Despite the drop in funding, the co-founder of Web3 game The Sandbox is still optimistic about the Metaverse - thanks in part to AI

The metaverse has lost its magic for investors as artificial intelligence replaces it as the hottest investment trend. But Sebastien Borget is undeterred. The Hong Kong-based co-founder and COO of The Sandbox sets out to show that the metaverse isn’t just hype, it’s the future.

EEven at the height of the Metaverse mania a year and a half ago, raising capital wasn’t easy for the Web3 gaming company The sandbox, says co-founder and COO Sebastien Borget. It typically took Borget and its co-founder Arthur Madrid nearly a year to close a round of funding. The most time-consuming part was convincing investors that the five-year-old company is a subsidiary of Asia’s largest blockchain investor Animoca Brands, could one day build a decentralized metaverse. “Running the sandbox is like running a long marathon with lots of sprints,” Borget says in a video interview.

Now, raising capital is even harder as higher interest rates reduce investors’ appetite for riskier bets — such as the sandbox’s attempt to build a three-dimensional virtual world where entertainment, social interaction, and digital property coexist. The metaverse is no longer a buzzword for investors as the futuristic yet fuzzy concept has proven time-consuming and expensive to implement. Instead, many investors have switched to AI, spurred on by OpenAI’s viral chatbot ChatGPT.

Despite the lack of investor interest, Borget believes the metaverse will still grow into a multi-billion dollar business as industries from retail to education are still in their infancy. Even if the number of players in the sandbox is only a fraction of the established games Fourteen daysthat includes some metaverse features, Borget expects double-digit growth, fueled in part by the AI ​​boom.

“It was very important to us to show concretely what is possible in the metaverse as early as possible,” says Borget. “We have shown that it is not only about gaming, but about a new entertainment format that lies between social interaction and gamification.”

“And we will show that the sandbox is resilient and not dependent on the technology or crypto market crash,” adds the 38-year-old Frenchman.

Borget believes ChatGPT and other generative AI tools will help populate the metaverse much faster by making virtual worlds and avatars easier to design. Leading game publisher Activision Blizzard, for example, is already using generative AI to speed up the game design and development process. reported The New York Times. “We’re facing a major evolution in the way we create and manage our games,” Blizzard chief design officer Allen Adham told the staff Just Report.

Borget adds that AI can also help make the metaverse safer by using its technology to filter offensive language from in-game conversations.

Do you know a company that is on the rise? NOMINATE NOW:

MORE FROM FORBESForbes Asia 100 To Watch 2023: Nominations are open

The sandbox is already experimenting with AI, including working with companies that design avatars using text prompts and create avatar actions from videos of human movements. According to Borget, the company is looking to partner, invest, and potentially acquire AI companies that can help improve its Metaverse game, such as the software that allows players to create gameplays and other experiences on their virtual lots.

Unlike the billionaire Mark Zuckerberg’s Meta, the sandbox metaverse, is based on the blockchain, requires no virtual reality headsets and is accessible via web browsers. The Sandbox claims to operate one of the largest decentralized Metaverse platforms by number of landowners. Since its launch in 2018, the sandbox has amassed approximately 23,500 virtual landowners and more than 400 brand partnerships in the first quarter. (Disclosure: forbes is one of the virtual landowners of the sandbox. Companies that have recently partnered with the sandbox include Korean billionaires Bang Jun-hyuks Game developer Netmarble and Singaporean billionaire Wong brothers Fashion house Charles & Keith.

“Rather than being a spectator and merely looking at a brand’s assets on social media, Charles & Keith’s virtual land encourages interaction where users can play and earn NFTs,” said Keith Wong, co-founder and COO of Charles & Keith, in a written reply. “Also, we are able to express our campaign concepts with the integrated space, thus increasing brand awareness by reaching a wider audience through the blending of fashion and technology.”

