The Sandbox confirms ~$2M in Investments from Square Enix, True Global Ventures, B Cryptos

“The Sandbox” (TSB Gaming) received ~US$2m investment in 2019 from Square Enix,

True Global Ventures, B Cryptos

• In Q3 2019, Animoca Brands received US$2.01m in cash and cryptocurrency via the issue of SAFE convertible securities and presale of SAND utility tokens by its subsidiary TSB Gaming Ltd. 
• Investors included Square Enix, B Cryptos, and True Global Ventures 
• This announcement is being made available now as the Company could not issue it in 2019 owing to concerns raised by the ASX 
• TSB Gaming had previously raised US$2.5m via SAND and SAFE notes (see announcement of 23 May 2019 for details), for a combined US$4.51m from both raises
• The Sandbox is a virtual world where players can build, own, and monetize their own voxel gaming experiences on the Ethereum blockchain. It is one of the first decentralised, community-driven game platforms, providing users with true ownership of their creations as non-fungible tokens (NFTs)
• The Company expects The Sandbox’s decentralized virtual world  to launch in the second half of 2020
• More recently, The Sandbox conducted two successful LAND presales, raising over 1,300 ETH by selling more than 10,000 LANDs; the third LAND presale begins on 31 March 2020

20 March 2020: Animoca Brands Corporation Limited (“Animoca Brands,” or the “Company”) is pleased to update the market with an investment update that the Company was unable to issue via the Australian Securities Exchange (“ASX”) owing to concerns raised by ASX. Animoca Brands now advises that its wholly owned subsidiary TSB Gaming Ltd. (“TSB Gaming”) executed agreements between July and September 2019 to raise US$2.01 million, consisting of 83% in cash and 17% in Bitcoin and Tether cryptocurrency at the time of the transaction, through the issue of “SAND” utility tokens and simple agreement for future equity (SAFE) convertible securities. SAND will be utilised in the upcoming blockchain version of The Sandbox user generated content game platform (the “Game”). 

The investment was made by Square Enix Co., Ltd. (“Square Enix”), B Cryptos Inc. (“B Cryptos”), Mindfulness Venture Fund I, L.P. (“Mindfulness Capital”), and True Global Ventures 4 Plus Fund GP (“TGV”), among others (the “Investors”). 

Square Enix Co., Ltd. develops, publishes, distributes and licenses SQUARE ENIX®, EIDOS® and TAITO® branded entertainment content around the world. The Square Enix group of companies includes a global network of leading development studios and boasts a valuable portfolio of intellectual property, including: FINAL FANTASY®, which has sold over 149 million units worldwide; and DRAGON QUEST®, which has sold over 80 million units worldwide; TOMB RAIDER®, which has sold over 75 million units worldwide; and the legendary SPACE INVADERS®. Square Enix Co., Ltd. is a Japan-based, wholly owned subsidiary of Square Enix Holdings Co., Ltd.  

TGV is a global distributed ledger technology equity fund licensed under the Monetary Authorities of Singapore as a venture capital fund that invests in serial entrepreneurs across four verticals in over 30 cities. Founded by a group of serial entrepreneurs turned investors, TGV has a footprint of over 80 investment partners including seasoned GPs of VCs, top corporate executives, and family offices that help accelerate TGV’s portfolio companies globally.
 
B Cryptos is Japan’s first FSA-licensed (Licensed Financial Institutions) investment fund that focuses on blockchain startups and encrypted digital assets. B Cryptos is partnered with B Dash Ventures, one of Japan’s top-performing venture capital firms; Liquid Group, a FSA-licensed Japanese cryptocurrency exchange with global service coverage; and ICON, a global interchain project aiming to create an environment for real-world use of blockchain technology.

The Sandbox game franchise is one of the world’s largest independent user-generated content and gaming platforms, with 40 million downloads and over one million monthly active users. The upcoming voxel-based blockchain version of The Sandbox – which will introduce new creative and commercial possibilities by allowing users to create voxel items and gaming worlds from the digital equivalent of building blocks – has been named one of the top 10 most anticipated blockchain games globally and one of the Top 50 Blockchain Gaming companies in the world (source: BlockchainGamer.biz).

The blockchain version of The Sandbox is a virtual world being built on the Ethereum blockchain to allow players to build, own and monetize their own voxel gaming experiences. The Company’s vision is to offer a deeply immersive “metaverse” in which virtual worlds and games will be created collaboratively and without central authority. 

