Fabric Ventures
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Fabric Ventures

Magicave: The Next Generation of Digital Toys

Why we invested in Magicave

In 1974, a small boxset of three booklets was published. With a very limited production budget of only $2000, Dungeons & Dragons (D&D) would go on to become the world’s biggest role-playing game (RPG), with over 50 million people having played it, and continues to grow even as it approaches 50 years since it was created in 1974. From humble beginnings to pop culture references like Stranger Things, E.T., and The Simpsons to name a few, D&D inspired a legion of passionate hobbyists who took the rules they were given and collectively spawned a cornucopia of creative endeavour, from campaigns (some running continually since 1982), to characters, landscapes (which often occupy entire rooms or more), and of course sets of dice!

An example of the complexity of some D&D games

Fast forward to 2021 and Loot completely flipped our preconceived notions about game development. Rather than a centralised game studio spending years developing and then marketing a game hoping for a successful launch within their walled garden, (notably with limited input from their players who will ultimately buy the physical or digital assets required to play or create satisfaction from the game experience), now instead the assets were being created first, a blank canvas from which experiences could be created, driven entirely by the community — hobbyists for whom these lists of white text items on a black background piqued their interest. Witnessing the level of organic activity that spontaneously emerged was truly a unique experience: In the next five days, Loot bags were resold for $46 million, and had a market cap of $180 million.

The original Loot announcement tweet, from its creator dom

However with such an experiment, there are inevitably some pitfalls. Because the assets were so simple, and the development grassroots without tooling or much coordination, the first thing to happen was many utility-less derivative collections were created that one could mint by holding a Loot bag. Not the most compelling experience from a “fun” perspective, as opposed to a financial game of whack-a-mole as the opportunities to speculate and flip new assets came and went.

Almost a year later, now that the dust has settled and some genuine projects have emerged, such as TheCrypt, Realms, we can examine what the longer lasting impact of Loot has been. Loot represents a community of holders of approximately a certain demographic (cryptonative <> RPG enthusiast <> NFT collector/speculator). As a 3rd party developer, one can attract these holders to your own 1st party content by giving them your assets or access to mint your assets, however:

  • There is no incentive to drive value from your experiences to the original Loot bags
  • Further there is no assistance to do so
  • Finally there has been nothing to do as a Loot holder for the first 6+ months of its existence, other than to try and follow the progress of projects (often in stealth)

These are all learnings that the Magicave team have taken on, combining that with their experience from traditional game development (Stardew Valley mobile, Sony PlayStation, Yakuto (acq. by Tencent), The Secret Police) and community building within web3 (400k+ member Discord), they are crafting digital hobbies around beautiful, playful, and importantly, tactile virtual items. These assets are at the heart of an ecosystem of games, applications, players, and creators.

So naturally Magicave’s first project dNo (short for ‘d-Number’) will be the D&D of web3. It marries collectible virtual dice with figures, tiles, stories, and worlds. Unlike Loot, by having a team behind the project committed to drive value they can:

  • Create incentive mechanisms for the community to build experiences on top of these assets and receive upside for their efforts
  • Provide tools that assist developers in integrating these interoperable assets into their experiences
  • Build experiences that are ready from launch so that owners can feel their assets, play games with them, and not just twiddle their thumbs in Discord waiting for something to happen

Fabric is thrilled to co-lead a $5.7m round in Magicave, alongside BITKRAFT, and with participation from Sfermion and Geometry. We are extremely excited to be supporting Harry, Ste, Ed, and their team in bringing to life our shared dream of interoperable game assets.

We back the boldest technologists & communities at the earliest stages, supporting them throughout their journey and becoming active participants within the networks they are building.

To learn more about Fabric Ventures, you can visit our website, follow us on Twitter and read our investment thesis.



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