Autoverse Studios raises $8M for Auto Legends drag-racing Web3 game

Autoverse Studios has raised $8 million to develop its social drag-racing Web3 game Auto Legends.

Auto Legends aims to capture the real-life car enthusiast journey where multiple paths are available to becoming an automotive legend, from racing, collecting, team ownership, hosting tournaments, providing tuning services, building and selling parts, running car dealerships, and more.

Auto Legends will be a free-to-play game on PC, Mac, iOS, and Android. But players can opt to take advantage of Web3 features on the web if they want to get more depth. The game is available now on PC and Mac in a closed alpha testing environment via the Epic Games Store.

Autoverse Studios is led by executive chairman and former Cie Games founder (Car Town, Racing Rivals), Justin Choice, who brought together his ex-teammates for a run at making another great mobile racing franchise.

The money will be used to complete the building of Auto Legends, with the aim of being the first game that brings Web3 mechanics of ownership and trade to the large global audience of traditional free-to-play gamers.

Joining Choice are Peter Pham, CEO, and Dinko Tontchev, head of product and tech, to “build the next great auto franchise,” Choice said in an interview with GamesBeat. Justin Mir, formerly of Xbox and Ubisoft, joined the company to lead marketing.

“We got the band back together,” said Pham in an interview with GamesBeat.

The three cofounders have reassembled a talented team from Cie Games, Glu Mobile, Riot Games, Xbox, EA, Ubisoft, and Scopely — with a strong pedigree for making racing games. Cie Games’ previous games — Nitto 1320 Legends, Car Town, and Racing Rivals — collectively reached 140 million players and were the No. 1 auto games on their respective platforms.

“When we started Autoverse Studios, we wanted to not only evolve the straight-line racing category, but also revolutionize the games industry as a whole with new social gameplay mechanics, creator support, and enabling players to own and trade their in-game assets,” Pham said. “Players love creating their own parts, trading cars, providing services to each other, hosting tournaments – and we are putting all of that officially into the game. We’re using Web3 technology to do this in a way that is entirely invisible to players.”

White Star Capital led the round with participation from Sfermion, RockawayX, Ocular, Sidedoor Ventures, MCE Group, Saison Capital, and LiquidX. Notable car industry luminaries such as Horacio Pagani, Miller Motorcars, and game industry veterans Niccolo De Masi, former CEO of Glu Mobile (acquired by EA), and Alex Thabet, founder and former CEO of Ludia Games (acquired by Jam City), also joined the round.

“We are very excited to partner with Autoverse Studios,” said Eddie Lee of White Star Capital, in a statement. “This is a team with a previous track record for dominating the straight line racing genre and building multiple No. 1 games in this category. We are excited about their approach to Web3 – one that will not turn off traditional game players and only enhance the player experience instead of getting in the way of it.”

The company will be at Gamescom with Immutable X, and it will hit the aftermarket car show in Las Vegas in November. The company launched its alpha test a few weeks ago on the game store, and it is planning to launch a closed beta, Pham said in an interview with GamesBeat. To join early access, go to the Auto Legends website and register for the beta.

Becoming an Auto Legend

Supporting Auto Legends as the most social, authentic, and competitive vehicle ownership experience are the game’s mechanics in giving players the opportunity to buy cars that are limited in ratio to their real-life production quantities, tuning them with realistic aftermarket parts, showing off their customized rides in social meet-ups, going head-to-head, racing against other players for status and prize money, or even risking the cars themselves in high-stakes “pink slip” races.

With the initial play environment set in Southern California, players race in various formats earning XP (PVE), fan following (PVP), cash, leaderboard status, and rare car parts.

As players progress, they unlock better performance shops, garages to hold their car collection, new areas, environments, and gameplay elements. Growing in rank, players upgrade their car with better parts and add new cars to their garage collection.

While racing is fun, this game isn’t necessarily just about winning races.

“The whole point of the game is actually to become legendary, as we call it Auto Legends,” Choice said. “It’s not about winning or losing. It’s really becoming recognized by other players and by the car companies themselves, which is a big goal if you’re a car enthusiast.”

The game has seven real-life licensed car brands representing over 50 models and trims for players to buy and collect including many car enthusiast tuning favorites. New cars are added at a regular cadence on recommendation from the Auto Legends community.

Choice said, “This game is not about racing. It’s not about who’s got the best record, or any of that. It’s not even about who has the most cars. What this game is about is — the reason why we call it Auto Legends — you could take a bunch of different paths in the game.”

