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Fenix Games has raised $150 million to create a new type of publisher for blockchain games.
The idea is to create a publishing company and platform that will play a key role in bringing blockchain games to market. Fenix Games plans to acquire, invest and publish both existing games and future blockchain games.
Investors include Phoenix Group and Cypher Capital. The new company suggests that blockchain games, which have had a kind of Cambrian explosion over the past couple of years, are moving towards a consolidation where big companies will emerge, acquiring or funding all the strong start-ups. In other words, Fenix Games hopes to be able to combine many companies into one strong company with a large portfolio that can weather the current downturn in blockchain gaming.
“You can think of us as a venture capital fund,” Chris Ko, CEO and co-founder of Fenix Games, said in an interview with GamesBeat. “The market is similar to the previous one [mobile gaming at the rise of free-to-play games] but he has not yet found his Clash of Clans for blockchain games. We use venture capital to fund the next generation of games. In fact we are going to start with a huge capital base to invest in these studios. We are also going to use our balance sheet to acquire several existing games in the Web2 space to build a portfolio. And that will be the right foundation for our portfolio.”
Historically, there have been players in the gaming sector that have provided a market or platform for both
gamers and game developers. The console platforms included Sony, Microsoft, and Nintendo. And in the mobile platforms of Apple and Google.
In both cases, a whole marketplace was created, which led to an ecosystem that allows content to be consumed. However, for blockchain games, that market does not currently exist, Ko said. The company was founded by a group of veterans of the gaming industry, blockchain and financial markets.
“We plan to acquire, invest, publish, and operate games and studios on a case-by-case basis,” Koh said. “We will have several hundred million to implement our strategy.”
The networks represent a potential platform similar to previous gaming cycles, Ko said, but at this stage they don’t seem to be geared towards creating a market for gamers.
“We think this is temporary as the main applications on the networks will be games,” Ko said. “The infrastructure, tools and support just don’t exist. We believe there is an opportunity for the publisher to increase its role in the gaming ecosystem.”
More experienced game developers are moving to blockchain games, especially after Apple pushes for privacy in mobile games. But Fenix Games believes that there is a very narrow set of games in development for blockchain platforms so far.
“We believe there is a structural gap. We aim to fill this gap with a redefined publishing group that uses some of the traditional publishing features but with a new feature,” said Ko. “Just as mobile free games combined analytics and product management functionality to launch, scale and operate online services, we believe there will be a similar blending of features in blockchain games.”
Fenix games wants to combine the skills of its staff in game publishing and product management and product management functions, but is taking disciplines and capabilities from financial services, mainly asset management.
The combination of these disciplines the company calls the market economy. Simply put, this will create a market for the game or games in order to maximize the number of potential players for the game. A key feature of the game’s market economy will be community scaling before the game launches.
Similar to the live operations feature that was created to support the game after launch for many years, Fenix Games believes that the economics of the gaming market will play a vital role in the months and even years leading up to the game’s launch. This activity is needed to fill a gap in what the platform owners used to fill.
“It’s a bit of a roll up, but it’s also an investment,” Ko said.
Fenix Games will focus on combining the economics of the gaming market and real operations to provide publishing services for all gaming models – premium, free and blockchain games across all platforms.
“Now I see a huge gap with various developers experimenting with game framework, middleware and more. No one is really playing the role of a publisher and trying to figure out how you successfully go to market,” said Ko. “Using a publishing approach, we abstract from technology. We play with Switzerland when it comes to technology and we reduce risks.”
In addition to raising its own funds, Fenix Games will also have access to allies among investors with much more capital – in the hundreds of millions of dollars.
Ko said that Fenix Games is a next-generation game publisher that is facilitating the transition of the next billion players into a blockchain-integrated future. While traditional Web2 games have mature distribution platforms and markets that bring together billions of players and developers, Web3 lacks the infrastructure, tools, and support to facilitate mass adoption.
As more and more quality developers embrace blockchain technology and design principles, Ko said, the company sees an opportunity to increase the publisher’s role in game design, go-to-market and operation.
“And that means we are not tied to any one technology, any one ecosystem,” Koh said.
Previously, Ko was Senior Vice President of Corporate Development at Mythical Games. He has almost 20 years of gaming experience and has held CEO positions at Electronic Arts and Kabam. Prior to that, he was a portfolio manager at Blackrock and a stock market analyst at JPMorgan.
Other co-founders of Fenix Games include Rudy Koch, chief commercial officer and co-founder of Mythical Games. Koch has 15 years of experience developing games for the industry’s biggest players: Club Penguin, Call of Duty, Skylanders and World of Warcraft.
Antonio Hallak is CIO/CTO and co-founder. Hallak previously worked as Head of E-Commerce at Credit Suisse; head of prop trading, market making, technical director and other senior positions at IB (Citi, Merrill, Goldman, Salomon Smith Barney, Bridgewater, etc.). He has been prop trading, market maker and asset management in the cryptocurrency markets since 2017.
Matt Nutt is the COO and co-founder of Fenix Games. Previously, he was COO and Head of Games at Mythical Games. Prior to joining Mythical, he was Group Vice President and General Manager of EA Mobile. He previously ran studios at Glu Mobile, ran independent studio Cie Games (and was sold to Glu for $100 million in 2014), and held senior positions at Blizzard Entertainment and Square Enix, focusing on business development.
“The four of us are joining the company to expand what we did from our past lives into the ‘blockchain game markets’,” Koh said.
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