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Animoca Brands investor update for the fiscal year ended on 31 December 2023

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10 July 2024 - Animoca Brands Corporation Limited (“Animoca Brands'' or the “Company”) is pleased to report key unaudited financial and business highlights for fiscal year 2023 (“FY2023” or the “Period”).

 

These results include contributions from the Company’s key business units including but not limited to The Sandbox, TinyTap, Darewise Entertainment, nWay, Eden Games, Blowfish Studios, GAMEE, Pixowl, Forj, Grease Monkey Games, Motorverse (previously known as REVV Motorsport), and Crazy Defense Heroes (TOWER), in addition to Web3 services revenue and revenue arising from portfolio investments and partnerships.

 

Key financial highlights as of 31 December 2023 (unaudited, non-IFRS measures)

 

  • Bookings(1) of US$280 million for the 12 months ending on 31 December 2023, compared with US$402 million for the prior 12 months ending on 31 December 2022. The decrease in bookings was mainly due to the slowdown of economic activities in the overall digital asset market space and the challenges faced by crypto-related businesses following the FTX scandal, the collapse of Luna and TerraUSD, and similar events connected to the crypto winter that developed in 2022. Bookings were achieved from the following business segments:

(i) US$77m in digital asset advisory activity, which includes fees from token advisory, trading, and blockchain node operations; 

(ii) US$182m in sales from subsidiaries and projects incubated by Animoca Brands, which include token sales, NFT sales, in-app purchases, and other non-blockchain sales;

(iii) US$21m in investment activity, which includes realized gains from digital asset investments and investment management fees from Animoca Ventures. 

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  • Digital asset advisory revenues and realized gains from investment activity are generated by Animoca Brands headquarters and comprise 35% of total booking for 2023. 

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  • Despite the decrease in bookings year-over-year, performance improved toward the end of 2023 as digital asset markets strengthened. 2023 Q4 bookings increased 59% over the prior quarter. 

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  • Operating expenses of US$246 million for the 12 months ending on 31 December 2023, compared with US$234 million for the prior 12 months ending on 31 December 2022. Total expenses slightly increased in 2023 due to increase in the number of subsidiaries operating under the Animoca Brands group as a result of acquisitions in 2022. The increase was offset by cost reduction initiatives across all subsidiaries as well as the addition of a new business line providing digital asset advisory services. The second half of 2023 saw a 9% decrease in operating expenses compared to the first half of the year.

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  • Cash and stablecoin balances of US$175 million.

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  • Digital assets held on the balance sheet of US$203 million. Approximately 70% of these assets are held in a combination of BTC, ETH, APE, and MATIC.

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  • Off-balance sheet token reserves for Animoca Brands and its subsidiaries of approximately US$1.6 billion, which comprise approximately US$930 million in liquid(2) tokens and US$665 million in lower-liquidity(3) tokens. The reserves include Animoca Brands tokens such as SAND, EDU, REVV, TOWER, GMEE, and others.

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  • Minority investments in over 450 portfolio companies.

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  • Total capital raised from equity and convertible note issuance of US$83 million during fiscal year 2023. 

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  • The Company released 2020 audited financial statements in June 2023,  and is currently in the process of auditing 2021 financial statements. 

 

Note (1): “Bookings” is a non-IFRS measure of the total sales activity of the Company and is commonly used by companies in the gaming sector to more effectively represent economic performance. It represents the total sales activity of the Company combining revenue reflected on the income statement and deferred revenue, which is a liability on the balance sheet. Deferred revenue is an accounting concept that represents payments received for sales that have not yet been earned. It generally applies to digital assets sold in the Company’s games and applications. Although the Company collects payment for these sales, it is not able to recognize them as revenue on the income statement because there is an obligation to provide services within those games and applications in the future. As services are provided over time, deferred revenue will be recognized as revenue.

 

Note (2): Liquid tokens are defined as tokens listed on a top-tier centralized digital asset exchange and/or with a 24-hour trading volume of more than US$25 million. These include SAND and EDU.

