#Illuvi part 1 of 4. Runway financing

1 messages · Page 1 of 1 (latest)

brave valve
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posted on behalf of @vapid sigil

Current general situation in crypto games is quite bad with most studios and their games closing with no refunds. Crypto gaming investors are investors and as such value expected profit and risk. Due to current crypto gaming situation risk has risen considerably and therefore investments in crypto games are reduced.

Illuvium usually has 1 to 2 years runway and show this info publicly. In my opinion this is good but due to current situation I suggest increasing it to 6 - 8 years runway. This means that when it goes down to 6 years runway new financing is needed to rise it again to 8 years runway. This increase from 1-2 to 6-8 doesn't has to be done in one go, but when possible I suggest to increasing it to that level. This money should be kept safe and in a stable value coin.

Pros:

  • If you give info and proof that Illuvium has 6 to 8 years runway crypto games investors will see Illuvium safer for investment and therefore they should invest more. This applies to both ILV coin and all tradeable illuvium items.
  • Illuvium development team that is still needed will know that they can keep their jobs for those years ahead, increasing their safety.
  • For now the studio has always found new investors but nobody knows the future. If worse times comes where it's impossible to get financing, with 6 to 8 years runway the game itself will be able to survive an extra 5 more years without running out of money.

Cons:

  • The studio will have to start searching for new financing now or in near future, but in the long run the amount of investment needed is the same regardless when the money is received.
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I agree reducing monthly burn was extremely needed for the survival of the game. It got reduced to 500k and I believe recently got reduced again to 300k. It's good to keep reducing it as much as possible but having a good team for developing a particular game is difficult. It takes time to find people with the skills, get them to know the game, the needs of the game, what they have to do and how to do it. For this reason if the team is good and is going to be needed it's better to keep them than changing them too much. This is just a reminder that a balance between cuts and keeping the right team is needed for efficiency and long term performance.

If we take 500k as the monthly burn, 36M$ to 48M$ are needed for 6 to 8 years runway. For the same runway with 300k burn per month, 21.6M$ to 28.8M$ are needed. There are different ways to get financing. One is startup financing series. Another would be selling more Illuvium zero land. The amount seems like a lot of money to get but we should remember the initial land sale collected 72M$. By that time ILV price was falling and it was a popular choice to use land sale money to give ILV stakers revenue, hoping it would rise the price of ILV. Time told us that ILV price depends on the development stage, player base and game regular monthly profit, not one time event profit. ILV stakers may or may not care about the game, can stay or leave when they think the time is right to end their ILV investment, but game development is always going to stay. 72M$ or even half of it (36M$) was a lot of money for development. We should learn about this to do things better in future.