All eyes on the mass appeal of Web3 casual gaming: why we invested in Eyeball Games
By Eddie Lee, General Partner and Alex Thabet, Venture Partner
We’re thrilled to be investing in the future of mobile gaming, leading Eyeball Game’s oversubscribed $1.5m pre-Seed equity round that included participation and grants from Web3 firms Polygon Ventures and Immutable, venture capital funds Ocular and Great South Gate Ventures and prominent angel investors. Here’s why we invested.
The gaming industry is huge, and growing
The gaming industry has evolved at a near-continuous rate since the 1970s. Commercial and tech innovations have increased the number of worldwide gamers to nearly 3b, and annual industry revenue to $385b.
Game studios have repeatedly innovated on ways to retain and monetise gamers. From buying hard disc games like Super Mario Kart in the 1990s, to gaming-as-a-service subscriptions like World of Warcraft in the early 2000s, to free-to-play apps with in-app purchases like Candy Crush, gameplay has continuously evolved and with it, user spend.
A significant driver of recent growth has come from the rise of mobile gaming, which now makes up over 60% of the market. Since the launch of the iPhone in 2007 and the App Store in 2008, developers have a new, low-cost way to acquire users and sell either games or in-app purchases.
At White Star Capital, we look to web3 as the next paradigm shift for gaming.
Blockchain is the next paradigm
We see three key pain points as drivers of innovation within gaming. For gamers:
1. In-game assets are not interoperable: gamers spend $1.6b per week on mobile gaming alone, on anything from skins to swords, and yet these assets are not transferable. Users can spend money to buy in-game assets, but gameplay is then limited as they cannot own, trade, or use these assets in different contexts not determined by the developer.
2. Users cannot own their progress despite putting effort into a game, with gamers averaging 7.6 hours per week. There is an estimated $11.5b gaming grey market, where users trade games, accounts and virtual items through unofficial channels because the game publishers do not allow for this.
And for developers:
3. Customer acquisition costs are rising as social media platforms become increasingly crowded and data regulation becomes increasingly restrictive, reducing conversion and retention rates.
Blockchain technologies can solve all three of these pain points. They enable assets, avatars and accounts to be ownable, interoperable, and tradeable. Especially in the case of hyper-casual and casual games, interoperable user-owned assets pose significant opportunities to deepen the emotional engagement between gamers and their player experience. For developers, we believe token-based economies and NFTs as in-game purchases extend the user acquisition funnel at the acquisition, retention, engagement and monetisation levels.
But so far, despite all this promise, and despite seeing hundreds of promising startups in the space, blockchain gaming hasn’t really taken off. Why? Because financialisation through crypto has come at the expense of gameplay. We wanted to invest in a proven gameplay model where blockchain could improve on all of the above.
Enter, Eyeball.
8 Ball Pool, owned by Miniclip, is a record-breaking pool game which has over 1b downloads, 10m DAUs and $100m in ARR. By every measure, it is incredibly successful among gamers everywhere. And yet the pain points identified above are clearly present.
Eyeball Games was founded by Jonathan Ivarsson and managed together with Karsten and Thomas, the original creators of 8 Ball Pool. It’s a Singapore-based game studio whose first title, Eyeball Pool is a high-quality and fun pool game built on Unity.
In Eyeball Pool, players can play against each-other 1v1, compete in tournaments, or in other mini-game action. Users can now genuinely own their progress, with NFT cues that can be earned from playing, trading, and tournament winnings and trophies. Cues can be customisable or limited edition if released with partner brands and will come with improved gameplay.
The game will launch on the Polygon x Immutable zkEVM chain, an industry-first platform that enables developers to build a faster experience for gamers with lower gas fees. Eyeball Pool will be one of the first featured projects on the new collaboration between the industry leaders and also backed by their investment support.
Its first mint of 4,001 genesis NFTs (Ballroids) sold out in 30 minutes, but those who missed out will have another shot. Visit Eyeball.games for the whitelist for the Eyeball Pool expanded NFT series.
We’re excited to see where the team takes this new shift in gaming.
