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Phil Hall
Phil Hall
Jan 19, 2022

Mechanism Capital launches $100M Gaming Fund

Mechanism Capital announced a $100M gaming fund to support play to earn games. They believes blockchain games will be the future of gaming.
Mechanism Capital launches $100M Gaming Fund

The firm announced a $100M Gaming Fund to support play to earn games. It previously invested $100M in over 20 projects including in blockchain games like Star Atlas, Ember Sword, Yield Guild Games, and Merit Circle.

What is Mechanism Capital

Mechanism Capital is an investment firm mostly focused on DeFi. After some early-stage investments in crypto gaming, they jumped into the trend with both feet announcing 100 million dollars in a new fund to support the ecosystem. 

The firm believes blockchain games will definitely be the future, although they can’t clearly define why at this stage.

According to one of their Investors and Authors, Eva: 

In the medium term, we’ll see traditional-looking play-first games experiment with new monetization models using tokens and NFTs while attempting to onboard both traditional gamers and earn-first gamers. And, in the long-term, we’ll see a new generation of gaming that uses crypto that goes beyond just adding P2E mechanics

Who’s behind the $100M fund

Mechanism Capital partnered up with Steve Cho, a former Apple App Store manager with extensive experience in “NFTs and blockchain gaming,” to help them market the project the fund will support.

Steve Cho believes the Sky’s no longer the limit for NFT-based games, and is a firm supporter of blockchain gaming. With his ample experience, the fund aims to find the most promising games in their infancy.

“Play-to-earn has barely penetrated the gaming market, but we expect this to change in the next few years with mobile leading the way” commented Andrew Kang, co-founder of Mechanism Capital.

Marc Weinstein, head of platform at the firm, stated they wil back games that people want to play, regardless of crypto incentives. This new formula is being branded “play to earn” by some games in the industry, and this new term is gaining popularity quickly. 

The firm intends to form direct partnerships with game developers, not just fund their projects. This is not a launchpad, but a true investment fund - kinda like Shark Tank for crypto enthusiasts!

Are we going to see more investment funds in crypto gaming?

Graph Published by Mechanism Capital on their article "The Financialization of Fun: Crypto Gaming Thesis"

We’re almost guaranteed to see more investment funds in the near future. There has been an increase in investment firms’ interest in the gaming space. Last month, Solana Ventures launched its second gaming-focused investment for a total of $250 million divided in two funds. In November 2021, Forte also closed a funding round for $725 million to help push blockchain gaming forward.

Being one of the most profitable, quickly growing market in 2022 has its benefits, and we can’t wait to see what developers will ship thanks to more economic power to back them up. 

These funds can be the first step into creating real, playable, fun games that also have a crypto component, rather than crypto being the sole reason people play them.

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