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Animoca Brands Corporation Becomes a Public Company on the Australian Stock Exchange

June 26, 2014 — by Catherine Quinton

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Animoca Brands and Black Fire Minerals ( BFE) have announced an interesting development for both companies. BFE will be acquiring 100 percent of Animoca Brand’s issued capital, and will change its name to Animoca Brands Corporation, with significant change to the scale and scope of the BFE business activity. The terms of the agreement include the issuing of 1,000,000,000 ordinary BFE shares for a consideration of $5,000,000, as well as issuing 600,000,000 performance shares to Animoca Brands, which will be converted to ordinary shares at $0.005 per share if the company achieves certain revenues for the year ending June 2015 and June 2016. The terms of the proposed performance shares must be approved by the Australian Securities Exchange.

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BFE will be acquiring 100 percent of Animoca Brand’s issued capital, and will change its name to Animoca Brands Corporation, with significant change to the scale and scope of the BFE business activity.

As well as the name change, BFE will undergo a capital consolidation and then raise additional capital of at least $3,000,000 but no more than $5,000,000, with Taylor Collison Limited as lead manager. The company expects to have net tangible assets in excess of $3 million.

Prior to issuing the shares to acquire Animoca Brands, BFE will divest its core assets and projects with a sale that may result in a distribution in specie to its shareholders. This divestment must be approved by the shareholders. The BFE Board believes the proposed acquisition of Animoca Brands and the change of business which follows will be positive and in the best interests of the shareholders.

The funds raised under the leadership of Taylor Collison will be used in four ways: for working capital, to advertise and market the company’s games, acquiring the intellectual rights needed to create more games, and acquiring the rights to publish promising titles from third party studios.

Because there will be significant changes to the nature and scale of the company’s main business through acquiring Animoca Brands, re-compliance with the admission requirements of ASX, including lodgement of a prospectus with the Australian Securities and Investments Commission, is required. This will facilitate, among other things, the planned capital raising.

The BFE Board believes the proposed acquisition of Animoca Brands and the change of business which follows will be positive and in the best interests of the shareholders.

Animoca Brands is a 2014 spin-off from Appionics, commonly known by the consumer name, Animoca. Their focus is on creating mobile games using licensed intellectual properties and publishing games developed by third parties. They distribute games globally on a variety of platforms, including the Apple App Store, Google Play, Amazon and the Samsung App Store. The majority of their games are free-to-play, generating revenue with in-game purchases of virtual items and with in-game advertising. Animoca Brands’ games have been downloaded over 80,000,000 times and are played by millions around the globe.

Animoca Brands will continue to launch new products, including new mobile games based on the characters from the licensed intellectual properties in its portfolio, new, original Animoca Brands games, and new titles developed by third parties. They will also continue to seek to secure additional licenses for popular characters on which to base new games.

This proposed transaction will include the resignation of two directors and the addition of five new directors. Mick Billing and Matthew Sheldrick will resign as directors and Martin Green will continue as a director. New directors are David Kim, Yat Siu, Robert Yung, David Brickler, and Richard Kuo.

Animoca Brands’ focus is on creating mobile games using licensed intellectual properties and publishing games developed by third parties.

David Kim and Yat Siu are co-founders of Animoca Brands and Appionics, known by its consumer name, Animoca. Kim is CEO of Appionics, and was previously CEO of mail.com Corporation, a personalized email and messenger service. He also manages several independent financing and advisory projects. He has served on the boards of a variety of Pacific Rim companies, including Bamboo Networks in Hong Kong, Viztel of Malaysia, and Daum Corporation of Korea. In 1999, after leading China.com to its Initial Public Offering, he became the youngest CFO of a company listed on the NASDAQ.

Yat Siu is founder and CEO of OutBlaze, a digital media company specializing in gaming, cloud technology and smartphone/tablet software development. In 2009, he successfully pivoted OutBlaze from B2B messaging services to B2C entertainment. He is a director for TurnOut, a partnership between Outblaze and Turner Entertainment. In 2012, he originated ThinkBlaze, the research entity of OutBlaze, focused on investigation socially meaningful issues related to technology.

Robert Yung is CEO of Animoca Brands and a director of Appionics. Prior to this, he was founder and CFO of Redgate Media, a venture-based Chinese television and outdoor media holding company. He was also co-founder and Chief Strategy Officer of One Media Group, a Hong Kong-based magazine company, overseeing its IPO in 2005. He was also CEO of One Studio, a Hong Kong venture-backed web development company and OS Media, a Chinese television advertising sales company.

