Animoca Brands Pivots to Advisory Services: A Web3 Business Transformation

Animoca Brands, the Hong Kong-based Web3 company led by Yat Siu, has undergone a significant business transformation in 2024. The company's digital asset advisory unit now generates more revenue than its traditional gaming and NFT operations, marking a strategic shift in its business model.

Financial Performance and New Direction

Animoca reported $314 million in total bookings for 2024, representing a 12% increase from 2023. The digital asset advisory division emerged as the standout performer, generating $165 million in revenue—a remarkable 116% year-over-year increase. This division offers specialized services including token advisory, tokenomics structuring, marketing, exchange listings, node operations, and crypto trading.

Meanwhile, the company's traditional Web3 operations—gaming and NFT sales—generated $110 million, down 40% from the previous year. The remaining $39 million came from investment gains and corporate management fees.

Animoca successfully reduced its operating expenses by 12% in 2024, bringing costs down from $246 million to $217 million. These savings came from company-wide optimizations and the integration of artificial intelligence tools across various business functions. According to Yat Siu, the company is training AI agents with in-house expertise to better navigate the volatile crypto landscape.

Company Evolution

Founded in 2011 as a mobile gaming company, Animoca entered the blockchain space by investing in Dapper Labs, creators of CryptoKitties. This move led to key acquisitions including Pixowl (creators of The Sandbox) and investments in Sky Mavis (Axie Infinity).

A turning point came in 2020 when Animoca was delisted from the Australian Stock Exchange due to its crypto activities. This apparent setback proved beneficial as the company's private valuation reached $1 billion, eventually growing to $5 billion by January 2022.

Current Financial Position

Despite declining Web3 gaming revenues, Animoca has strengthened its balance sheet. The company now holds:

• $293 million in cash and stablecoins

• $538 million in digital assets

• $2.9 billion in off-balance-sheet token reserves

• $564 million in investments across 540 projects

However, the valuation of its private equity investments has dropped by 18%, from $690 million to $564 million, reflecting broader crypto market challenges.

Regional Strategy and Future Outlook

Animoca has observed significant differences in blockchain adoption between Eastern and Western markets, with Asian gamers showing greater acceptance of the technology. This insight has influenced the company's decision to strengthen its Asian presence, including opening a major new office in Hong Kong.

Looking ahead, Yat Siu remains optimistic about growth in 2025, citing a more favorable U.S. political climate. However, he acknowledges potential economic risks that could impact the Web3 sector.

Conclusion

Animoca Brands' shift to prioritizing advisory services represents a strategic adaptation to changing market conditions in the Web3 space. By diversifying revenue streams and embracing new technologies, the company is positioning itself for continued relevance in the evolving digital economy, though its increasing reliance on advisory services over gaming represents both an opportunity and a potential vulnerability.