However, investors didn’t share the same enthusiasm. According to funding data provider Crunchbase, capital invested in Web3 startups fell to $2 billion in the first quarter, the lowest since 2020. That’s down from $10.8 billion in the first quarter of last year. Meanwhile, funds raised by generative AI startups in the first three months of this year more than doubled from the same period in 2022, reaching a total of $1.7 billion, according to PitchBook data.

For the Sandbox, it’s been a year and a half since the company closed its last round of funding. In November 2021, during the funding bubble, the company raised $93 million at an undisclosed value from investors including SoftBank’s Vision Fund 2. Borget says he is confident of raising more capital but expects it to take longer in current market conditions.

The sandbox also needs to attract more users to its Metaverse platform. The game, which is currently in beta mode, had more than 100,000 players in the first quarter. That’s down 72% from the 10-week period ended November, the company’s most recent comparables. According to data providers CoinGecko and DappRadar, both sandbox game tokens and daily unique active wallet addresses have plunged by over 90% since their peak more than a year ago.

Borget ignores the downturn, saying that the launch of the metaverse is still “very active and ongoing”. Daily unique active wallet addresses only show the number of users logging into the sandbox to make a transaction, but not users simply playing games and attending events like virtual concerts, he explains.

The sandbox said it had sold 70% of its more than 166,000 digital lots. In the first quarter, the sandbox said it generated $1 million in revenue as companies and users secured all of its 460 or so lots in a sale. More than half of owners keep their virtual land for over a year, Borget adds.

“We have more creators than ever, more users than ever, and more brands than ever. That’s because virtual lands and avatars have real utility. People see that they can play, engage and monetize their land and creations.”

Sebastien Borget, co-founder and COO of Sandbox

Borget expects double-digit player growth for the rest of this year and into 2024 as the sandbox fully opens up its Metaverse gaming platform by the end of Q3. The platform is currently restricting player access to select virtual worlds during set periods of time as it works to improve the platform.

Meanwhile, the company plans to release the Metaverse game on smartphones next year. The move should allow the sandbox to grab a chunk of the mobile gaming market, which accounted for half of the $183 billion in total gaming industry revenue last year, according to research firm Newzoo.

Borget’s ambition to build an open metaverse where anyone can become a creator and monetize their own creations is fueled by his own experience. Borget, who describes himself as a geek, believed that the barrier to entry for video game development was high because it required expensive computer hardware and advanced programming skills.

Borget, then an open-source developer, saw an opportunity in 2007 when Apple released its first iPhone and soon after allowed developers to create apps at low cost and publish them on the App Store. Together with Madrid, whom Borget met while working on a media platform, they founded Pixowl in 2011 to develop mobile games from San Francisco.

A year later, Pixowl launched the sandbox. Back then, it was a 2D game where players take on the role of God’s apprentice and create virtual worlds by dragging and dropping pre-made elements and drawing them on the screen of their mobile device. With a total of 40 million downloads and 1 million monthly active users in 2017, it quickly became a hit. But the boom didn’t last.

“Despite the success, there was frustration. Most of the dedicated creators left the company over time, despite all the societal fame and recognition we gave them,” recalls Borget. “We found that the reason was a lack of monetization, a lack of passing on some of the revenue they brought in to the developers as a contribution to the game.”

A glimmer of hope came later that year when Borget and Madrid discovered the blockchain game CryptoKitties. The mechanism that allows players to own their virtual cats in the form of NFTs and trade directly with other players shocked the two and prompted them to develop a blockchain version of the sandbox.

Her move caught the attention of Animoca Brands, which was also just then discovering the potential of blockchain technology in gaming thanks to CryptoKitties. In 2018, the Hong Kong-headquartered games maker acquired Pixowl for around $4.9 million and later forked the sandbox to focus on operating what is now the Metaverse gaming platform.

Borget says it will take at least five more years to complete building an open metaverse. Until then, he’ll continue to adopt the same mindset he used when convincing investors to back his company. “We just have to be patient, keep building the open metaverse, and be confident that we can make it,” says Borget.

Source link

Leave a Reply

Your email address will not be published. Required fields are marked *