Animoca Brands will continue to launch new products, including new mobile games based on the characters from the licensed intellectual properties in its portfolio, new, original Animoca Brands games, and new titles developed by third parties.

David Brickler is the senior director of applications for World Television International, one of the world’s largest non-profit organizations. Prior to that, he served as CIO for Mizuho Securities Asia Limited, executive director of Ernst & Young in Hong Kong, and global CIO for the Noble Group, one of the largest commodity traders in the world. He was also founder and CEO of Emergent Technology, a venture-backed supply chain company in Hong Kong and VP of Information Technology at Caspian Securities.

Richard Kuo is founder and CEO of Pier Capital, a boutique investment banking firm specializing in technology services. He is a non-executive director of Probiotic Limited, Favourit.com, and the Australian Art Event Foundation; he has also held directorships of Equity Capital Markets Limited and Glenorchy Arts & Sculpture Park. Prior to founding Pier Capital, he practiced as a lawyer, specializing in corporate law and then moved to investment banking as a corporate adviser. He has advised on a wide range of domestic and cross-border transactions involving technology and digital media companies.

 

Asia 2014Video Coverage

Robby Yung: The Power of Mobile Distribution | Casual Connect Video

June 10, 2014 — by Catherine Quinton

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“Looking at the US market overall, obviously it’s the biggest gaming market in the world for mobile games,” said Robby Yung during Casual Connect Asia 2014. “I think if you separate it out by platform, a lot of people think of the US as really an iOS-driven market, but in fact the US is number 1 for downloads on both iOS and Android.”

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Robby Yung, CEO, Animoca Brands

Robby Yung, CEO of Animoca Brands, says this adventure grew out of a long friendship he has had with Yat Siu and David Kim, the founders of Animoca. All three have much in common as serial entrepreneurs. As CEO, Yung oversees the day-to-day operations of Animoca Brands, spending much of his time on licensing, M&A, and corporate development, all of which he has previously done at other media and technology companies he started.

The most satisfying aspect of his work is closing rounds of funding, whether private or public. He claims, “From the first time in 1999 or the twelfth time in 2014, it just never gets old.” And how has he become so successful doing this? “Practice, practice, practice!”

Mobile Distribution

A tipping point in his career came in March 2013 with the adoption of Candy Crush in Hong Kong. He describes the phenomenon, “Literally a quarter of the population was playing it, and you couldn’t sit in a restaurant or ride on public transport without seeing someone feverishly crushing those virtual candies. The user demographic seemed indefinable, it was just ‘everyone’. It’s moments like that when you are staggered by the power of mobile distribution.” He states that the massive success of apps like Candy Crush validated for him Animoca’s strategy: focus on casual mobile titles for all audiences, including women, children and adults.

Believing in F2P

Yung is a proponent of F2P, believing it is the logical transactional format in the app world. He points out that allowing consumers to try the product is far more compelling than advertisements, game trailers, and reviews, and says, “I love the fact that F2P allows everyone to enjoy our titles, whether or not they choose to play.” He does dislike the automatic negative comments that F2P seems to generate in the app industry. While some F2P implementations can be obnoxious and greedy, he insists that overall it has hugely expanded the market for countless developers and publishers. Because of that, he considers F2P a positive force in the games industry.

For his own gaming, Yung prefers to use his smartphone. Currently, he is playing Doraemon Repair Shop Seasons, one of Animoca’s brand-based time management games. He says, “It’s driving me nuts—it gets quite hard—but I will not admit defeat.”

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Currently, he is playing Doraemon Repair Shop Seasons, one of Animoca’s brand-based time management games.

He does not own a console; he would rather be gaming on his smartphone or tablets. However, he does take the opportunity to play console titles from time to time at work or at friend’s homes.

When at home, Yung spends his time in the physical world, with his family, and finds his young daughter takes up most of his time. He also likes to run, including the occasional marathon, something he claims is necessary to offset his other hobby of eating.

Smartphone Growth

In the next few years, Yung believes we will see the “next five billion” get onto smartphones and smartphone gaming, saying, “Seeing how this audience and these gamers will shape the future of the games industry will be interesting indeed.” He emphasizes that Animoca have always seen themselves as a gaming company for everyone; they were one of the first Android game developers, and they were one of the first to establish a strong foothold in developing markets. And he maintains, “We will keep trying our best to stay on top of trends as they arise.”

 

DevelopmentExclusive InterviewsIndustryOnline

Yat Siu on Succeeding in the Asian Market

April 23, 2014 — by Catherine Quinton

Yat Siu, Co-Founder of Animoca, as well as Founder and CEO of its parent company Outblaze, has always been attracted to technology, although his educational background is in music. His interest in gaming began as a child playing on his Commodore 64, but he never expected to work primarily with games, simply because it was such a fledgling industry at the time. But as he followed his interests, his career included various technology areas, such as lifestyle, Internet, Web, social media, and games.

