Blockchain Gaming Startup Raises Round on Heels of Surging Play-to-earn Demand

Blockchain-based gaming platform OpenBlox has raised its seed round as the company looks to ride a wave of interest in play-to-earn gaming in preparation of its first game launch later this year.

OpenBlox raised about $3 million at a valuation of about $30 million and plans to earmark the funds for product and business development, game design and additional staffers. The round was led by venture capital firm Shima Capital, a recently launched San Francisco firm helmed by veteran venture capitalist Yida Gao. Shima, after this story was published, reduced their contribution by an unspecified amount.

Venture firms including 3Commas Capital, 100×100 Venture Capital, Digital Strategies and MC Ventures were also set to participate in the seed round.

MC Ventures withdrew their commitment after publication, as did Digital Strategies. Representatives for the firms did not respond to a request for comment.

OpenBlox, which employs ethereum virtual machine (EVM) technology in an effort to create a bridge between blockchains, also has an NFT marketplace in the works — and in the meantime has been partnering with a number of prominent gaming guilds.

The team plans to roll out three games — players can deploy blockchain applications, including NFT (non-fungible tokens), across the trio of metaverses. The gaming platform intends to create a Web3-powered community, as opposed to minting digital collectibles on a one-off basis — an approach that may deliver immediate profits, but one that rarely drives sustained user engagement.

It’s planning its first experience, dubbed RunBlox, to be released publicly in May on the Avalanche blockchain — along with an in-game token, $RUX. To play the game, users are required to hold a RunBlox shoes NFT, which will be partially distributed via an airdrop.

Its digital universe is based on a collection of 7,998 genesis blox NFTs that can breed via in-game mechanics, similar to blockbuster play-to-earn giant Axie Infinity.

The fundraise comes as a growing number of top-tier traditional game-makers — including Ubisoft — are looking to employ blockchain elements.

Those blue-chip, so-called AAA developers have the leg up on game design and gameplay, industry participants say, but have faced a tough sell from gamers wary of NFTs because of environmental concerns.

After starting with just Ethereum, the team has pivoted onto the Arbitrum blockchain, a side-chain, as it works to expand its decentralized finance (DeFi) dealings.

The startup plans to introduce an in-game token, which perhaps could convey governance features down the line. The longer-term plan is to create a decentralized autonomous organization (DAO) that would be controlled by game players.

Gao, who has previously backed other play-to-earn Web3 startups, said the team has “deep experience” in both traditional video games and as crypto natives. OpenBlox is also working with a number of top-tier developers and graphic designers, which helps, he said.

The challenge is to bridge avid traditional video gamers — accustomed to stunning graphics and engaging gameplay — with legions of crypto natives who may be less choosy on the gameplay front, but more particular when it comes to the blockchain technology in play and the potential to make money as a consumer in exchange for their time and loyalty.

“You want to basically have these new types of ways to play games, where the ownership is in the hands of the players, not the developers, and you’re able to bring in other users and bring in other counterparts to the space,” Gao said. “So, instead of having all the graphic designers and the people making the games in the studios control everything, you can bring in others.”

Elle Sia, a Web3-focused investment director at OpenBlox backer Digital Strategies, said the game’s graphics are significantly sharper than your average crypto-native game. 

And the team, according to Sia, has been taking pains to ensure the gameplay is fun and engaging.

“It needs to be fun,” Sia said. “Otherwise, no one’s going to play it. Otherwise, it becomes a bit of a Ponzi, so far as you need new players to come in.”

The startup will also look to lean heavily on its partnerships with gaming guilds — including Real Deal Guilds (RDG), Ancient8, Good Games Guild and BreederDAO — to drum up interest in the metaverse venture and gain players worldwide. 

Dr X, the pseudonymous OpenBlox founder, said in a statement that the startup’s incoming investors “bring a large network of stakeholders” to the venture.

Updated Dec. 14, 3:15 pm ET: Shima Capital reduced the size of its commitment after this story was published, and Digital Strategies, as well as MC Ventures, rescinded their capital pledges.

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