We are incredibly excited that Mythical has completed its Series C, led by a16z, raising $150 million at a $1.25 billion valuation. Back in January 2019, when we met CEO John Linden at a fintech demo day in Los Angeles, we were already about six months into our search for a gaming company who would unlock the potential of Non-Fungible Tokens (NFTs). In mid-2018, we heard William Entriken, then lead author of the ERC-721 standard, remark on his surprise that AAA game studios were the slowest adopters of blockchain. He called it an obvious use case, especially as games were becoming free-to-play. From our conversations with big incumbent gaming studios at the time, it became increasingly clear that it simply was not in their best interest to disrupt the high margin IP businesses that they had built. It was reminiscent of the high conviction dismissals of Netflix from big media companies when the disruptive media company’s streaming service launched in 2010. If only they knew that Netflix would overtake all of them to become the largest entertainment company by market cap in the United States only 10 years later. It was almost as if we could hear American novelist Upton Sinclair saying,
“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”
From that time, we were truly passionate about finding that forward thinking pioneer who was ready to disrupt and who had experience in building and shipping fun games. As analysts at Signum Growth Capital, our idea of fun is meeting with entrepreneurs to brainstorm cool use cases in gaming that might spring out of blockchain technology. Cryptographers have made such incredible strides as innovators and experimenters. Still, having the experience and battle testing (no pun intended) of making fun and profitable games is more analogous to making zeitgeist catching movies than it is to coding breakthrough applications.
The Dream Team
Meeting CEO John Linden was a “know it when you see it” moment. He ran a Call of Duty studio at Activision and had recently sold his gaming company, Seismic Games, to Niantic. His Co-Founders were Jamie Jackson, Chief Creative Officer, and Rudy Koch, Head of Blockchain who joined with experience at World of Warcraft and Club Penguin.
Jamie Jackson joined Activision as the youngest studio head of his time after his company FreeStyleGames was bought by Activision to develop the music video game, DJ Hero (a spin-off of my all time favorite franchise Guitar Hero!) After meeting Jamie and Rudy, it just kept getting better with introductions to Head of Business Development Andre Johnson, Chief Product Officer Pete Hawley, COO Jeff Poffenbarger, and General Counsel Greg Deutsch, all industry veterans. We have also had the honor of spotlighting two incredible Mythical women execs on WIGZ on WEDZ (Women in Gaming Zoom on Wednesdays) - Cristina Lee, VP of Finance, who came with 15 years of experience in senior finance roles at Warner Bros and Fox Film Entertainment, and Nicole Yang, VP of Marketing, who joined with experience at Zynga and Telltale Games, where she worked with then CEO Pete Hawley. We honor the company for promoting diversity at the senior executive level, and we look forward to spotlighting the latest exciting addition - Cassandra Kaiser, the SVP of People, who is a very highly sought after person herself. Cassandra’s superpower is described as learning how a business runs inside and out and building trusted relationships and partnerships in order to create strategies to solve complex business challenges - AWESOME!
The press coverage of Mythical has also been incredibly exciting, from great journalists like Dean Takahashi of Gamesbeat who have been following and covering Mythical for the last few years. This interview on Cheddar with CEO John Linden hints at where the company is heading -
Mythical’s mission is to create a new generation of gaming which allows players, artists, brands and game developers to create characters they can truly own as stakeholders in their game ecosystems. John explains the shifts we have seen in gaming from the democratization of game access (free to play) leading to 3-4 billion gamers around the world, to the democratization of game content (e.g. Roblox and Minecraft) allowing players to create an explosion of in-game content. We are now embarking on the democratization of game economies, in which players will be able to participate in buying, upgrading and evolving their own items in the game. Then, since they own the items, they can sell them to other players in the game. NFTs simply provide a tool for verifiable ownership in game ecosystems. John pointed out something that has always excited us about this tech - this behavior of buying, selling and trading assets among gamers has been happening for decades. Something that we love to say is that we are simply merging onto the highway of behavior that is already happening!
We talk a lot about Epic Games and Tim Sweeney as our North stars on industry leadership and business model. The game Fortnite has been a success with over 350 million accounts, but it is simply a demo of the company’s killer technology - Unreal Engine - and its unique flywheel business model, including game distribution through the Epic Store. Similarly, Mythical has created the game Blankos as a demo of what is possible for other game developers who want to merge onto the highway of Mythical’s vision and adopt it as their own.
The Mythical Marketplace officially entered Beta on September 30th, 2021
After announcing three studios this week (Abstraction Games, Creative Mobile, and CCG Lab’s trading card game based on a franchise from Cryptozoic Entertainment) John Linden explained that Mythical is working with dozens of studios to bring this new economic design into their own video games.
When he was asked in the interview what this new design that you are working with studios on will look and feel like, John's answer was -
That's hopefully the key! It won't look any different than a normal video game. That’s one of our goals - to bring this tech into the mainstream gaming world so that it looks very natural. You don’t need to understand cryptocurrencies. You don't need to go buy an Ethereum token or something like that. You can just come into the games and play the games. The items you own - you can then trade or sell. We are trying to make it as natural as possible; not some new system you need to learn. The game industry is approaching $200 billion a year in primary sales of assets. Now there is a secondary economy, which could surpass the primary economy. So we are talking about hundreds of billions of dollars of transaction volume that will be generated by secondary markets of gamers.
And when asked how cryptocurrency plays into this and whether or not gaming is a gateway for more crypto adoption, John said -
A lot of the concepts of gaming have been very similar to crypto, such as virtual items and digital ownership. The onramp is educating gamers, making it feel natural and onboarding them, while making sure they understand. Our goal is to protect gamers at all costs. So things like private keys and all of these concepts around blockchain - we are going to take care of that for gamers until they are ready. But once they are ready, they will be able to take over their own private keys and then they can move those assets wherever they want. We want to do this very carefully and very conservatively to bring this world of 4 billion gamers with us.
Signum Growth Capital THEME: Creators to the Front of the Line
Blankos the game fits right in - check out the trailer here . Blankos Block Party is a vibrant open-world multiplayer game styled like a giant block party, with a focus on custom art and design, building and exploration, and curating your collection of unique and rare Blankos, which are mischievous digital vinyl toys brought to life. Players can design and build games, create their own rules and then invite their friends to play. This requires creativity, not coding skills. Each Blanko digital asset is an NFT.
The Marketplace offers the Uphold wallet integration, which allows players of Blankos Block Party to use supported cryptocurrencies in their Uphold wallet. Here is where I show off my Billy Bones Golds, purchased as 2022 Christmas gifts - shhhh!
Even though the journey is just getting started, we are incredibly excited about the future of Mythical. We also have already learned so much from working with early investors like Sam Englebardt at Galaxy, Alex Gurevich from Javelin, Adam Struck from Struck Capital, and Baek Kim of Hashed Capital, who have all worked collaboratively with the company and with us at Signum. Welcome Arianna Simpson and the team at a16z and congratulations to the entire Mythical team on a successful Series C. Here's to a colorful future of Polly Wanna Rainbow Wings and Bite Me Billy Horns!