Apeiron, developed by Aither Entertainment, stands as a prominent example of Hong Kong's burgeoning Web3 gaming scene.
This Play-and-Earn game garnered significant recognition last year, winning the Digital Entertainment Award at the Hong Kong ICT Awards. Currently valued at $50 million (approximately HK$400 million), it's a record-breaker, becoming the first Hong Kong-originated on-chain game IP to surpass a $100 million valuation after Animoca Brands.
Frank Cheng, one of the game's founders, shared his insights in an interview with CFTime. He revealed that despite operating for eight years, Apeiron initially garnered only moderate interest from Hong Kong investors. However, the global surge in Web3 technology attracted international investors, resulting in over $200 million in funding.
Frank Cheng, who holds an economics degree and has years of experience in fund management, explained his foray into game development. His childhood love for gaming, coupled with the rise of mobile games, led him to pursue his passion.
Lacking entrepreneurial and gaming industry experience, Frank Cheng actively engaged with the Hong Kong Entertainment Association and Digital Entertainment Association. This exposure highlighted the short life cycles of mobile games and the difficulty in sustaining teams and IPs despite high profits. It was through these associations that he met the current COO, Si Lingfeng, and formed his team.
Inspired by blockchain games like Axie Infinity in early 2021, Frank Cheng began exploring the Play-to-Earn model. Unlike many Play-to-Earn games that prioritize repetitive actions over gameplay, or rely on simple screenshots for investor pitches, Apeiron underwent a complete redesign to seamlessly integrate blockchain technology and innovative gameplay.
Apeiron combines card-based action-adventure combat. Players build planets in outer space, descend to the surface as their chosen characters, explore dungeons, and unravel cosmic mysteries.
Players can continuously build and expand their planets until they reach their maximum capacity. The January 2023 launch of a PvP arena and the APRS token further integrated blockchain technology into the digital entertainment experience.
Apeiron received high praise from the ICT judging panel, citing its "excellent product quality and innovative Web3 gameplay." The game currently boasts 100,000 daily active users.
Frank Cheng attributes Apeiron's success to its unique gameplay, which sets it apart from the competition. He anticipated that the ultimate competitors in the Web3 gaming space would be established Web2 giants. Therefore, Apeiron chose a differentiation strategy, focusing on unique gameplay and visuals to attract players seeking fresh experiences rather than directly competing with popular titles.
After deciding on the game's direction, the team sought funding. Facing limited interest from Hong Kong venture capitalists in Web3.0 games, they turned to overseas investors. Through connections, Aither Entertainment secured investment from W3GG (formerly YGG SEA, a Southeast Asian fund established by the renowned DAO YGG). This investment led to further introductions to investors and gaming guilds, expanding their network.
Inspired by Axie Infinity, Frank Cheng, Apeiron's creator, became an investor.
Frank Cheng emphasizes that pitching isn't just about securing funds but also finding the right partners. Apeiron's significant player base in Southeast Asia and South America is partly due to their global search for well-funded funds and local gaming guilds. This approach provides support, advice, and community building during game launches.
The team meticulously vets potential investors, focusing on background and funding sources to avoid collaborations with inexperienced or dubious entities. They prefer established funds with proven track records. Among their investors, the South Korean crypto venture capital firm Hashed and Axie Infinity's Vietnamese studio Sky Mavis served as lead investors. Hashed, known for its role in building numerous successful IPs, has been particularly helpful in guiding Apeiron's future development.
The funding journey wasn't without challenges. The Luna "implosion" in May 2022, with the algorithmic stablecoin UST severely de-pegging from the US dollar, triggered widespread market panic.
The subsequent crash of Luna, the Terra blockchain's native token, impacted some game investors. Fortunately, Apeiron's experienced and well-funded investors minimized the impact. However, the event significantly dampened the Web3.0 investment climate.
In response, the team proactively addressed changes in the NFT market, offering refunds to dissatisfied NFT holders. To strengthen brand recognition, the in-game mascot, Dood, has become a key IP. Frank Cheng explained that due to high advertising costs in overseas markets, collaborations with local publishers are crucial. The Dood IP is also expanding through animation, merchandise, film festivals, and licensing exhibitions, reducing user acquisition costs. He concludes that relying solely on market hype is unsustainable: "Web3 games need to offer real value and engaging gameplay."
With the recent decline in NFT and Play-to-Earn game hype, Frank Cheng believes that Web3 games relying solely on hype are unsustainable. He emphasizes that if gaming becomes solely about profit, the essence of gaming is lost. NFTs shouldn't just wait for market recovery; they should focus on building quality games to attract genuine players.
"I believe the future of Web3 gaming is still bright. Games are the best bridge connecting Web2 and Web3, attracting a large user base," Frank Cheng states. The key to success lies in developers truly understanding and integrating Web3 principles into game design.
Regarding the Hong Kong gaming industry, he acknowledges challenges such as over-investment and high costs. Esports team revenue models also require re-evaluation, moving beyond sponsorships and prize money. "I believe the future of the gaming industry is still bright. The key is to create truly fun and engaging games."
