Play-to-earn video games monetize fun

The Future. A new trend of play-to-earn video games is bringing a real money-making marketplace to online games… and they are already allowing some players to earn a living. Brands may quickly turn to them as a new way to create interactive experiences that experiment with alternative advertising.

Cash quest
Yeah, playing video games is fun… but what if it was also how you paid the rent? That’s the premise behind a new wave of play-to-earn games.

• Axie Infinity, which has about 350K daily users, is a “Pokémon-style game” where users breed and train creatures called Axies, which allow for the users to compete for small love potions (SLPs).
• SLPs are also an in-game cryptocurrency, while Axies and a variety of other objects in the game can be traded on the Axie Marketplace as NFTs.
• The game also has another crypto called Axie Infinity shard (AXS), which gives holders a vote “in the governance of the game’s ecosystem.” It’s the largest gaming crypto on the market.

Another game, The Sandbox, is more Minecraft-style, and it allows players to build things and trade them as NFTs. That game uses a crypto called SAND that can be earned by selling digital real estate called LAND.

Multiplayer marketplace
So, is anyone actually making money on these platforms?

• The top Axie Infinity players are making an average of $435/day.
• Monthly trading volume for Axie Infinity NFTs is roughly $170 million.
• In The Sandbox, 2,352 plots of LAND sold for a combined $2.8 million this past February alone.

And brands are already taking notice. The producers behind The Walking Dead are creating a zombie world within The Sandbox, which the company called the first iteration of a “virtual attraction park.”

Publishers take a plunge into streaming

The Future. Digital publishers are creating content for the streaming content boom in order to create new revenue streams as advertising opportunities dry up. If they start to find consistent success by mining their own IP, the next wave of entertainment M&As may be partnerships between Hollywood studios and digital publishers.

Feed the beasts
Are digital publishers ditching words for images?

• Vox Media has sold 50 projects to streamers such as Netflix and Amazon and networks like HBO and CNN in the past 15 months.
• Vox’s studio division is expected to account for a third of the company’s revenue this year — about $300 million.
• Vice, which has shows on ESPN and Netflix, expects its studio division to bring in about $750 million in revenue in 2022.
• Vice is trying to use this new revenue stream to boost its valuation before a planned IPO… which has run into some issues.
• BuzzFeed, which has a film deal with Lionsgate and a TV deal with Universal, is ramping up its content output after a few years of false starts.
• BuzzFeed plans on releasing six films over the next year, including 1UP starring Ruby Rose. It also has 15 projects in production, and 50 in development.

Hard money
Money may be pouring into streaming, but that doesn’t mean it’ll be easier to make money.

• Making high quality films and shows takes much longer and requires far more investment than what publishers are used to creating.
• It also comes with a lower profit margin. While a digital ad can bring 75% profit on investment, projects for streaming services bring in around 10-20% because streamers pay larger upfront fees to buy up profit participation from producers.

Some publishers like Group Nine Media (holding company of brands like The Dodo and Thrillist) maintain ownership as long as possible by making projects themselves in order to enjoy a higher upside — as with its Oscar-winning short film, Two Distant Strangers. It eventually sold that film to Netflix in a bidding war.

Group Nine Studios president Mickey Meyer said, “the ambition has never been just grabbing executive producer credit and walking away,” Meyer said. “We want to be globally renowned for our IP; we’re still in the early stages.”

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Landis opens the gate to home ownership

The Future. Startup Landis just raised $165 million to increase access for renters to become homeowners and, in turn, save money on the same properties that they were renting. With so many Millennials wanting to own homes but unable to afford down payments, Landis may be a great bridge to transitioning to ownership.

Clear the weeds
A startup called Landis wants to turn home renters into owners.

• Landis, which underwrites loans for prospective homeowners and provides tools for financial literacy, raised a $165 million Series A led by Sequoia Capital.
• Additional investors include Jay-Z’s Roc Nation, Will Smith’s Dreamers VC, Signia Venture Partners, and founders from major companies like Plaid and Instacart.
• The company typically works with renters who can’t qualify for mortgages because of either poor credit, lack of savings for a down payment or debt.

Landis uses a proprietary underwriting tech to determine whether clients can afford mortgages in the next year or two. Once approved, the company purchases the home and rents it out to the client, while also giving them a step-by-step playbook on how to save and and take over the mortgage.

You get a home, you get a home, you get a home
Landis plans on using the new round of funding to expand its footprint (currently 29 cities in 11 states), hire more employees, and improve its UI. To that last point, Landis also has an iOS app called Homeownership Coach, which works as a dashboard for money management. It’s now free for everyone to download.

Founders Cyril Berdgo and Tom Petis were inspired to create Landis after realizing that renters were flushing their money down the toilet — like paying $1,700 for rent, when the same place would have a mortgage of $1,000.

Berdugo said “people with low-to-moderate income don’t have access to services that wealthier people have, and we are trying to bridge that gap by providing financial literacy and services to get them mortgage ready.”