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Yat Siu, Co-Founder of Animoca

Creating Animoca

When Siu co-founded Animoca, he recognized the high investment necessary in publishing and marketing a hit game as a formidable problem. The games industry is a crowded and competitive market, and with so many people focused on creating the next big hit, the chances of succeeding are limited. So Siu went a different direction, with what he calls a “supermarket approach.” Animoca offered a broad selection of titles that would appeal to a wide range of the global market, including the underserved female audience.

This plan, particularly catering to girl gaming and the “cute” niche, allowed them to become profitable in their first year. The strategy also allows them to distribute apps very effectively because their games are played by a broad range of people over the globe, with 220 million downloads by early 2014. For the future of Animoca, Siu expects to continue growing the business, but equally important, he wants them to continue having fun, learning, unlearning, and learning even more.

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This plan, particularly catering to girl gaming and the “cute” niche, allowed them to become profitable in their first year.

To navigate the inevitable crises in this business, Siu uses negotiation skills and a logical, information-based decision-making process. And he insists, “Develop the ability to avoid panic!”

Keys to Success

Siu emphasizes that the most challenging aspect of working in the games industry is its ever-changing nature. To be successful, you must identify trends early, before they become established. It is essential to be constantly learning and observing, while discarding outdated information and modes of thinking. He says, “Running tech companies is a mountain of hard work, and often your efforts don’t succeed at first, but the key is to adapt, persevere, and follow your vision.”

For a game’s success, Siu feels the most important factor is player engagement. He insists, “Whether it is the story, the art, the difficulty, the game play, or the social features, what you want is for your game to engage players.”

“Whether it is the story, the art, the difficulty, the game play, or the social features, what you want is for your game to engage players.”

Dramatic Differences

Siu emphasizes that the Asian market is far from being a single market. In fact, it is a multi-market with dramatic cultural and language differences between countries, and a game can succeed in one country while failing miserably in another. There are dramatic cultural and language differences between countries, even such geographically close ones as China and Japan. An example of these differences is the strong trend toward portrait-based, one-handed game play in Japan, something which is not evident anywhere else.

Asia, he tells us, is fragmented with many markets at different stages of development, affluence, and hardware penetration. For instance, China is a fast-growing smartphone market; Korea is a mature one. And in South Korea, China, and Japan, ecosystems are emerging and interacting with hardware companies and telecoms to provide new methods of distribution.

In Asia, the vast population is localized into single markets; being successful in one market is not considered a problem.

In contrast, in the West, the USA is a single enormous market and no European market is even close to its size. App developers focus on what will be popular in the US. In Asia, the vast population is localized into single markets; being successful in one market is not considered a problem. The West concentrates on a global market while developers in Asia localize for a single market. Asia is moving toward localized, culturally relevant content rather than emphasizing products which will be easily transferable to other markets and cultures.

Asia’s Influence on the Industry

Over the years, Siu has seen the games industry become more mainstream and accessible to everyone; focused on delivering a personal experience. In the past, games were experienced on a special shared device, a console, or gaming computer. Now games are played primarily on the device you use to communicate, to manage your contacts, and to connect to the internet, your social circle, and your social networks. Gaming is now moving toward the personal and the personalized with Siri-like services in games and more portable or wearable computing devices.

Siu has noted that the games industry thrives on borrowing and adapting, and the influence of Asian models and innovations continues to increase. For example, free-to-play came out of South Korea, and Asian game titans are now starting to dominate. He expects to see continued cultural exchange and assimilation of games, and at Animoca, the emphasis is on finding the appropriate market or niche for a title. Another trend in the Asian market is the focus on producing hardcore games that require significant investment in player time and effort, a trend which is now spreading to the US.

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He expects to see continued cultural exchange and assimilation of games, and at Animoca, the emphasis is on finding the appropriate market or niche for a title.

Breaking into the Asian Market

As developers attempt to break into the Asian market, the most frequent mistakes he sees come from allowing personal bias and experience to get in the way when making decisions. He points out that you can’t take your intuition and habits for granted in a new market. It is critical to study the environment, the opportunities, and the obstacles and use them to make sensible, data-driven decisions.

The most important advice he gives for making a game stand out in the Asian market? “Move to Asia!” Or at least work with good local partners.

Yat Siu will be speaking about what it takes for Asian mobile game developers to break into the US market at Casual Connect Asia 2014 in Singapore next month. Find out more about his session on the conference website.

 

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