He added, “You could decide to be the best tuner. You’re helping other players get the most horsepower out of their car, because you’re really good at that. You could decide to be the best racer. You can become a team owner. You can decide to even host your own tournaments and become popular because you host the most popular tournaments. But in our game, the ultimate goal is not about winning or losing. It’s really a popularity contest.”

And what kind of popularity? The currency in the game that’s most important is how many followers you get. It’s kind of a form of street cred. And the ones that get the most popular in the game, they become legendary. So the goal of the game is not to just win or lose, but it’s to become recognized as a legend, Choice said.

Taking car competition from one generation to another

Autoverse Studios is an innovative developer and publisher of PC and mobile games. Founded in 2022, Autoverse is headquartered near Los Angeles, California.

Choi reminded me of his past work. Car Town was the 10th-largest app at the time on Facebook, back in the days when Facebook tolerated games on its platform.

In Car Town, you could build a custom garage. Racing Rivals, meanwhile, was a mobile-focused subset of a larger game built in 2004 called 1320 Legends, which itself was preceded by 1320 Challenge in 2001. After the 1320 games, the company created Car Town and then Racing Rivals.

This new game is reminiscent of 1320 Legends, which had its own built-in social network and more functionality that never made it into Racing Rivals.

“It really made an impression on game players,” Choice said. “Our core testers all played that game as kids, and they’re still fans today and they’re helping us with the new game.”

This new game will be the first drag race game that will work in a cross-device fashion, both PC and mobile.

Taking on CSR 2

When Racing Rivals debuted in 2012, it displaced CSR as the No. 1 racing game in the world. Racing Rivals was the No. 1 mobile game for its time. And it was one of the top 25 grossing app globally. Glu Mobile bought Cie Games for $100 million in 2014. EA now owns Glu, and so it’s part of EA Mobile. But Choice left and did other things until he began to study Web3 gaming and his chance to get back into racing games on new platforms.

“We’re hoping to do that again,” Choice said. “CSR 2 is monetizing really well, but it’s eight years old at this point.”

To take on such a big rival, the company is bringing something different. Its strategy includes an emphasis on skill gaming, esports tournaments, Web3 ownership, and lots of detailed car capitalism, from running car wholesale shops to pink-slip racing.

“We’re really going all the way back to our 1520 game, having very authentic tuning, and that means real life parts, not just real life car companies and building the cars,” Choice said. “There’s a real engine, physics engine, and a big part of the game is the treasure hunt and puzzle of putting all the right parts together to get the right performance out of the car.”

Cars can be upgraded using real, officially licensed, parts from over 20 brands and manufacturers. The tuning part is Auto Legends’ form of user-generated content.

“By contrast, most games are upgrade level one, level two, level three. A huge part of our game is spent time spent trying to tune the car. The other thing that we’ll show you here is that there’s a big esports experience,” Choice said.

Auto Legends will also have “pink-slip racing,” which CSR 2 doesn’t have. That’s where you enter your car in a race and if you lose you have to turn over the pink slip, ownership of the car, to the winner, Choice said.

Player skill

You can also have tournaments, including team-based tournaments. These tournaments can have prizes. Then there is a creator economy, where players find ways to make additions to the game and then sell them to other players.

“That’s a big part of the Web3 ethos — the ability to actually monetize your activities in the game. And that’s something that we saw in our prior games, and it’s why we got really excited by Web3. We saw the ability to actually formally put that in the game,” Choice said.

The game brings together the intersections of Web3, skill gaming and free to play, Choice said. Typically, Web3 games haven’t been fun. But if you pay attention to the skill part and making the game accessible, then the game can be more fun. The game has to have gameplay depth. People can also earn money or win prizes or wager against other players, Choice said.

“There are not a lot of games that are skill gaming — meaning you could win from other players — that are really super fun,” Choice said. “The Web3 piece is important as you earn from other players in the game and win prizes. Web3 gives you an offramp to turn that back into U.S. currency. I could lose my assets to other players, and because they’re NFTs, you can sell those assets in game in an in-game marketplace and in third party marketplaces. So in effect, you’re playing for things that have real money value, which is why we need to embrace the skill gaming piece to comply with the laws.”

In most U.S. states, skill gaming is legal and not considered a form of gambling. If a game has random outcomes, then it’s considered gambling.

