$86.9M? Shrapnel’s budget could bankroll hundreds of Onchain Heroes

GAMING CHRONICLES 114

Raiden

and

Memento | Oscar

Apr 09, 2025

Gaming Chronicles focuses on curating the latest web3 gaming news every week.

You will find the latest news, educational content, and game reviews.

TLDR :

Treasure departs from gaming
Ultra announced a $12M raise
Shrapnel, the Bamboozler

🗞️ NEWS

TREASURE DEPARTS FROM GAMING

Treasure shared a “pivotal transition” in a surprise announcement last week. A much-needed pivot when looking at the numbers (more on this in a bit)…
- Part of the transition is a complete pivot away from gaming. Treasure is killing its gaming publisher platform and blockchain, pulled its grants, and has laid off all the staff in this area to operate leaner
  - Zero gaming support remains; that’s why one of its largest games, The Beacon, announced it is parting ways, plus I expect every other game to leave Treasure soon for chains such as Arbitrum, Ronin, and Abstract
    - Again, we’re seeing more consolidation towards the top gaming chains
- Treasure’s new focus seems to be AI (e.g., Smolverse) and DeFi (its roots)
The company’s burn rate was $9M+, with over 40 FTEs (seemingly all American-based), and it only had a couple of months of runway left
- Makes me question the decision-making from leadership. These things don’t happen overnight
Kate Irwin (from Blockworks) went deeper into the numbers of Treasure:
- Total Q4 revenue: $40,181
- Total Q4 expenses: $11,319,185 (largely spent on salaries)
- New changes extend the company’s runway from July 2025 to ~Q1 2026
For now, Treasure’s in-house game studio, Darkbright, seems to be unaffected. The studio raised $6M in a Seed round led by BITKRAFT to develop Smolbound (announced September 2024)
Overall, it’s sad to see a gaming-focused ecosystem fall apart. On the other hand, we should at least be somewhat critical here of how bloated some of these companies have become, without PMF

ULTRA RAISES $12M

Ultra announced it raised $12M in a funding round led by NOIA Capital through its NOIA Digital Asset fund to build out its “next-gen gaming platform”
Recently, the company appointed a new CEO, who commented on the raise:
- “…we have ambitious plans to break the mold of the traditional game development and distribution cycle and push the boundaries of player experience and ownership”
The funds will be used to hire new staff, expand and upgrade the platform, prepare for strategic acquisitions, and “lay the foundation for a larger raise planned later this year”
More on the platform itself, it features a wallet service, game store, marketplace, tournament applications, and users can purchase and sell games, services, and digital items
- The native token (UOS) can be earned through participating in beta tests, advertising, game curation, referrals, and reselling their games
- It sounds like the “Web3 Steam” pitch to me, which we have seen plenty of examples of, including REACH, Hyperplay, Elixir, etc., without any notable success yet
  - Whilst the idea of acquiring users with incentives instead of marketing has a ton of potential, it remains to be solved
  - Maybe the issues with these platforms are that they try to run the reverse Steam playbook (platform → games, instead of flagship game → platform). So, I’d be curious about Ultra’s game acquisition plans to bootstrap players on their platform
Despite my doubts about the business model (for now), Ultra has been around for 6+ years, and this is its first round since its ICO in 2019
- This was during the ICO-era btw, so they managed to raise $11.4M. This is how they stayed afloat

SHRAPNEL, THE BAMBOOZLER

Treasure seems a saint compared to what Shrapnel managed to pull off. Kate Irwin was on a roll this week with her piece on Neon Machine
- Last week, we covered Shrapnel’s “buyout” by the Chinese government. This week, we learned why it came to this in the first place
The investigation from Blockworks includes a lot of head-scratching numbers:
- Shrapnel’s burn rate was up $2 - $3.5M a month. This is similar to the burn rate of studios making actual AAA games in Web2
- The company had a total operating expenses burn of $86.9M. Yet, the game doesn’t seem to be close to completion, and it remains to be seen whether it will have a global launch
- They tried to raise an extra round earlier this year, however, these efforts failed
- Financial docs reveal Shrapnel made $21.7M in services revenue in 2024, however, spent $33M in operating expenses. The company has lost money every year since 2021
- The company is predicted to have a deficit of $13.5M by the end of this year
- SHRAP is down 98% from its ATH. And the former co-founder and ex-studio head, Don Norbury, sold ~$672,000 worth of the token since September
- Neon Machine is expected to pay $4.25M in cash and receive 150M in SHRAP to 4D, after settling their lawsuit in 2024
No wonder so many key figures left the company in the past year or so, plus the many rounds of layoffs, and the continued failure to deliver upon deadlines
- Despite the impressive backgrounds of Shrapnel’s founders, these shenanigans seem incredibly incompetent