 

Note (3): Lower-liquidity tokens are defined as tokens listed on lower tier centralized exchanges or decentralized exchanges and/or with a 24-hour trading volume of less than US$25 million.


 

Key business highlights

 

Despite broad sector headwinds during the prolonged crypto winter, throughout FY2023 the Company continued to focus on developing, expanding, and funding its products, services, and subsidiaries, enabling further diversification of its business.

 

Digital Asset Advisory

Throughout 2023 Animoca Brands successfully expanded its Digital Asset Advisory (“DAA”) business, which was established in 2022 to provide Web3 projects with token advisory, tokenomics, marketing, listing, node operation, and trading services. In FY2023, DAA accounted for 27% of total bookings, making it the Company’s fastest growing segment.  Many of the Web3 projects served by the DAA business are sourced from the more than 450 companies in Animoca Brands’ minority investment portfolio, which has resulted in a strong synergy between these two business lines. 

 

Launch of Open Campus and EDU Token

Animoca Brands is an incubator and launch partner of Open Campus, a decentralized platform that aims to tackle the key challenges facing the education sector. At its core, Open Campus is an ecosystem that connects learners, educators, content creators and educational institutions, enabling new ways of collaboration and value creation through blockchain technology. Open Campus’s governance and utility token is EDU Token, which was launched in April 2023 on Binance. EDU Token also powers Open Campus's core protocol, including EDU Chain, Open Campus ID and Publisher NFTs. By the end of FY2023, Open Campus had onboarded over 50 companies (representing up to 20 million addressable learners). To date, Open Campus has sold out two seasons of Publisher NFTs, raising over US$670,000 and minted over 130,000 Open Campus IDs.

 

Launch of Mocaverse and Moca ID

Mocaverse is the membership NFT collection for Animoca Brands’ ecosystem of subsidiaries, projects, portfolio companies, shareholders, and partners. Through Mocaverse, the Company is leveraging this ecosystem to build the largest Web3 game publishing platform. Users of Mocaverse will be able to access games and participate in other on-chain activities to earn Realm Points and incentives provided by partners. In March 2023, Animoca Brands completed the initial Mocaverse NFT mint, generating 3,552 ETH (US$5.5 million at the time) in sales volume. In October 2023, Mocaverse introduced Moca ID, an on-chain decentralized identifier (DID) for Animoca Brands’ ecosystem. By the close of 2023, Mocaverse had attracted 207,738 MOCA IDs (1.5 million as of the date of this announcement) and more than 20 partners to its ecosystem. 

 

Partnership with TON; GAMEE on Telegram

On November 28, 2023, Animoca Brands became the largest validator on TON Blockchain as part of a strategic collaboration with the TON Foundation that will facilitate rapid viral onboarding of Telegram users into Web3, using as catalysts GAMEE games and the games of other companies in Animoca Brands’ portfolio. This move aims to integrate Web3 gaming into Telegram, a platform with an existing user base of over 800 million, as recently demonstrated by the official launch of Notcoin (NOT) in January 2024 (for information about Notcoin, please refer to this Cointelegraph article)

 

Animoca Brands’ game studio GAMEE first launched its games on Telegram in 2016 when it became the global gaming launch partner of Telegram Messenger. Today, GAMEE is the largest gaming community on Telegram, with over 80 million users and 3 million daily active users mining WatPoints. GAMEE has accrued 10 billion gameplays across 50 casual games on its mobile gaming platform Arc8 and the @gamee bot on Telegram.

 

Continued expansion of The Sandbox

The Sandbox is a gaming metaverse where players and creators can make 3D assets and experiences that can be monetized via NFTs. The Sandbox provides a voxel-styled universe with gameplay based on digital ownership and robust in-game economics based on the utility token  SAND and the other tradable assets within the virtual world. The circulating market capitalization of SAND increased to US$1.2 billion as of the end of 2023, from US$0.6 billion the previous year. The Sandbox generated a total of US$64 million of new bookings in 2023 from the sale of SAND and $5 million from the sale of NFTs. At the end of 2023 The Sandbox had 5.8 million total users, 280,000 creators, and more than 200 partners. 