Players can watch races from a spectator environment, socialize verbally, share sentiment through emotes, and pick their favorite driver to win in high stakes races. They can place wagers, since the game is based on skill.

The company has also figured out that if it adds wagering, the gameplay becomes more compelling as the stakes are higher. Because the game is based on skill, that wagering can be legal in something like 41 states in the U.S. Tuning the car so that it is competitive will be difficult. And reacting to the timer also takes skill. Tuning the vehicle will be way more complex than other games.

From virtual to real life

The car companies can get involved because they see a potential big revenue stream in exchange for a license.

“The car companies are collaborating with us to recognize players in an official and real-life capacity. So just as an example, if you own, like the most Mazdas in the game, and we recognize you as being legendary for that, we will actually invite you. There’s a private museum that no one knows about that Mazda has where we will invite you. You can come out and actually visit it in real life.”

The company could send a signed letter from the company CEO, just like high-end customers receive in real life. Players can showcase customization skills and hang out with the community in a true car enthusiast’s social network, represented in the game as a “car meet-up” and replicating real-life habits in car culture.

“We can do things like give away a real life car for a virtual tournament,” Choice said. “That’s what’s going to be unique. It’s not about winning or losing. It’s really about being recognized as a legend. And we’re going to bring in both virtual and in-real-life recognition in the game.”

In a garage, there are tons of details. There’s a true inventory, and everything has a VIN. And in the blockchain, the company can store everything that you would see in a CarFax in real life, Choice said. You can see the ownership history. You can paint the car and have a record of the original paint color.

The parts on the car are real, from the wheels to the turbos to the spark plugs. Each one can be recorded onto the blockchain, and the rare parts can be NFTs. You can race the car and you may have to replace the parts.

The vendors can be a mix of bots or real players. You can also buy a business license from Autoverse Studios and then open a shop in the game. You can become part of the car culture in a social way, interacting with the other players.

The game will be easy to get into but difficult to master. So the gameplay mechanic is similar to Racing Rivals, where your reaction time in shifting or hitting the nitrous button makes a difference. There are different length tracks and it takes skill to master them. If you have traction but not enough power, it will make a difference in the outcome.

Why Web3?

Choice said that he researched blockchain gaming a few years ago and it seemed like a bunch of like hype and B.S. to him. But then, as he applied it to gaming, the light bulb went off, Choice said.

“I saw how if Web3 existed when we built our last game, it would have solved some challenges that we had with player trading,” Choice said. “We couldn’t really support that. People were using the vehicle to create stuff for other players to provide services to other players. It was an economy around the game that we could support. I saw how this actually had real utility.”

People had bad experiences with NFTs, particularly those that were sold ahead of a game being created.

“There’s a lot of hyped b.s. out there. If you look deeply enough, I think the things that we’re doing really point for way to where the game industry will end up going,” Choice said. “There is an interesting question of how car companies, outside of gaming, are thinking about NFTs.”

The big missing piece so far in Web3 gaming has always been creating a fun game, Choice said.

“With cars, people get the concept. People understand that a Lamborghini is worth more than a Volkswagen, and they understand that a certain Volkswagen is very rare, even though Volkswagens are common. We’re not really having to educate people about cars. We believe have the most crossover of any category between Web3 and Web2 people. Crypto bros make a lot of money on crypto tend to go out and buy Lambos. We have IP, that crosses over both audiences.”

A new way to do user acquisition

One thing that Autoverse Studios has figured out is a new way to do user acquisition. Typically, mobile game companies working on free-to-play games had to raise a funding round for user acquisition because it has gotten so expensive to market and find new users. It’s a heavy burden.

But Autoverse’s solution works like this. 

“We’re going to allow people to have a wholesale car license. And we’ll let them buy cars and actually make the margin just like real life. So for us, it’s like a funding mechanism,” Choice said. “Someone willing to give us half a million dollars, we’ll happily use that for user acquisition. And then most people will buy cars from this person. And they’ll make a 1% markup just like in real life. So there’s a Web3 solution where they’re really car capitalists.”

Choice added, “It’s a non-dilutive way for players to invest in the success of the game, and provide the user acquisition budget. I don’t think a lot of people have thought about it that way.”

It adds an element of “car capitalism” to a game which is what many people do in real life. These can be dealers or wholesalers.

“Not everyone will do it. But we believe it will appeal to a lot of Web3 people, and we actually believe it will appeal to a lot of Web2 people. It’s just a different way to play the game, to own things in advance. People become very enterprising and they make money off the other players.”