Mechanism Capital is ready to take on 2022 with the launch of its brand new $100 million fund for Play-to-Earn gaming titles. This move is a natural progression because the crypto investment company started expanding its portfolio last year. It invested in projects like Star Atlas, Ember Sword, Yield Guild Games and more.
Founded in 2020, Mechanism Capital is a venture capital investment firm based in the United States. Initially, the firm focused on crypto ecosystems and Decentralized Finance sectors. The firm is acting on the P2E gaming model’s growing popularity, taking the gaming scene by storm.
About Mechanism Capital’s P2E Investment Fund
Steve Cho, the former Apple App Store games business manager, also partnered with the firm in order to lead the fund. Commenting on the move, he said, “NFTs and new gaming paradigms like play-to-earn are exciting new ways to approach how we make games. For the first time, players can actually own parts of the experience, invest not just time, but make money.”
On its website, Mechanism Capital described NFTs and Play-to-earn as the “Financialization of Fun.” As such, more gaming studios are exploring opportunities in blockchain and “Play to Earn (P2E)” is on every VC’s lips.” The gaming skins market alone is currently estimated at $40 billion per year.
The firm’s move to double down on P2E games is very timely because early adopters are already reaping the rewards. For example, Animoca Brands completed a capital raise of $358,888,888 at a pre-money valuation of US$5 billion to grow the open Metaverse. Over the course of 2021, the Hong Kong unicorn raised $216.28 Million to bring its vision to life.
The Allure of P2E Games
The current leading game, Axie Infinity, achieved a $35B valuations ($AXS) last year thanks to the P2E gaming model. Players received rewards for their in-game play with assets that they could sell for real-world value. Aside from ownership, the tokens offer governance of the games. Needless to say, it was different from existing gaming models but in a good way. Illuvium, another game that won’t be launching for another two years, has found itself with an $11B valuation ($ILV).
However, the real allure of play-to-earn gaming is its capacity to change lives. In the Philippines, which houses 40% of the players, earnings from that game exceed the minimum wage. It sounds like a fairytale but individuals from all walks of life are able to earn a living by simply having fun playing video games.
So, all things considered, Mechanism Capital’s move to not sleep on Play-to-earn checks all the boxes!