Dialogue with Animoca Investment Director: Where is the next wave of NFT application scenarios?

On August 9th, at the time of the S2 registration interview for the All Things Creation Camp, dozens of founders of the All Things Island community had a conversation with Jenny, investment director of Animoca.

Everything Island: How to evaluate chain game projects? Including Timing, track, team

**Jenny: **The vision of Animoca is to attract tens of millions or even hundreds of millions of users with good content and IP, join Web3 and complete the popularization of digital property rights. Animoca Group started from traditional games and found that many small and medium game companies needed publishing support and were severely squeezed under the existing traditional framework, so in 2017 they began to focus on the chain game ecology. Our team now sees that the project is still very active, and we are a little more cautious in the bear market. It is difficult to predict the timing of the prosperity of the application layer. It will be affected by the capital bull-bull cycle, and more importantly, it will also be driven by explosive products.

We think that the core competitiveness of game applications lies in differentiated innovative products, and choosing the right track is also the most important thing, which determines whether the market is large enough. What behaviors or elements of the founder will give me special points? The most important thing is to pay attention to product details, it is best to have your own well-known works, and continuous entrepreneurs are the best. In addition, if the founding team has real money and silver shares, it will be a plus. Investors are very concerned about whether the founding team is fully committed to Allin.

The Island of Everything: What posture should we take to face the trough cycle?

Jenny: There has been a lot of talk about Web2.5/Gamefi recently. I think these two things do not conflict and can develop in parallel. The early seed user groups faced by the two types are very different.

Fully on chain game (FOCG) will be the core application scenario of ZK technology in the next cycle. The development cycle of FOCG is relatively short. Due to the limitation of the whole chain in terms of content richness and playability, it may not be able to compare with traditional games or GAMEFI. Early users will mainly be DefiOG and technical people who pursue the spirit of geeks. Through them Radiation to the external generalization population.

The target group of Gamefi is relatively wider. It attracts traditional game users with innovative gameplay and monetization models. This group of people is very large. It empowers game content through an open economic model, strengthens digital property rights, and can increase user stickiness . Of course, this premise must be that the game itself is fun, otherwise, no matter how good the token design is, there is no way to make a product that is not fun. In addition, Gamefi's open economic system can also attract native Web3 users, who are not necessarily game users themselves but can also participate in the form of speculation or gaming. This is not necessarily a bad thing, as more liquidity can be provided to game assets.

Wanwudao: Which chain game sub-categories are you more optimistic about?

Jenny: I am more optimistic about the SLG strategy category. Compared with other types of games, it usually has a longer life expectancy. It has its own economic system. The main fun is team battle simulation and transaction interaction. Tokenization even creates an open economy to allow in-game assets to circulate more efficiently. We are also deeply cultivating the innovative FPS+ online game gameplay. FPS is the world's largest game category, with a large number of players and a good user base. In addition, we are also very interested in the cultivation of transactions.

Wanwudao: The development cost of the game is relatively high and the cycle is long. Does the NFT-first model still work?

Jenny: Now the NFT market is very cold. It is not feasible to sell NFT for financing and then develop games. It cannot raise enough money. Creator needs to do Alpha or Beta first, keep improving the details, and then rely on innovation to attract users to the community, and then launch NFT sales after having a certain foundation. The early development funds mainly come from VC financing, and NFT will become a long-term consumer product. At present, we are more cautious about super large-scale 3A games. There is no need for Web3 to compete with traditional big manufacturers in large-scale production. It is advisable to focus on the innovation of gameplay while paying attention to execution and delivery capabilities. Asian entrepreneurial teams have advantages in terms of production and research cost control and execution efficiency.

Wanwudao: In which scenarios will NFT be applied in the next wave?

Jenny: Depends on its functionality. Combined with rights and interests, the main scenarios are in the fields of games, social networking, and live broadcasting.

The Island of Everything: How do content creators pitch investors like Animoca?

Jenny: As the capital side, first of all, it depends on what problem the product itself solves; then whether it is innovative; and its users, where is their willingness to pay; finally, it must be based on the team experience and their vision Matching degree and the founding team's understanding of the entire ecology.

The Island of Everything: Suggestions for chain game entrepreneurs?

Jenny: "Product is king", the game must first be playable. Category selection is also very important. Take traditional casual games as a negative example. It can indeed achieve high daily activity quickly, but if its monetization model still relies on advertisers, it is more suitable to stay on the traditional game track. Web3 games also need to ensure that the cycle of their open economy is sustainable, and the design of tokens must be very closely integrated with gameplay and values. This will be directly related to the success or failure of the game, so it is best not to outsource. The last point is to control the pace of financing, the valuation must match the stage of the product, and make a long-term plan for cash flow.