Mechanism Capital Lastest to Launch $100m Blockchain Gaming Fund

Mechanism's blockchain gaming fund is encouraging, but there are far more interesting threads to pull at beneath the $100m headline.

“We want to back games that people want to play regardless of the crypto incentives,” said Marc Weinstein, Head of Platforms at Mechanism Capital. This has been our battle cry since 2018: make blockchain games that people want to play even if they have no interest in crypto. That is the benchmark developers ought to be aiming for, and Weinstein’s words aren’t far from that philosophy.

So, what is Mechanism Capital?

Mechanism Capital and Its Crypto Gaming Thesis

Mechanism Capital is an investment firm. I first became aware of them late last year when I saw someone reference a thesis they wrote: The Financialization of Fun: Crypto Gaming Thesis by Eva Wu. As someone with a background in academia and philosophy, I was elated to see both a paper on blockchain gaming and a reference to Mimetic theory. Once I’d settled down from patting myself on the back, I found a lot of astute observations in this work.

One of the key takeaways for me is an area I’ve discussed a lot, both in articles and on the WAX Lyrical podcast. That is, there appears to be an obvious split in blockchain game development, with half aiming to create a great game and using blockchain to do so, and half aiming to make DeFi look more like a game.

Blockchain’s role in gaming has never been in doubt for me; it’s inevitable by virtue of the number of problems it solves. The pace at which investment firms are seeing this and taking note is increasing exponentially. The evidence of this is abundant, but I’ll role out my bite-size statistic as proof: In 2020, $80m was invested in blockchain gaming. In 2021, over $4 billion was invested in blockchain gaming.

Mechanism Capital originally had a focus on DeFi, but noticing blockchain gaming’s lengthy bull run and signs of decoupling from cryptocurrencies, they have now set up Mechanism Play, a $100 million fund for Play to Earn (P2E) gaming. This is interesting in and of itself, though investment in the space is now plentiful. What is more interesting is who they hired as part of this project.

Steve Cho, Mobile Play to Earn, and Developer Agility

In yesterday’s announcement about mobile gaming publisher, FGL, partnering with the WAX blockchain, I discussed the unexpected trend within the mainstream adoption of blockchain in gaming: mobile. That is, mobile developers are rushing towards P2E where many PC and console game development, particularly from established studios, are tentative.

Well, Mechanism’s $100m fund has another strand to it in the form of Steve Cho, a senior employee of Apple who was working on Apple’s relationship with NFTs and blockchain. I’m pleased for Cho and Mechanism, but Apple is still acting as a gatekeeper with its App Store, so it’s a shame he didn’t stay a little longer!

Closing Thoughts

On the face of it, the story is another feather in the cap of blockchain gaming’s near future. It is another sizeable investment fund to aid blockchain gaming, but there’s a reoccurring theme in the form of mobile games. Current P2E games are undoubtedly a strong fit for mobile platforms, but they are somewhat at odds with Weinstein’s words quoted at the beginning of this article. They don’t have to be at odds; brilliant mobile games are certainly possible. But, I imagine it will be difficult to swim against the revenue current of gamified DeFi.

Lead image by NeONBRAND via Unsplash
Robert Baggs
Robert Baggs
Full-time professional crypto writer and Editor of Token Gamer. Co-host of the Mint One Podcast. Obsessed with MMOs. London based. Primary holdings: WAXP, ENJ, & BTC. Secondary holdings: ETH, GALA, & MATIC

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