Animoca Brands intends to capitalise on the popularity of user generated content (UGC) gaming by giving players the benefits of true digital ownership over their creations in the form of non-fungible tokens (NFTs), allowing players to trade or sell NFTs without restrictions. NFTs are virtual tokens for digital scarcity, security and authenticity, and in The Sandbox they represent objects, items, and real estate in the game world. 

User-generated digital assets in the blockchain version of The Sandbox are ERC-721 or ERC-1155 tokens, depending on their scarcity. Smart contracts track token ownership at the individual token level: each item has a unique identifier and, optionally, unique properties stored as metadata.

SAND is the utility token used throughout The Sandbox ecosystem as the basis of transactions and interactions. It is an ERC-20 utility token built on the Ethereum blockchain. It will be used across the ecosystem by gamers, developers, and publishers, allowing content creators and players to exchange content such as assets and games, and build a user-based platform of rewards while developing an ecosystem where users share their unique gaming creations.

The Sandbox features three main components: a VoxEdit NFT builder for building voxel game ASSETs (items and scripting), a Marketplace for buying and selling ASSETs, and the Game Maker tool where complete interactive games can be constructed and shared on a user’s LAND (unique digital locations on which players can build and monetize games). Together, these components offer rich, easy-to-create voxel worlds and game experiences and the ability to safely store, trade, and monetize creations through blockchain, allowing creators to benefit from their creations.

ASSETs allow users to implement interesting and nuanced gameplay mechanics by assigning predefined behaviors through visual scripting nodes, which enables users to transform LAND from empty real estate into a full game experience.

LAND can be combined into larger groupings (ESTATEs) to permit more ambitious game experiences. There are 166,464 LANDs in The Sandbox, and each is tokenized as a ERC-721 non-fungible token (NFT) that uses the transparency of public distributed ledger technology to track its uniqueness and enable true digital ownership, including the ability to sell or rent out LANDs.

Users can get an overview of The Sandbox blockchain virtual world at https://www.sandbox.game/en/land/map/?x=48&y=48

The Sandbox has conducted two successful LAND presales so far in 2020, raising over 1,300 ETH by selling more than 10,000 LANDs; the third LAND presale begins on 31 march 2020.

The Company expects The Sandbox’s decentralised virtual world to launch in the second half of 2020, with the full launch of the blockchain version of the Game to follow. The Company will update shareholders on major developments.

Management commentary
Yat Siu, co-founder and chairman of Animoca Brands, said: “Like multiple generations, we grew up playing amazing games such as Space Invaders, Final Fantasy, and Arkanoid, and so it’s a special privilege and honour that the legendary game company Square Enix has invested in The Sandbox. Together with the investment from B Cryptos, we are now closer to bringing The Sandbox to the Japanese market.”

Sebastien Borget, COO of Pixowl and of TSB Gaming, said: “The Sandbox is a pioneer in the space of blockchain gaming, NFTs, and true digital ownership, and we are thrilled to have Square Enix with us as a strategic investor, supporting our ambitious vision of building the Metaverse where Creators can make games on their LANDs and trade ASSETS on our marketplace in a totally decentralized manner.” 

Dusan Stojanovic, founding partner of TGV, commented: “We are very excited to support The Sandbox, which we believe will create a new digital asset class as well as address some of the challenges to achieving interoperability for games. We look forward to supporting The Sandbox in our 30 cities across Asia, Europe and North America, with the backing of our 80 partners.”
 
Hiro Motoyoshi, CEO of B Cryptos, commented: “The Sandbox universe that Animoca Brands is creating is in line with how we see entertainment and new technologies coming together to create a new entertainment experience and expand the role and impact of entertainment in future society. In a narrower sense, we see The Sandbox as one of the catalysts that will shed new light on the underlying technologies (including blockchain) that make such innovative experiences possible. We look forward to supporting The Sandbox on its journey and have high expectations for where that journey leads.”

Transaction details
Between 9 July 2019 and 19 September 2019, TSB Gaming raised US$2.01 million by the issue to the Investors (including Square Enix, B Cryptos, Mindfulness Capital, and TGV) of a total of 288,194,444 SAND tokens and SAFE (simple agreement for future equity) notes. 

The Investors allocated their investment to the purchase of both SAND and future equity via the SAFE notes. The terms of the SAFE are identical to the terms announced in the Company’s ASX announcement of 23 May 2019. 

The SAND utility token confers no equity or ownership rights in Animoca Brands, TSB Gaming Ltd., or The Sandbox. 

The investment was conducted on the same terms as were previously announced by the Company in May 2019, when TSB Gaming received investment of approximately US$2.5 million in cash and cryptocurrency via the issue of SAFE convertible securities and SAND utility tokens (refer to ASX announcement of 23 May 2019).