Might & Magic creator raises $7.5M for original blockchain games

Digital Insight Games has raised $7.5 million to make original blockchain games. It is being led by Jon Van Caneghem, the creator of Might & Magic and the Heroes of Might & Magic.

Hivemind Capital and Griffin Gaming Partners led the investment in the Los Angeles company, which was cofounded by former Tencent exec Jack Sheng. Sheng and Van Caneghem are serving as co-CEOs.

They aren’t saying what they’re making yet, but Van Caneghem said that they hope to be a pioneer of web 3 and blockchain technology used in fun and original games.

Other investors include The Hunt Technology Ventures, RSE Ventures, and Signum Growth Investments.

In an interview, Van Caneghem said he was pleased that DIG is partnering with experienced investors who believe the web 3 vision will be key for the next generation of gaming. I asked him what he thought of the hardcore gamer resistance in the West to blockchain games, which players view as crappy, scammy, and environmentally wasteful.

Van Caneghem acknowledges that many people are upset about NFTs because the initial games were “financially focused, where it was all about how you make money on a per hour basis.”

Rather than promise you’ll make a lot of money, he thinks that more down-to-earth pitches are in order, like comparing digital item ownership to selling your used games back to GameStop when you were done playing them so you could have money for the next game.

“In the World of Warcraft days, players had to do that under the table,” he said. “I think blockchain is a positive for the player community and the consumers in the long run, as opposed to it being you have to spend $50,000 to play this game. Back with mobile games, things were terrible. It took a while for the game community to figure out a good mechanic. And today, people put thousands of dollars into Fortnite skins and nobody thinks twice about it.”

Van Caneghem said he studied blockchain games for a while and believes that people will be able to build high-quality blockchain games so long as they remember all of the lessons of quality game design. He said the resistance to blockchain games reminds him of the early days of free to play, which came to dominate the game business.

“This whole transition to digital asset ownership and blockchain gaming is so exciting,” he said. “It’s a similar kind of transformation when we went from regular games to free to play. Back then, the industry was completely against it, where people said you’re going to ruin the industry. And now it turns out because of free-to-play we have 10 times the number of players and all sorts of new giant, fantastic companies and games to play.”

The founders worked together before, most recently at Tencent leading North American research and development studios and international partnerships and investments.

“Innovation and gameplay have always been my focus in game development, and now with digital asset ownership becoming accessible to all, the time has finally come to create games that empower players to own, buy, sell, trade, collect, and have control of their digital assets,” he said.

In gaming, Van Caneghem is best known as the creator of Might and Magic and the Heroes of Might and Magic series, and that has earned him Hall of Fame status.

Big ambitions

In a statement, Sheng said, “The business models of video game companies are once again about to change in a major way over the next several years, with real-world economies set to merge with the in-game digital economy. DIG aims to stay ahead of the curve while staying laser-focused on the underlying fundamental/intrinsic value for the community, which is creating a fun and enjoyable web 3 gaming experience.”

My Warzone partner offered a quote about the Digital Insight Games team.

“We are thrilled to be partnering with JVC and Jack on their vision to create the next generation of engaging triple-A games, powered by bleeding-edge Web3 technologies,” said Anthony Palma, partner at Griffin Gaming Partners, in a statement. “They and their team of gaming industry veterans have unparalleled experience building both great studios and great games, and we are excited to help drive them forward.”

The company aims to build the world’s premier web 3 triple-A metaverse experience, with a user-friendly tech platform for in-game digital economies utilizing blockchain technology and NFTs.

The company is pioneering a games-as-a-service (GaaS) 2.0 roadmap, and it aims to be an industry leader across free-to-play 2.0, GaaS/live service 2.0, online marketplaces, and NFT/blockchain gaming.

Van Caneghem said he has about a dozen people on board. The team includes veterans from companies such as Take-Two (Jon Horsley, chief development officer), NX3 Games (Won Chung, chief operating officer), Crystal Dynamics (Eric Lindstrom, creative director), and Electronic Arts (Jay Lee, chief technology officer).

Members of the broader team have worked on renowned franchises such as Call of Duty, Tomb Raider, Command and Conquer, Rock Band, Borderlands, and more. The team is spread out across locations in Vancouver (Canada), Los Angeles, San Francisco, Austin, and New York. And it’s hiring. For inquiries, send a message to [email protected]

A long career

Van Caneghem has been involved in a lot of game companies, starting with New World Computing, where he created the Might & Magic and Heroes of Might & Magic Games. He was around 20 when he started that. He sold that company to 3DO in 1996, and I crossed paths with him as he started Trion Worlds, which made ambitious massively multiplayer online games like Rift.

“I was proud of the games that we made like Rift,” he said.

He also ran studios building free-to-play games for Electronic Arts, and then went on to build mobile games for Tencent, where he met Sheng.

While he enjoyed the Tencent work, Van Caneghem said he has more freedom to explore innovations like blockchain and NFTs at a startup.

“For all the years I made games, everyone wanted to own the characters and their items,” Van Caneghem said.

Van Caneghem has always viewed games as a hobby.

“If you have a hobby. Why would you stop people from spending more than 15 bucks or 50 bucks, right? If I told someone playing golf you’re only allowed to spend $50, you would be unhappy because that is what you do all day long,” he said.

He added, “I noticed when games became people’s lives, they were on all day playing with their friends or family, they wanted avenues to spend, do more things and have more items, and whatever it was — skins or characters or whatever — there was an avenue for people wanting more. And we as publishers weren’t really providing it to them.”

As free-to-play games took off in Asia, Van Caneghem tried to get his former companies to embrace it, with limited success.

“I’ve always been a you know, looking at when the big trends change. And as a game designer, as well as an entrepreneur, those are the exciting times to me,” he said. “And now I’m looking at blockchain and digital ownership. In the past, players have had no way to really legally or safely trade and sell this stuff among each other. So I think that’s a huge positive. And then I look at blockchain and smart contracts, I’m just so excited to see we come up with game design wise to take advantage of all this.”

Van Caneghem believes that those who believe in user-generated content will benefit from blockchain games and figure out new ways to let players express their creativity.

“I play a lot of these survival games and a lot of these crafting games, and it just amazes me the thousands of hours some people spend on these beautiful creations,” Van Caneghem said. “Now you’re constantly working with the community. And I think this also really enables players to be part of the future development of game as well.”

Van Caneghem acknowledges that many people are upset about NFTs because the initial games were “financially focused, where it was all about how you make money on a per hour basis.”

Rather than promise you’ll make a lot of money, he thinks that more down-to-earth pitches are in order, like comparing digital item ownership to selling your used games back to GameStop when you were done playing them so you could have money for the next game.

“In the World of Warcraft days, players had to do that under the table,” he said. “I think blockchain is a positive for the player community and the consumers in the long run, as opposed to it being you have to spend $50,000 to play this game. Back with mobile games, things were terrible. It took a while for the game community to figure out a good mechanic. And today, people put thousands of dollars into Fortnite skins and nobody thinks twice about it.”

Over time, competition will lead to better blockchain games. If we have two quality games in the market, and one offers the ability to own your own things and the other doesn’t, it will be easy to see which gets more adoption, he said.

“Maybe some of the bigger publishers aren’t going to want to adopt it because it is taking money off the top from them,” he said. “But players are going to trade between themselves. And that’s revenue that the company may have captured by selling everything one way to players. But that’s going to be disrupted as the new paradigm comes along.”