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TOKYO — Japanese blockchain gaming startup double jump.tokyo on Wednesday said it has raised 3 billion yen ($24 million) from 16 investors to accelerate the development of new titles with major gaming companies.
The Series C funding round was led by Jump Crypto, a unit of U.S. trading group Jump Trading, along with crypto finance startup Amber Group and Japanese venture capital firm Jafco. Other participants include the venture capital arm of Japanese advertising giant Dentsu, South Korean gaming company Wemade and China-based venture capital firm Fenbushi Capital.
The deal signals wide-ranging interest for games that incorporate cryptocurrencies, despite a major hack involving one of the industry’s most popular titles. Double jump.tokyo did not disclose its valuation in the round.
“The 3 billion yen raised will be used to invest in the joint development of IP-based blockchain games with major game companies, as well as in the underlying products, partner companies, and decentralized autonomous organization (DAO) projects,” CEO Hironobu Ueno said in a news release.
Founded in 2018 by Ueno, a former executive at gaming company Mobcast, double jump.tokyo has developed several crypto games including My Crypto Heroes, a role-playing game in which users can trade items and characters as non-fungible tokens to earn cryptocurrency.
The company has also announced partnerships with major Japanese gaming companies Square Enix, the studio behind the Final Fantasy and Dragon Quest series, as well as Bandai Namco Entertainment and Sega. Bandai Namco and Sega have previously invested in double jump.tokyo.
Games have become one of the most popular applications for cryptocurrency. Startups are racing to churn out titles, fueled by the early success of Axie Infinity, a game that lets players breed and battle creatures to earn crypto. Crypto games have become particularly popular in Southeast Asia, partly thanks to the rise of groups that lend NFTs to gamers who can’t afford them.
But industry observers say the nascent industry has yet to develop a high-quality game that can attract casual gamers. The lack of adoption among this segment means players are primarily cashing out their earnings instead of reinvesting their crypto back into the game, raising concerns over its sustainability.
Despite Japan’s strict rules around cryptocurrency — entrepreneurs complain about the stringent requirements for listing coins on exchanges and unfavorable tax treatment — competition among startups in the country is heating up. Digital Entertainment Asset, a crypto gaming developer incorporated in Singapore but run by Japanese management, on Wednesday announced collaborations with several new comic book titles to turn their characters into NFTs.
“It normally takes three to four years to make a game,” co-founder and co-CEO Kozo Yamada said at a news conference in Tokyo. “We have four new titles coming out this year, and the fact that they will be of a certain level of quality in 2022 is an overwhelming competitive advantage. While other companies are researching the token economy model and developing major titles, we will seize the market.”