 

Capital raising activity

  • Subsidiary TinyTap raised US$5 million via Simple Agreements for Future Equity (SAFEs) from investors including Liberty City Ventures, Kingsway Capital, GameFi Ventures and others (see announcement of 25 April 2023).  

 

  • Subsidiary Anichess raised US$1 million in an oversubscribed seed round via SAFEs from investors including GameFi Ventures, The Operating Group, Koda Capital, Bing Ventures, 708 Capital, Asymmetry Capital, and others (see announcement of 22 June 2023).

 

  • Animoca Brands issued US$5 million in convertible notes to MITSUI & CO., LTD in May 2023 at a conversion price of A$4.5 per share, based on the same terms of the convertible note issuance announced in September 2022 (for issuance details refer to announcement of 8 September 2022).

 

  • Animoca Brands attracted US$32 million for its project Mocaverse (of which US$20 million was received in 2023) in two tranches via SAFEs for new ordinary shares of Animoca Brands, which included utility token warrants. Participants in the raise were sophisticated and professional investors including CMCC Global, Kingsway Capital, Liberty City Ventures, GameFi Ventures, Block1, OKX Ventures, Foresight Ventures, Polygon Ventures, Dapper Labs, and others (refer to the announcements of 11 September 2023 and 8 December 2023).

 

  • Investors who participated in the Company’s 2021 capital raise of US$139 million in two tranches (see announcement of 1 July 2021), exercised their options to subscribe for 1 additional share for every 4 subscription shares under the 2021 Share Subscription Agreement, raising an additional US$30 million via the issue of 35.4 million shares as per the 2021 warrant agreement.

 

Thought leadership

In April of 2023, Yat Siu, Animoca Brands’ co-founder and Executive Chairman, gave a TED Talk titled “The Dream of Digital Ownership, Powered by the Metaverse''. The talk was well-received and has been viewed approximately 2.4 million times on TED’s platform and TED’s YouTube channel.

 

In March of 2023, Animoca Brands’ CEO of Investments Robby Yung was invited to present to the United Kingdom All Party Parliamentary Group on Metaverse and Web3 regarding the role of Web3 in the metaverse. In December 2023 Mr. Yung was also asked by the United Kingdom All Parliamentary Group on Blockchain Technologies to present on the adoption of Web3 technology in the UK and how the UK government can be more supportive of the growth and regulation of Web3 businesses in the country. 

 

In May 2023, Evan Auyang, Animoca Brands’ Group President, was appointed to the Hong Kong Securities and Futures Commission (SFC) Fintech Advisory Group. The Fintech Advisory Group facilitates the SFC’s Fintech Contact Point to: obtain information on the latest trends of Fintech; collect stakeholders' input on specific Fintech themes; identify the opportunities, risks and regulatory perimeter implications of Fintech; and broaden the understanding of Fintech as an evolution of the financial services industry.

 

In July 2023 Yat Siu was appointed to the Task Force on Promoting Web3 Development established by the Government of the Hong Kong Special Administrative Region. The territory’s Financial Secretary announced in the 2023-24 Budget the establishment of the Task Force to provide recommendations on the sustainable and responsible development of Web3 in Hong Kong. In a statement, Mr Siu noted that the Task Force “firmly establishes Hong Kong as the leading example of a mature and highly modernized economy that embraces the remarkable opportunities presented by Web3, blockchain, virtual assets, and the open metaverse” (see announcement of 3 July 2023). 

 

In September 2023, Animoca Brands held an Investor Day in Sydney, in which the members of Animoca Brands' executive committee and leadership teams from Animoca Brands subsidiaries Blowfish Studios and SPORTPASS met shareholders, portfolio companies, and partners and shared key businesses and performance, projects, and market analysis. The presentation and video highlights of the event are available here.  

