FTX, Solana Ventures and Lightspeed Create $100M Web3 Gaming Investment

FTX, Lightspeed Venture Partners and Solana Ventures have joined forces to create a $100 million Web3 gaming investment initiative, the companies said on Friday. 

The investment will focus on gaming studios, technology and projects that focus on the overlap between blockchains and gaming. 

Lightspeed has invested over $300 million in a range of early to late-stage gaming and crypto companies, including Epic Games, 1047 Games, TripleDot Studios, Faraway Games, FTX, Offchain Labs, Alchemy, Wintermute and others.

The initiative will help advance and develop new decentralized models for gaming as well as the tools developers need to build, according to a spokesperson for Solana Ventures. The first investment has already been deployed to Faraway Games, a Web3 gaming studio focused on “social games with player-driven and decentralized economies,” the release stated. 

“In many ways, it could be argued that blockchain’s application to gaming is a no-brainer because gamers are already accustomed to tokenization and purchasing in-game items,” the spokesperson noted. 

Some of the earliest games that exist have featured elements of virtual currency and brought in significant revenue for game studios and app stores, the spokesperson said. But as gaming evolved, in-game tokens and items have brought physical monetary value from the digital world, they added. 

The Solana blockchain has over 2.2 million non-fungible tokens (NFTs) and over 125 NFT collections, with over a dozen of blockchain-based games. “In the last few months, we’ve seen talented game builders leave their jobs at Riot, EA, Scopely, and other established gaming firms to build Web3 games on Solana,” Anatoly Yakovenko, CEO of Solana Labs, said in a statement. 

In 2020, the global gaming market was valued at $173.7 billion and is expected to jump 81% to $314.4 billion by 2026, according to a report. In general, there has been an increasing amount of interest in the Web3 gaming industry over the past year with game builders and developers moving from traditional gaming industries to build on Web3, said the Solana Ventures spokesperson.

“With the shift in focus to in-game assets, blockchain has the ability to solve a number of problems including eliminating fraudulent items, creating scarcity, and incentivizing more purchases by making items transferable across games,” they said, adding, “Play2Earn opportunities will also continue to monetize the industry, something that has historically been a major draw for gamers.”

Additionally, play-to-earn games like Axie Infinity have been able to provide players with rewards that were up to several times their monthly salaries, creating a “blockchain-based” living wage, said the Solana Ventures spokesperson. Axie users can trade, breed and battle non-fungible token (NFT) characters in the digital world. The gaming company passed $2 billion in all-time trading volume in September, according to DappRadar.

“We believe this new technology stands to cultivate the next phase of gaming innovation including the development of new decentralized models for gaming and while also bringing new builders into the space,” they added.

Earlier this week, Mythical Games closed a $150 million Series C round led by Andreessen Horowitz, a16z, Blockworks reported. The next-generation gaming technology studio’s valuation is now $1.25 billion, meaning it has reached unicorn status in under three years after being founded in 2018.