Dialogue with Animoca's Investment Director Jenny: Product is king, and gameplay is the top priority

Author: Wanwu Island

Dozens of founders from the Wanwu Island community had a dialogue with Animoca's investment director Jenny, delving into entrepreneurial and investment thoughts in the blockchain gaming space. Below are some selected excerpts:

Wanwu Island: How do you evaluate blockchain game projects? Including Timing, Track, Team

Jenny: Animoca's vision is to attract tens of millions or even billions of users to Web3 through good content and IP, completing the popularization of digital property rights. The Animoca Group started from traditional gaming and discovered that many small to medium-sized game companies needed publishing support and were severely squeezed within the existing traditional framework. Therefore, in 2017, we began to focus on the blockchain gaming ecosystem. Our team is still very active in looking at projects, though we are a bit more cautious during bear markets. It's difficult to predict the timing of application layer prosperity; it is influenced by capital bull and bear cycles, but more importantly, it depends on the emergence of hit products. Ultimately, we need products that have real application value, rather than purely speculative ones.

We believe the core competitiveness of game applications lies in differentiated innovative products, and choosing the right track is also of utmost importance, as it determines whether the market is large enough. What behaviors or factors from founders would particularly impress me? The most important is to pay attention to product details, ideally having their own well-known works, and being a continuous entrepreneur. Additionally, if the founding team has real financial stakes, it would be a significant plus; investors pay close attention to whether the founding team is fully All-in.

Wanwu Island: How to face the trough cycle?

Jenny: Recently, there has been a lot of discussion about Web2.5/Gamefi. I believe these two concepts are not in conflict and can develop in parallel. The early seed user groups for the two types are very different.

Fully on-chain games (FOCG) will be the core application scenario for ZK technology in the next cycle. FOCG has a relatively short development cycle, and due to full-chain restrictions, it may not yet match traditional games or GAMEFI in terms of content richness and playability. Early users will primarily consist of DefiOG and tech-savvy individuals who adhere to a geek spirit, and they will radiate to a broader audience.

Gamefi targets a relatively wider audience, attracting traditional game users with innovative gameplay and monetization models. This group is quite large, and it empowers game content through an open economic model, enhancing digital property rights and increasing user stickiness. Of course, this premise must be that the game itself is fun; otherwise, no matter how well the token is designed, it won't be able to make a poor game good. Additionally, Gamefi's open economic system can attract native Web3 users, who may not necessarily be gamers but can participate in speculation or gaming forms. This is not necessarily a bad thing, as it can provide more liquidity for game assets.

Wanwu Island: Which subcategories of blockchain games do you have high hopes for?

Jenny: I am particularly optimistic about SLG strategy games. Compared to other game categories, they usually have a longer lifespan, possess their own economic systems, and focus on team battle simulations and trading interactions as their main enjoyment, with strong monetization attributes. They are suitable for tokenization or even creating an open economy to allow game assets to circulate more effectively. We are also deeply exploring innovative FPS combined with gambling gameplay; FPS is the largest game category globally, with a large player base. Additionally, we are quite interested in transaction-heavy nurturing games.

Wanwu Island: Is the NFT-first model still working given the high development costs and long cycles of games?

Jenny: The NFT market is currently very cold, and relying on selling NFTs to finance game development is no longer a viable path, as it cannot raise enough money. Creators need to first develop the Alpha or Beta versions, continuously refine the details, and then attract users to the community through innovation, before proceeding with NFT sales once they have a certain foundation. Initial development funding mainly comes from VC financing; NFTs will become a long-term consumer product. Currently, we are quite cautious about super large AAA games. Web3 does not need to compete with traditional large companies for big productions; it might be better to focus on gameplay innovation while emphasizing execution and delivery capabilities. Asian entrepreneurial teams have advantages in cost control and execution efficiency in production and research.

Wanwu Island: In what scenarios will the next wave of NFTs be applied?

Jenny: It depends on its functionality. Combining rights, the main scenarios are in gaming, social, and live streaming fields.

Wanwu Island: How should content creators pitch to investors like Animoca?

Jenny: As a capital provider, the first thing to look at is what problem the product itself solves; then whether it has innovation; also, its users and their willingness to pay; finally, it is essential to assess the team's experience and the alignment of their vision with the understanding of the entire ecosystem by the founding team.

Wanwu Island: Any advice for blockchain game entrepreneurs?

Jenny: "Product is king"; the game must first be playable. The choice of category is also very important. For example, traditional casual games can quickly achieve high daily active users, but if their monetization model relies on advertisers, they are better suited to stay within the traditional gaming track. Web3 games also need to ensure that the circulation of their open economic system is sustainable, and the design of tokens must be closely integrated with gameplay and values. This will directly relate to the success or failure of the game, so it is best not to outsource. Lastly, it is crucial to control the rhythm of financing, ensuring that the valuation matches the stage of the product and planning for long-term cash flow.