players can start earning money.
Aside from Bitkraft Ventures, other investors include A.Capital Ventures, IDEO CoLab, Mechanism Capital, and ParaFi Capital, among others. Existing investors including Animoca Brands, Ascensive Assets, and SevenX Ventures. They also participated. Previously, Yield Guild Games raised a $1.325 million seed round from Delphi Digital with participation from BlockTower Capital, Scalar Capital, Gumi Cryptos Capital, and others.
Angel investors include GGWP CEO Dennis Fong, G2 Esports CEO Carlos Rodriguez, Sky Mavis CEO, Trung Nguyen, and Sky Mavis cofounder, Jiho Zirlin. The funding will be used to invest in NFT assets of play-to-earn games and expand the Yield Guild Games network by acquiring more players from around the world.
Jens Hilgers, the founding partner at Bitkraft Ventures, said in a statement that games and virtual worlds are increasingly becoming hosts of real economic activity, enabled and accelerated at scale through blockchain technology. Yield Guild Games is catalyzing this transition with forward-thinking concepts around the play-to-earn game model, he said. It’s like a glimpse at the future of work, Hilgers said.
The investment underlines Bitkraft’s commitment to blockchain and crypto technology. Bitkraft recently announced a strategic partnership with blockchain advisory firm Delphi Digital to help identify the most exciting investment opportunities at the intersection of crypto and gaming.
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