Key Takeaways
- Animoca Brands is targeting a U.S. stock exchange listing for 2025.
- Web3 gaming represents approximately 25% of Animoca Brands’ current investment portfolio.
- CEO Robby Yung highlighted the crypto market’s resilience post-flash crash due to mature structures and risk management.
- The company is returning to public markets after delisting from the ASX in 2020 to focus on Web3.
Animoca Brands Eyes U.S. Public Listing
Animoca Brands is preparing for a significant move back into public markets, with plans for a U.S. IPO targeted for 2025. This strategic decision follows the company’s delisting from the Australian Securities Exchange (ASX) in 2020, a move that allowed for a dedicated pivot towards Web3, cryptocurrency, and blockchain technologies.
Evolution and Strategic Pivot to Web3
Since its transition to a private entity, Animoca Brands has solidified its position as a key investor in the Web3 space. The company’s extensive portfolio includes investments in prominent ventures such as Axie Infinity, Polygon, Kraken, and The Sandbox. This evolution represents a strategic shift from its origins as a mobile gaming developer.
Operating as a private company allowed Animoca Brands to maintain strong relationships with its existing shareholder base, comprising both retail and institutional investors from its time on the ASX.
“We always stated, from the moment we delisted, that our objective would be to relist the business when the timing felt right. This objective has re-emerged as a primary focus since the end of last year.”
Driving Factors for the U.S. IPO
Several factors are influencing Animoca Brands’ decision to pursue a U.S. IPO. A key driver is the evolving regulatory landscape in the United States, which is becoming more receptive to digital assets. The global influence of U.S. regulatory precedents means this shift has far-reaching implications.
Additionally, there’s a marked increase in interest from traditional financial markets in the digital asset sector. Robby Yung, CEO of Animoca Brands, views this growing acceptance as a prime opportunity for the company to reinforce its leadership in the altcoin sector.
Shifts in Investment Portfolio and Web3 Gaming
The year 2025 is seeing a growing digital asset market, bolstered by a more pro-crypto stance in the U.S., increased institutional adoption, and ongoing industry innovation. Despite the market’s rapid expansion and associated volatility, leading to significant investor losses, key sectors are showing resilience.
Web3 gaming, a sector historically central to Animoca Brands’ operations, has experienced a notable surge in popularity. Earlier in the year, David Ching of Animoca Brands emphasized Web3 gaming as a strategic fit for the company’s investment strategy. Yung elaborated on the sector’s current standing within the company.
“Web3 gaming remains close to our core at Animoca Brands, as it represents our roots. We were purely a gaming company before our discovery of blockchain technology,” Yung stated.
He further clarified the sector’s evolving significance: “It used to be our entire focus. Now, it constitutes perhaps 25% of our business.”
Challenges and Strategies in Web3 Gaming
Yung acknowledged that the Web3 gaming sector faced considerable headwinds following the hype cycle of 2021/2022, entering a protracted bear market. Following the downturn in 2022 after the FTX collapse, we undertook a period of rationalization, as any responsible organization would, to ensure we were managing our resources prudently and not overextending ourselves,” Yung explained.
This period presented challenges for many Web3 gaming studios, leading to a significant shakeout in the sector. Attracting players in a market crowded with millions of titles, where user attention is often divided among a few, remains a unique hurdle.
“So, to find great games in this marketplace, you need a sufficient number of developers trying innovative ideas, so to speak, until success is achieved, as that is fundamental to game development,” Yung added.
He drew a parallel to the film industry, where consistent success relies on established methods, humorously noting, “that’s why you’ve seen 78 Marvel films.”
Scalability and Investment Approach in Web3 Gaming
Successful Web3 games, like Axie Infinity, have demonstrated the ability to cultivate dedicated communities and continue developing their offerings, even after the market downturns of 2021/2022. Yung pointed to titles such as Pixels and Off the Grid as further examples of successful Web3 games currently in the market.
A key advantage for Web3 gaming is its relatively lower infrastructure costs. This allows for the development of games that cater to highly engaged, albeit smaller, player bases, often resulting in a higher average revenue per user (ARPU).
“There is no freemium model in this space. Every participant purchases assets to engage in the game, which inherently involves an entry cost,” the Animoca Brands CEO observed.
Yung explained that revenues from these asset sales support game operations and engagement for millions of players, unlike traditional games that often require hundreds of millions of players.
Consequently, Animoca Brands employs a more selective investment strategy, focusing on projects that exhibit strong potential for user engagement and community building. “We do not invest at just the business plan stage; we need to see evidence that they can connect with an audience and build a community.”
Yung emphasized a preference for games that have completed alpha testing and have already shown demonstrable traction and user engagement in the market.
Navigating Market Volatility and Risk Management
The gaming industry is inherently competitive, and while success often involves an element of creativity, it is ultimately measured by quantifiable outcomes. The traditional gaming sector frequently experiences studio closures and layoffs, adding pressure on Web3 gaming, which must also contend with the volatility of the cryptocurrency market.
⚡ The recent flash crash served as another stress test for the blockchain industry. However, Yung remarked that current market conditions exhibit significantly more resilience than past crises, primarily due to improved market structures.
💡 Unlike the cascading failures seen after the FTX crash, the market’s current structure incorporates very sophisticated risk management systems that insulate them from the types of events that occurred recently.”
Yung noted that investor greed and the involvement of amateur traders using highly leveraged positions were significant factors contributing to the most severe losses during the recent market downturn. He humorously recalled a fundamental piece of advice: “don’t use leverage.”
Additionally, a lack of discipline in taking profits at opportune moments can lead to emotional decision-making, transforming a strategic endeavor into mere speculation, Yung concluded.
Final Thoughts
Animoca Brands is strategically positioning itself for a U.S. IPO in 2025, aiming to capitalize on evolving regulatory frameworks and growing financial market interest in digital assets. While Web3 gaming remains a core component, its relative significance within the company’s diversified investment portfolio has adjusted, reflecting a broader strategic focus on various Web3 ventures.