Andreessen Horowitz (a16z) has invested in the Philippine-based play-to-earn community Yield Guild Games. The investment, which also included Kingsway Capital, Infinity Ventures Crypto, Atelier Ventures, and others, totaled $4.6 million.
In conventional games, players earn points towards a leaderboard.
But in a raft of new blockchain games, players can earn in-game tokens, which can be converted to cryptocurrency and sold. Hence they can earn money, which can be significant in low-wage economies. But to play these games, the user often needs to buy a character to get started. That’s where Yield Guild Games comes in because it lends out these characters.
Due to Covid-19, the unemployment rate in the Philippines reached 8.7% in February 2021. And almost 10% of the employed population was looking for more working hours. In comparison, the unemployment rate in January 2020 was recorded at 5.3 %.
Yield Guild was founded by gaming entrepreneur Gabby Dizon who was looking to address the economic situation in his local province by kickstarting a play-to-earn economy.
Dizon began lending out characters in Animoca’s play-to-earn game Axie Infinity. The characters could earn tokens and exchange them for local currency. It’s claimed that some players earn more than in their traditional jobs and others were lifted out of poverty.
Yield Guild Games has formalized the process of lending in-game assets that are non-fungible tokens (NFTs). The tokens earned in the game should provide an income through gameplay or they can be used to buy the in-game asset originally lent to them. Yield Guild also has community managers that help onboard new players and receive a portion of recruited players’ earnings.
While Axie Infinity was the first, the games played by the community are not exclusive to any gaming developer or brand.
Since its founding in 2020, Yield Guild has attracted more than 4,700 ‘scholars’ that have borrowed assets, a 45,000 gamer community and earned over $8.6 million. As of now, the guild is paying out $1 million weekly.
The investment will help Yield Guild continue developing its play-to-earn economy through the purchase of in-game assets across its gaming ecosystem.
Yield Guild’s total funding to date is $22.4 million. Animoca contributed to a $4 million investment a couple of months ago and $12.5 million came from a public token sale in late July that sold out in 31 seconds.
“Right now there is a largely untapped economic opportunity in emerging markets to provide jobs by building a virtual economy in the digital world,” said Arianna Simpson, a general parter at a16z. “The way we define a “job” is quickly evolving because of crypto and gaming, and we think we’re just starting to glimpse what’s possible in this realm. (…) We’re thrilled to join this community as a partner and are excited to help establish NFT-based play-to-earn games as the next major innovation in gaming.”
In June, A16z announced a $2.2 billion fund, its third Crypto Fund, dedicated to blockchain and digital asset startup investments.
Meanwhile, Animoca recently launched a play-to-earn game under the REVV Racing brand and has a licensing deal with the Olympics for NFT-based gaming. NFT gaming startup Mythical Games raised $75 million in a Series B round of funding.