Wagner James Au / New World Notes

Headscratcher of the day:

The Sandbox, a platform that allows users to trade and monetize virtual assets in the Ethereum blockchain, is considering raising fresh funds at a valuation of more than $4 billion, according to people familiar with the matter. The company is looking to raise about $400 million from both new and existing investors, the people said, who asked not to be identified as the information is confidential. Sandbox, which is majority-owned by blockchain gaming developer Animoca Brands Corp., is in talks with potential investors for the funding round, the people said.

Which is a wildly high valuation! To put that number in context, Sony recently acquired Bungie Studios, creator of the massive Halo and Destiny franchises, with a customer/player base in the tens of millions, for $3.6 billion. 

By contrast, consider The Sandbox:

• Last November, it reported only having 30,000 monthly active users. UPDATE: This month (April 2022), it reported 300K MAU — see this follow-up post.
• According to SimilarWeb, the official website currently gets just under 9 million monthly visits, which probably translates into unique visitors in the mid to high six figures exploring its online Marketplace, Map, etc. Second Life's official site, by comparison, now gets just under 11 million monthly visits, mainly from its 600,000 monthly active users.
•  According to CryptoSlam, its NFT offerings attracted less than 2500 unique buyers, down from a high last December of… fewer than 7000 unique buyers.

Having played The Sandbox (that's me above, in a suit of course), I'm not surprised by the low monthly active user rate: It requires a very heavy download client and long loading process — even on my gamer laptop — and while the voxel graphics are pretty nice for that aesthetic, they don't stand out in comparison to Minecraft or other voxel-based platforms. And while the intentional abstraction of the voxels is charming and can make the gameplay creation experience feel more personal (as Minecraft's creator told me way back in the day), it's hard to see a massive and growing marketplace for content which looks like that without a large community that's embraced it.

So unless I'm missing something (and that's quite possible!), the valuation is mainly based on NFT speculation. (Which, again, has very few buyers, even by NFT standards.)