The 34-year-old left TikTok last month after two years with the company, and his departure comes as TikTok and its Chinese owner ByteDance have aggressively expanded into the $300 billion dollar global gaming market to take on rival Tencent Holdings, an effort that has yielded mixed results so far.
It also reflects the growing interest of entrepreneurs and investors in blockchain games – a new generation of online games built on blockchains that allow players to trade items in the form of non-fungible tokens (NFTs).
Fung, whose new venture is called Meta0, said he left TikTok after seeing an opportunity to provide a solution to the current segregated nature of infrastructure options available to developers looking to build blockchain games.
“Right now, if you look at a developer when they implement NFTs or blockchain in their games, they have to choose a single blockchain, be it Polygon or Solana or Binance Smart Chain. But imagine a more interoperable option,” he told Reuters in Hong Kong, citing popular existing blockchains.
“So we decided, let’s do it. Let’s co-found this company. Let’s give up my quiet business life at TikTok and take a huge risk,” said Fung, who was based in Shenzhen and reported to TikTok’s chief operating officer. officer Vanessa Pappas .
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Meta0’s founding team consists of six members in addition to the two co-founders, and the company has closed an initial round of funding, Fung said.
He declined to disclose details about the other co-founder, the rest of the team, or the investment. He said the company wanted to raise money by issuing tokens, as well as from venture capitalists and strategic investors.
Big names stay away
Proponents of blockchain games say they will disrupt the game industry as cryptocurrencies can make virtual items more tradable and even distribute ownership of games to players. But blockchain games are also sometimes associated with scams, and the virtual economy of some games collapsed shortly after players bought in.
Most established game companies like Tencent, Sony and Microsoft have yet to place big bets on blockchain games.
Fung, as TikTok’s global head of gaming strategy and operations, was tasked with expanding the game’s content and testing new features, such as hosting mini-games on the app.
TikTok and ByteDance aggressively expanded into gaming during Fung’s tenure, with ByteDance’s acquisitions including a $4 billion purchase of gaming studio Moonton, and TikTok trying out mini-game features on its app.
The efforts have seen both successes and setbacks. Last month, data tracking company Sensor Tower said ByteDance’s mobile game portfolio had generated more than $1 billion in revenue worldwide in the past 12 months.
However, ByteDance also dissolved its Shanghai-based 101 Studio last month, laying off half of its more than 300 employees. 101 Studio, a product of the 2019 Mokun Technology acquisition, was the first development unit to shut down ByteDance as it struggled to perform.
Fung, who led the esports units in Alibaba Group Holding and Electronic Arts in Asia before joining TikTok, declined to comment on who could replace him on TikTok.
TikTok did not immediately respond to a request for comment.
Blockchain games a popular investment trend
Despite the wariness of some in the industry, blockchain games have become one of the hottest investment trends discussed by crypto tycoons from Silicon Valley to Dubai.
Prior to the recent crypto market collapse, the blockchain gaming industry had raised a record $1.2 billion in the first quarter, according to a report by investment banking firm Drake Star Partners in April. Last year, a total of $3.6 billion was raised for the sector.
“We’ve built a protocol for game developers and we’re taking a flexible, blockchain-agnostic approach to their game development,” Fung said, discussing the future prospects for blockchain gaming.
“With a protocol we are developing, developers can easily build their game leveraging strengths from different blockchains and give the user the flexibility to transfer their NFTs cross-chain.”