Immutable provides a blockchain infrastructure that transforms digital asset - also know as an NFT (non-fungible token) - ownership in the video-gaming industry (Reference: Crunchbase, Immutable). It was founded in June 2018 and is based in Sydney, Australia by brothers James and Robbie Ferguson.
The company was originally named “Fuel Games” and is a gaming and digital asset technology business, with a focus on gaming on blockchain, and trade of NFTs (non-fungible tokens) (Reference: Smart Company, Gaming startup Immutable scores $82 million for NFT trading tech).
Immutable is funded by venture capital and recently completed its Series B round in September 2021, securing $82 million in funding (Reference: Smart Company).
Investors include:
- BITKRAFT Ventures, a specialist gaming and e-sports investor
- King River Capital
- AirTree Ventures
- Reinventure
- Prosus Ventures
- Galaxy Interactive
- Fabric Ventures
- FTX
- Apex Capital
- VaynerFund
(Reference: Smart Company)
Immutable aims to solve some problems which currently exist in the NFT landscape. These issues relate to NFT trading occurring on the Ethereum blockchain. They include include low scalability, issues with user experience, the expense of trading NFTs, slow developer experience, illiquidity issues and that “the only existing scaling solutions compromise on the most important thing — the security and user-base of Ethereum”, per co-founder Robbie Ferguson (References: Immutable X Whitepaper and Smart Company)
Robbie Ferguson stated that the idea behind Immutable is that “We want businesses to create their game, marketplace, or NFT application within hours via APIs, with a mainstream user experience. No blockchain programming required.” (Reference: Smart Company).
Immutable appears to be targeting those in the gaming space. As stated in its Whitepaper “gaming is currently one of the key targets of NFT developers, and for good reason: gamers are tech savvy early adopters, and gaming is big business” (Reference: Immutable X Whitepaper). Its recent partnership with GameStop is an important step in that direction, which has garnered some attention (Reference: The Block Crypto, GameStop to launch NFT marketplace with Ethereum Layer 2 Immutable X).
NFTs hit the mainstream in March 2021, after the New York Times reporting on the sale of Beeple’s “First 5000 Days” NFT at Christies for $69 million USD (Reference: New York Times, JPG File Sells for $69 Million, as 'NFT Mania' Gathers Pace). A unique advantage of Immutable’s founders is their experience in the industry. As noted by John Henderson, partner at AirTree Ventures, the founders of Immutable have been working in NFT tech games for years (Reference: Smart Company). Being in the space since 2018, when NFTs were unheard of, gives them a market advantage.
Immutable also uses a variety of technological tools to ensure that NFT projects built on its platform delivers fantastic user and developer experience, which is a core problem it has identified in the space.
Immutable is a Layer 2 scaling solution for NFTs built on the Ethereum blockchain (Reference: Immutable X Whitepaper). Immutable has its own token (IMX) which is also built on Ethereum, which can be used inside the Immutable network. Users can earn IMX tokes, “by conducting pro-network activities such as trading, and which can be used to pay fees, perform governance or stake on the protocol” (Reference: Immutable X Whitepaper).
Immutable operates within the Blockchain domain of the FinTech sector (Reference: KPMG, Australian FinTech Landscape), specifically in the newly growing space of Non-Fungible Tokens (NFTs), and NFT gaming.
As stated above, NFTs exploded into the mainstream with the New York Times article about Beeple’s $69 million USD Christie’s sale in March 2021.
Interest in NFTs exploded dramatically in the first half of 2021. In the first half 2020, there was only $13.7 million in NFT sales. In the first half of 2021, this jumped to $2.5 billion (Reference: Reuters, NFT sales volume surges to $2.5 bln in 2021 first half). Major brands who utilised NFTs in 2021 ranged from Asics to NFL to Gucci (Reference: Business Chief, Top 10 NFT marketing initiatives by leading brands in 2021).
Ethereum, being the dominant NFT blockchain, now has a market cap of $380 billion, up from only $14 billion two years ago (Reference: Coin Market Cap).
According to Immutable’s Whitepaper,
“Gaming is currently a USD 300 billion industry and is expected to grow roughly 10% a year between 2021 and 20252, making it larger than the sports, movie and music industries combined. Since 2018, players have spent more than USD 100 billion on in-game assets, such as unique character skins, items and exclusive unlockable content.”
(Reference: Immutable X Whitepaper), page 3, referencing: Global video game market value from 2020-2025 and Global gaming industry value now exceeds $300 billion…)
Other major companies in the NFT gaming space in Australia include:
- Zed Run, a blockchain-powered digital horse racing startup
- Illuvium, an open-world adventure role-playing video game (RPG) created by brothers Kieran, Aaron and Grant Warwick
- Crypto Gaming United, which lends NFTs to blockchain gamers in developing countries to help them level up their skills, and remove barriers to entry in the crypto gaming space
(Reference: SMH, Australian startups make waves in the booming world of gaming NFTs).
Popular NFT gaming platforms include:
- Axie Infinity
- Decentraland
- CryptoKitties
- SandBox
- Aliens World
(Reference: FineExtra, Top NFT gaming platforms to Play and Earn in 2022!)
According to Immutable’s Whitepaper, the Project “is in beta stage, which means that the Project and all related software are experimental.” (Reference: Immutable X Whitepaper, page 14).
Immutable published an update via Medium on the projects on Immutable X, as at November 2021. This includes:
- more than 90 projects launched on Immutable X and
- nearly $50M USD traded in community projects, since releasing access to the community in September 2021.
Popular projects on the platform include:
- Gods Unchained: an online strategy trading card game based on the play-to-earn model
- Battle Catz: an initiative that leverages digital art sales to help the cause of various charities involved with helping big cats
- Mantial: developed a self-serve SaaS platform in August 2021 that enables companies and entrepreneurs to launch their NFT collections without code and within minutes
A core metric for success is amount of dollars traded on the Immutable NFT platform month by month. Immutable does not currently release this data (other than its announcement on Medium, as above).
Another metric is the performance of the IMX token, which has currently taken a hit in line with the overall decrease in cryptocurrency values this quarter.
The weight of who Immutable X partners with is also a metric for success. Recently it was announced that “Video game retailing giant GameStop has partnered with…Immutable X to launch its own NFT marketplace” (Reference: The Block Crypto). Engaging with well known projects and partners will assist in Immutable’s future growth and success.
Immutable’s top competitors in the space are unclear, as they are the first company to deliver this solution with both developers and users in mind.
As Immutable touts itself as a user friendly platform, increased user education is recommended to increase both usability and accessibility to Immutable X and its projects, and wider adoption of their technologies. Short educational videos on Youtube for example, may be an easy way to deliver this.
As this is a very new solution utilising new technologies, it is hard to pinpoint a need for further technological innovation by Immutable. But as one of its key points of market difference is usability, education of its users is important for increased and ongoing ease of use of its platform. Education can also increase adoption of the platform by helping those who are new to the space to understand its projects and their utility and unique use cases.