New Investment Opportunities in Web3 Gaming: Insights from Veteran Investors on Industry Trends and Entrepreneurial Strategies

On January 31, entrepreneurial mentor and Web3Labs partner Kevin Shao, along with Huofeng Capital partner Chen Yuetian, conducted an in-depth discussion on investment and entrepreneurship in the blockchain gaming sector, sharing valuable investment experience, entrepreneurial advice, and industry trend analysis. Below are some selected excerpts:

Chen Yuetian mentioned that after leaving Innovation Works in 2020, he has been engaged in personal angel investments, some of which were invested in cryptocurrency projects and yielded returns that exceeded those from equity investments. This made him realize that capitalizing on the crypto market is easier to achieve, thus he established Huofeng Capital in 2021 to engage more deeply in investments in this field.

He stated that Fire Phoenix Capital is focused on the transformation that technology brings to the media industry. Their investment strategy concentrates on four major technological directions: cloud, XR, AI, and blockchain, believing that these underlying technologies will have a profound impact on the iteration and evolution of media.

In the gaming industry, Chen Yuetian stated that they are focused on the empowerment of the combination of blockchain and gaming. He believes that the changes brought by blockchain at the storage level, combined with the value characteristics of virtual items in the metaverse, have introduced new economic models. They are also paying attention to the applications of blockchain at the computational level in gaming.

Kevin shared the investment direction of Bitrise Capital. He stated that after 2020, DeFi and gaming produced a wonderful chemical reaction, and they began to think about the new business models and user experiences that blockchain brings to gaming. Currently, they are focusing on several directions: first, gaming infrastructure to lower the barriers to user participation; second, game content, focusing on fully on-chain games and the blockchain attempts of traditional gaming giants.

When it comes to the points of concern when investing in new blockchain game projects, Kevin believes it is necessary to discuss the playability of the game and user retention. He pointed out that not all games are suitable for conversion to blockchain games; PvP games may provide users with a better experience under the transparent framework offered by blockchain. In terms of team configuration, he believes that in addition to game development talents, members who understand the crypto field are also needed to solve development difficulties.

Chen Yuetian stated that he will pay attention to the specific applications of cryptocurrencies in games, such as the use of tokens and NFTs. He also values team quality and will ask questions about game understanding to get to know the team.

For large gaming companies testing Web3 projects, Chen Yuetian believes this is just a trial of industry innovation and has not yet become a priority. However, for Web3 entrepreneurs, this is an opportunity that should be seized to lay out plans and strengthen their positions before the big companies enter the market.

Kevin believes that the approval of Bitcoin ETFs will drive more crypto assets to become mainstream allocations. After the industry’s capital pool expands, it will promote early investors to profit, and the overflowing wealth may continue to flow into infrastructure and other sectors.

Chen Yuetian believes that AI will profoundly impact the entire gaming industry, especially simulation and dialogue games. Web3 games combine well with simulation management and strategy games, and in the future, we may see Web3 simulation games with better experiences and richer gameplay.

Looking ahead to 2024, Kevin believes the market has begun to bottom out and rebound, and investment institutions will be more proactive in arranging the primary and secondary markets. Chen Yuetian stated that more attention will be paid to the unlocking cycle of investments, believing that 2024 may present better opportunities for investment than 2025. He advises entrepreneurs to innovate in conjunction with new trends to create differentiated competitiveness.