 

In 2022, Animoca Brands co-founded the non-profit industry consortium OMA3, the Open Metaverse Alliance for Web3, where Robby Yung serves as Vice Chairman, while Animoca Brands’ Head of Tokenomics Mohamed Ezeldin leads the OMA3 Token Working Group. Over the course of 2023, OMA3 has produced key industry white papers on interoperability for Web3 content and grown to nearly 100 member organisations. 

 

During 2023, Animoca Brands saw a significant growth in its social media presence, gaining over 65,000 followers across its various platforms as it expanded its reach, audience, and engagement levels. Animoca Brands’ X (formerly Twitter) account experienced the most substantial increase with a 30% year-on-year organic growth rate, resulting in over 225,000 followers at year’s end.

 

The Company continued to enjoy a high level of exposure in the media during the Period, in particular among gaming, blockchain and crypto-related media outlets; a list of relevant media articles for the year 2023 is available here.

 

Industry awards and recognition

During 2023 Animoca Brands received various awards and recognitions, including being named:

 

Additionally, Yat Siu, the co-founder and executive chairman of Animoca Brands, was ranked #6 in The Cointelegraph Top 100, which recognizes the top influencers in crypto and blockchain; Sebastien Borget, co-founder and COO of The Sandbox, was ranked #30. Mr Siu was also recognized as one of the “honorable 40” in CoinDesk’s Most Influential 2023. 

 

Expansion into Saudi Arabia

In October 2023 the Company announced it entered into a Strategic Partnership with NEOM Company (“NEOM”) to drive regional Web3 initiatives in line with the Saudi Vision 2030 plan (refer to announcement of 30 October 2023). Additionally, the Company and NEOM Investment Fund entered into a Term Sheet for a proposed US$50 million investment by NEOM Investment Fund into Animoca Brands, consisting of US$25 million in convertible notes at a conversion cap price of A$4.50 per share (with substantively the same terms as the strategic funding round disclosed in the Company’s announcement of 8 September 2022), and US$25 million to be invested in purchasing the Company’s shares on the secondary market.

 

Animoca Brands is working with NEOM to develop Web3 enterprise service capabilities with global commercial applicability, which will be deployed to support technology advancements in Riyadh and the NEOM region. These projects will include a range of Web3 initiatives, including plans to establish a hub within NEOM to nurture the local Web3 ecosystem and bring in extensive capabilities from across Animoca Brands and its subsidiaries, partners, and broad portfolio of investments.

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About Animoca Brands

Animoca Brands (ACN: 122 921 813), a Deloitte Tech Fast winner, a Fortune Crypto 40 company, one of the Top 50 Blockchain Game Companies of 2024, and one of the Financial Times’ High Growth Companies Asia-Pacific 2023, is a Web3 leader that leverages blockchain to deliver digital property rights to consumers around the world to help to establish the open metaverse. The company develops and publishes a broad portfolio of products including original games such as The Sandbox, PHANTOM GALAXIES™, Life Beyond, and Crazy Defense Heroes, and products utilizing popular intellectual properties from the worlds of sports and entertainment, such as The Walking Dead, Power Rangers, MotoGP™, and Formula E. It has multiple subsidiaries, including The Sandbox, Blowfish Studios, Quidd, GAMEE, nWay, Pixowl, Forj, Lympo, Animoca Brands Japan, Grease Monkey Games, Eden Games, Darewise Entertainment, Notre Game, TinyTap, SPORTPASS, PIXELYNX, WePlay Media, Gryfyn, and Azarus. Animoca Brands is one of the most active investors in Web3, with a  portfolio of over 450 Web3 investments, both directly and through Animoca Ventures, including Yuga Labs, Axie Infinity, Polygon, Consensys, Magic Eden, Fireblocks, OpenSea, Dapper Labs, Yield Guild Games, and many more. For more information visit www.animocabrands.com or follow on X (Twitter), YouTube, Instagram, LinkedIn, Facebook, and TikTok.

 

Contact: press@animocabrands.com

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