Yield Guild Games raised $4 Million in Series A Funding to scale up the play-to-earn NFT business model. YGG is a group of investors and players who generate revenue through yield farming in crypto-based games.
YGG’s Play-To-Earn Roots
The business model of YGG was born from observing how Axie Infinity utilized play-to-earn with the release of the Small Love Potion (SLP) token. It is an in-game resource that players earn from winning matches. Since SLP is an ERC20 token, it can be exchanged for ETH or other tokens in UNISWAP. Then, it can be converted and cashed out for fiat.
Yield Guild Games is currently in the Alpha Stage, leasing out Axies to players who want to start playing Axie Infinity. YGG takes a fee from the revenue generated by players who borrow their NFT assets for yield farming efforts. As of May 28, Yield Guild Games players collectively earned 10 Million SLSP valued at $1.4 Million.
While most businesses suffered losses because of the pandemic, Axie Infinity benefited from it. This is because users without any background in crypto started playing Axie Infinity to put food on the table. A Coindesk article narrated how Axie Infinity became a viable alternative source of income in the Philippines. A mini-documentary featured an unlikely group of players in the Philippines – a mother, an entrepreneur, a recent college graduate, a pedicab driver and an elderly married couple. In fact, playing Axie Infinity beats a full-time wage in several developing nations around the world.
YGG as an Economic Partner of Crypto-Based Games
Dizon confirmed that YGG will be using the $4 million investment to purchase additional NFTs and support other games. Apart from Axie Infinity, Yield Guild Games is also widening its network in the rest of the Metaverse. For example, it acquired land in The Sandbox, keys in F1 Delta Time and already have members form an Alliance in League of Kingdoms.
Through Play-to-Earn, YGG aims to be the largest guild acting as an economic partner to these crypto-based games. Moreover, it aims to provide people needed to fill up the jobs required to build the Metaverse. Gabby Dizon, co-founder of YGG, summed up the vision of the company. He said, “Our primary goal is to scale play-to-earn to millions of players around the world.”
Commenting on the process of selecting games, Dizon told Decrypt, “When making investment decisions, YGG considers the play-to-earn tokenomics of the game and its plans for guild-based gameplay. For YGG, the most critical component is the monetization design in the way that players can earn money from the game. Provided this aspect of the game is made clear, and is potentially lucrative for players, YGG is comfortable investing in the game at a very early stage of development—perhaps even before it is launched.”
Landing a lucrative investment
It seems like YGG is not alone in recognizing the potential of the Play-To-Earn NFT Model. In the past, YGG only attracted Crypto Funds. Meanwhile, games and esports venture capital firms also participated in this round.
Ultimately, BITKRAFT led the Series A Round. This VC player has investments in more than 50 companies to date including Fortnite creator Epic Games and gaming television network VENN. BITKRAFT Senior Associate Piers Kicks told Decrypt why YGG attracted their attention. He said, “It is difficult to see any other group of founders possessing the combination of boots on the ground and deep industry experience required to execute on a vision as grand as this.”
Yield Guild Games boldly predicts that any game with an economy inside will adopt some form of play-to-earn in the next decade. With the backing of a best-in-class fund, YGG is in the best position to turn this into a reality.