Having already scored $2.4 million in seed funding since launching their startup at the beginning of the year, James and Robbie Ferguson, brothers and co-founders of Fuel Games, believe the blockchain and gaming worlds could be mutually transformative.
The seed funding round was led by Continue Capital and Nirvana Capital, and also included Sora Ventures and US digital currency exchange Coinbase.
According to the brothers, the funding followed the success of their first blockchain-based game, Etherbots, which they call the “first real multiplayer strategy game” using blockchain.
In Etherbots, players build and fight robots on a blockchain platform, winning, trading and buying robot parts as they go.
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Although they sold $1 million in robot parts within two weeks of launching, Robbie tells StartupSmart the game was “mostly a proof-of-concept”.
The founders “leveraged that success in order to build the game up and acquire some seed funding”, he says.
After the success of Etherbots, the co-founders travelled to the US to attend Blockchain Week in New York, where they set up some meetings, and “the [funding] round was oversubscribed within two days of us touching ground”.
“We had a successful first product … investors were able to see that we could create and deliver a working platform,” says Robbie.
The next step for cryptocurrency
The Fuel Games founders say they were targeting Coinbase specifically, partly to give the startup a sense of legitimacy and to make onboarding new players as seamless as possible.
“We chose them specifically because it shows we’re only partnering with the most legitimate names in the space,” Robbie says.
“Crypto can be a bit murky sometimes. We’re trying to make it a lot easier and less scary for people to be onboarded.”
And, once gamers are on board, it could mean big things for the whole crypto market.
“Gamers are used to having digital currency in their own games,” Robbie says.
“This could be the next step in early adoption of cryptocurrency generally.”
However, even if it doesn’t lead to an uptick in use of cryptocurrencies generally, the brothers believe using blockchain in gaming will solve a long-standing problem around secure trading within games and eSports.
According to Robbie, billions of dollars worth of virtual products are traded through in-game marketplaces every year. People are making a livelihood through gaming — building careers and reputations — but there are “no assurances about the value or ownership of the assets they spend time and money on acquiring”.
Blockchain could “bring transparency to an industry that’s in the dark with regards to regulation”, Robbie says.
For example, James adds, games manufacturers may release a one-off special edition sword or costume, available for $50 or even $100, saying it’s “super-rare”.
“Companies can, and have, released that item again, and broken all the promises about the value and the scarcity of that item,” James says. “They get to act like a centralised bank.”
“With blockchain, there’s no need to take something on the word of the game publisher any more,” he adds.
Not a gaming startup
Now they have completed their seed funding raise, Robbie and James say they’re not going to rest on their laurels; Fuel Games is tonight launching a new game, Gods Unchained, which James says will be the “world’s first eSport which integrates blockchain”.
The pair are also working on their Apollo platform, a “scalable solution to run decentralised games”, which they will provide as a service to other game studios.
In fact, despite their focus on the gaming space so far, the founders say they don’t see Fuel Games as a gaming startup; they see it as a software startup. The best way to build a platform for gaming and prove it works was to build a game on that platform.
“Our background is in blockchain and technology, not gaming,” James says.
“This was the business model we always wanted. We saw creating games as the way to create the most successful platform.”
To fill this knowledge-gap, the pair have recruited eight gaming experts to their Sydney team, plus designers from all over the world; Justin Waldron, co-founder of mobile game developer Zynga, has been brought in as an adviser.
As co-founder of a six-month-old startup, James says: “I don’t know if I should be giving advice.”
But, if there’s one thing he would say to new startup founders in the blockchain space, it’s to “work hard and shift products fast” to get something out there with an actual use case.
“Build fast and fix it later”, he adds, although there’s an exception to this when it comes to financial contracts and code. With blockchain, if there’s an error in your financial contracts, the very nature of the technology means you can’t go back and correct it.
“All the economics of the game have to be thought out beforehand, because it’s immutable,” James says.
“Build everything as soon as possible, except for your financial code.”