Infinite Reality, maker of AI-powered immersive experiences such as social sports platforms, has acquired Stakes for $8 million in stock.
The all-stock transaction values Infinite Reality at $3 billion and Stakes at $8 million. It comes on the heels of another acquisition where Infinite Reality acquired Ethereal Engine in a share swap. That deal in February valued Ethereal Engine at $75 million and Infinite Reality at $2.5 billion. Yes, in the course of six weeks, it looks like Infinite Reality’s valuation went up $500 million.
John Acunto, CEO of Infinite Reality, said in an interview with GamesBeat that the latest deal will help Infinite Reality implement its innovative digital experiences and immersive sports offerings. Stakes enables people to do Web3-based sports wagering.
This latest transaction provides yet another multi-billion-dollar valuation benchmark for Infinite Reality following the Ethereal Engine and the December 2023 partnership and equity swap with Greenidge Generation Holdings as well as the proposed December 2022 go-public deal with Newbury Street Acquisition Corporation.
Bypassing the platforms
“We see an amazing team here that really allows us to bring them in and continue to expand and grow the platform,” Acunto said.
With the combination of Ethereal Engine and Stakes, Acunto said that the company now has an alternative game engine to build its experiences. It no longer needs to use the Unity or Unreal game engines for the immersive experiences that it builds, Acunto said.
“We’ve got such world class, awesome engineers here from Zynga, EA and more. These guys are top notch. And they will be able to bring their expertise and bring the technology that they have into our engine,” Acunto said. “It’s a Web3 game engine that competes with Unity, but it’s better in our opinion.”
This engine will enable the company to create immersive experiences that can live on the web, rather than have to be downloaded via an app store to your computer. Such experiences offer much lower friction as they can be operated from just about any device. But the question will be whether they can deliver rich visual experiences that consumers want.
Stakes was founded in 2022 with the mission of creating a global reputation network for sports fans. The platform allows users to compete against friends, rival fans and even professional athletes in sports trivia and prediction challenges, combining gameplay, social and digital collectibles. Stakes has seen strong traction, growing to over two million predictions and trivia questions answered since launch and over 70% month-over-month engagement growth since July 2023.
The addition of the Stakes team, which previously worked at leading gaming companies such as Zynga, Electronic Arts and Wagr (acquired by Yahoo! in 2023), will supercharge iR’s mobile development capabilities, add expertise on audience engagement and help future-proof Infinite Reality for blockchain and Web3 integrations, said Acunto.
Stakes’ previous investors include Angi, Dotdash Meredith, People Magazine and Travel + Leisure owner IAC, New York Mets and Brooklyn Cyclones owner Sterling Select Group and one of the world’s largest blockchain investment firms, FBG Capital.
Acunto said, “This acquisition will bolster Infinite Reality’s mobile development team, bringing in new capabilities for social engagement, gamification and access from any device. The integration of this new platform into our existing immersive offerings helps us deliver on our promise to enterprise partners of being the most engaging way to connect with their audiences.”
Kevin Wang, CEO of Stakes, said in a statement, “As the lines increasingly blur between online and real-
life identities, the world, and especially the younger generations who are native gamers, is craving
more immersive and engaged experiences.”
He added, “At Stakes, we built a platform to bridge someone’s real-life sports fandom into an online identity. Now, with the power of Infinite Reality’s far-reaching and diversified infrastructure, we are able to apply that concept at an even grander scale across sports, commerce, education and almost anything else the Internet is used for today. We are thrilled to be joining such an innovative company that is shaping this next iteration of entertainment.”
Using the immersive web
With Infinite Reality, Acunto said a consumer company can take an existing website and instantly port it into an immersive-ready website on the Infinite Reality engine. That allows them to sell products “face-to-face,” directly with human-to-human interaction with video and AI, he said.
“It really allows them to have a very powerful opportunity to speak to their customers. And so that power is what we’re building for that platform,” Acunto said.
He said a web-based engine lets consumers connect regardless of the hardware they have and without having to agree to give away their data to a platform company which charges a lot of fees.
“This is really about platforms for the future,” he said. “The environment we are going into is real-time immersive spaces that are creating always-on communities and allowing businesses to participate. When you put our platform on top of AI, it’s a different web, a different interaction.”
The “metaverse” word
I asked whether the “metaverse” is really what he wants to build, but he can’t really use that word anymore because it’s unpopular.
“I believe that there are there are steps to build a metaverse and we’re working very hard to do that. I think the first step is you have to let me say this a different way. If you move into a city and all the land is owned, you can’t build a house, unless it’s a leased house that somebody else owns and you can’t have furniture. You’re not really invested in that community because you don’t own land,” he said.
He added, “Building a metaverse is not about having a company own it. While I’m excited that Meta wants to name themselves that way, building a Metaverse just like building the internet. It is about connection. So if you imagine 1996, having AOL change their name to “inter” be short for the internet. That’s insane. Right? We believe that we’re actually fundamentally doing the right thing by building the building blocks that are necessary, which is empowering commerce to happen, where those businesses own their platforms, and own their data and own their clients.”
The goal is to create a direct connection to consumers on the internet.
“When people say the metaverse, when you listen to companies today, their business model and their business plans are all about taking the data of a company and owning all, about taking the customers of companies and owning them. It’s just not possible for any of these titan companies to own the metaverse, or to own immersion or to own AI,” he said. “The people are going to own this, and we want to empower them where they can own the customers, the data and the experiences. We’re not there to steal from them.”
He noted that Infinite Reality saw its opportunity during COVID, when everybody got into a metaverse-like experience using Zoom. They began communicating face-to-face and distance was removed. Now people will be able to meet in a digital space, whether it’s with human faces or digital avatars. Businesses will be able to engage one-on-one with their customers over the web with no middleman, he said.
I asked Acunto what he thought about the European Union’s Digital Markets Act, which prevents “gatekeeper” tech companies like Apple from monopolizing app stores. The act enabled developers to create their own alternative app stores. And Acunto believes that his company can offer a similar benefit, enabling developers to go out on the web to do direct-to-consumer deals with consumers.
“This is where we really see an opportunity for Infinite Reality. So many of these companies are locked into 1990s business models and technology and thinking, and that’s not their fault, right? They’ve built unbelievably huge empires around them. And so their problem is how do you pivot from the old into the new,” he said. “That problem is why you see this constant resurgence of new value being created by companies, Google, and, later Facebook and others who just grew up and left behind the IBMs.”
Going straight to consumers is the right answer, Acunto said.