Magic Eden is the Solana ecosystem’s largest NFT marketplace, and it recently raised a war chest of capital that valued the nascent firm as a crypto unicorn.
We now know how the corporation is investing some of its cash: it has formed a gaming-focused investment arm.
Today, the company announced Magic Ventures, a venture financing arm that would focus solely on Web3 gaming. To that end, the business has appointed Tony Zhao, formerly of Chinese gaming behemoth Tencent, as its new head of gaming investments.
Zhao said that Magic Ventures’ investments will be “purely strategic in nature,” assisting producers of NFT-powered video games rather than investing with the aim of generating a profit.
“We’re not thinking about returns—never have and never will,” said Zhao. “It’s just to align our partnership together, right? We truly want to be the go-to partners for these developers.”
When Magic Ventures signs game creators, they will become part of the Magic Eden ecosystem, which includes a launchpad for new NFT main sales as well as a secondary marketplace for continuous sales. The Solana-based marketplace now controls 90% or more of Solana’s total NFT market share. Zhao stated that the goal is to make it easier for game developers to enter the Web3 ecosystem.
“Developers can focus on one thing that they know how to do, which is to build great games,” he explained. “We’ll help them to take care of all the Web3 elements and to help them onboard into the ecosystem.”
Zhao stated that Magic Ventures has already made some investments and that more are on the way, but he did not specify which projects or startups were involved.
He also stated that there is no set amount of money that would be invested across projects and that the normal investment size is “very minimal” considering the strategic aspect.
“We’re not here to fund the entire development [of games]” he said. “Our value-add is not capital—it’s all of these infrastructure solutions and an NFT experience that no one else in the market can provide.”
Web3 meets game developers
In addition to the venture arm, Magic Eden’s Eden Games business announced deals with the creators of various Solana games, including Aurory, Mini Royale: Nations, and Genopets, to power in-game NFT marketplaces for each. When the game is released, users will be able to buy and trade NFTs without having to go to an external marketplace.
It’s intended to be a simple process for gamers, especially those who are unfamiliar with crypto wallets and self-custody assets. According to Zhao, the infrastructure is offered to developers so that they do not have to design integrations from the ground up.
NFTs are blockchain tokens that reflect ownership of a physical object, such as artwork, collectibles, or interactive video game elements. NFTs can represent things like unique weapon designs, character avatars, and customisable virtual land plots in the gaming realm.
As previously stated, Magic Eden recently became a crypto unicorn with a valuation of more than $1 billion. Only nine months after its founding, the startup secured $130 million at a $1.6 billion valuation last month.
Beyond Solana, the NFT marketplace intends to support additional blockchain platforms in the future, however no particular chains have been identified.
Magic Eden competes in the NFT
Magic Eden’s growing emphasis on Web3 games pits it squarely against Fractal, a gaming-centric Solana NFT marketplace co-founded by Justin Kan, also co-founder of video game streaming network Twitch.
Magic Eden also accepts profile images and other forms of NFT assets, whereas Fractal only supports interactive gaming materials.
Zhao stated that both Magic Eden and Fractal are committed to expanding the Web3 gaming market, but that he believes Magic Eden offers a more comprehensive set of options for launching and supporting Solana-based games—and that the results back up his belief.