gm fam,

Happy Monday! Today is a really special Beast Journal for me. I’m sending you the very first Deep Dive of 2024 about a new anime project I’m bullish on: San FranTokyo.

I’ll explain their vision, how they want to revolutionize anime fandom, what the risks are, and why I decided to ape in.

Let’s get to it.

Anime Collectibles Market

If you’ve grown up with anime, you probably heard about MyAnimeList – an anime Wikipedia built in 2004 for people who love anime.

People used to be obsessed with this website — adding their curated watchlists to their Instagram bios to express themselves.

While the UX doesn't really keep up with the times, the database is huge — over 18 million active users. That's 18 million people who love anime and may or may not know anything about web3.

How do we onboard them?

Meet San FranTokyo (SFT)

SFT founders believe that the anime fandom will be the Trojan horse for web3 tech.

If you think about it, anime fans are an online community of digital natives who are chronically online. That doesn't sound too different from web3 already.

The Trojan horse they want to bring to the masses is tokenized anime figurines.

Wait, did you ape in because of figurines rather than NFTs, beast? 

Not really, but to understand what SFT is trying to solve, I want first to show you the bigger picture.

Anime merchandising is valued at $28.68 billion and is expected to double by 2030. To my surprise, figurines are the largest slice of the pie, making up over 38% of all revenues.

But how do we capture this market?

Meet Weebox

Weebox is the flagship store that will exist within the city of San FranTokyo.

It will be a place to access unique anime IP — including those figurines — that the SFT team manages to license from the most iconic web2 and web3 brands.

The team already licensed Ghost in the Shell, Afro Samurai, and Liar Liar from the web2 Japanese manga world.

They also licensed 0N1 Force, made a partnership with Cool Cats, and are in talks with Azuki.

Got it, but where’s the opportunity?

Tokenized Anime Figurines

There are two opportunities for innovation when it comes to buying a premium figurine: addressing the wait time and overcoming the physical limitations.

Wait time

When I bought my BAYC x SUPERPLASTIC figurine of Curtis, it took about 9 months to receive it. It’s not because Yuga was slow — that’s just how the market works.

Premium figurines are typically made to order. You start with the pre-order process. The pre-order window lasts about a month before manufacturing starts. That's usually an 8-10-month turnaround, depending on the size, scale, model, and level of detail.

That’s wild, especially in our fast-paced world with short attention spans.

What can be done differently?

Imagine you pre-order a figurine the same way you did, but the experience doesn’t start 9 months later, but instantly.

You go and get your digital twin that lets you unlock experiences, collect art, cosmetics, get airdrops, use it in a game, trade it, or even borrow money against it. Instantly, not 9 months later.

There’s so much more that can be unlocked throughout the wait time than just simply waiting until the figurine pops up in your mailbox.

This is one opportunity for SFT to tackle.

Physical limitations

Another limitation is the physical nature of figurines.

Once I finally received my Curtis, the experience was over. If Curtis had a digital twin, Yuga could continue to innovate on top of his physical nature.

And that’s where SFT sees the future of premium physical collectibles.

SFT wants to build a digital ecosystem where even if your physical figurine and my physical figurine are the same, they are unique through additional layers of NFTs, whether that's cosmetic, a pose, or anything else attached to them.

Each figurine will use a PBT chip and — through ERC-6551 — have its own wallet.

This could create a dynamic where someone would be willing to pay more for a physical figurine because of the digital collectibles attached to it.

Looking at the $500 Saga Phones being resold for $5,000 shows us it’s not impossible.

The team thinks this extra fandom is a solid way of how to onboard web2.

But can they achieve it?

Meet the Team

San FranTokyo is a subsidiary of Animoca Brands.

The project is led by the CEO of Animoca Brands Japan, Daisuke Iwase, and the duo of co-founders DT and Yeong.

The team includes builders with some big achievements:

The project is well-capitalized — they raised $10.4 million led by Animoca Brands. The round included executives from SoftBank and Dapper Labs.

So what about the NFTs, beast?

Alright, now the fun part.

Visions: the Upcoming PFP Collection

PFP collection called Visions is coming. We're likely only a few weeks away. Here's what we know so far:

2,000 Genesis Passes were minted for free back in August 2023. Every Genesis pass will give you 1 discounted mint and 1 free PFP airdrop/claim.

So holders of the Passes don’t have to do any grind to get their PFP.

The total supply of PFPs hasn’t been announced yet, but Premint currently shows 6,666 - not sure if that’s the alpha.

Genesis Pass holders will receive a PFP based on one of the three tiers of their passes.

My play will be to keep a Genesis Pass, claim a PFP, and try to mint the second discounted one. I expect both collections to become eligible for a token.

Both Genesis Pass and the PFP will give you access to the upcoming limited edition digital and phygital drops, including those figurines. The Passes will give you priority; the higher the tier, the easier it is to get the drop.

Wen Token?

The ecosystem will be powered by a token.

The team previously hinted that the vision goes beyond a single team or company, aiming to encompass a broader ecosystem.

There’s a lot of speculation that SFT will be somehow connected to the $ANIME token revealed by the Weeb3 Foundation, but nothing has been confirmed yet.

So a token is in the game plan!

What Are the Risks?

Every early-stage startup — and especially an NFT project — comes with major risks, and SFT is no different. Here are some of the risks:

• Tokenized figurines are pre-product. While the web3 technology already allows us to unlock digital experiences, it will ultimately be anime fans who decide whether they see value in it.

• Manufacturing. SFT has secured partnerships, yet it will likely take several drops to master the manufacturing process. To keep the turnaround lower than the current 10 months and ensure high quality while being cost-efficient, the team can expect a lot of learning lessons to master the production flow and logistics.

• Oversupply of digital assets. We saw this in the past with RECUR, which raised $50 million at an astonishing $333 million valuation and shut down its operations less than two years later. The platform spent millions of dollars to license popular IPs like Hello Kitty and Nickelodeon to create and sell NFTs but didn’t find any extra utility for holders besides trading those JPEGs.

• Limited market size. While there are over 18 million anime fans to reach, their first customers will likely be us, the web3 degens. SFT will have to find a balance between price and scarcity, not to oversupply the market yet still become profitable.

• Speculation and patience. Time will tell how many holders are truly excited about the future of anime fandom versus those looking for a quick flip of an NFT accompanied by the likelihood to claim a token. SFT will have to keep holders engaged even if the first collectibles take months to arrive.

This list is not exhaustive.

Why Am I Bullish on San FranTokyo?

I'm bullish on SFT for five reasons:

1. Physical product in a growing market. Through tokenized figurines, SFT aims to connect both worlds, the physical and digital. Even if it takes longer for anime fans to understand the value of blockchain, SFT can still sell them physical collectibles representing the greatest web2 and web3 anime IPs.

2. Traditional business model. While the tech is innovative, the business model is proven to work if executed correctly. SFT pays to secure the best IPs, create products, and sell them to anime fans. Once they have physical collectibles out, they don’t have to depend on crypto cycles.

3. Building the pipeline. As the saying goes: sell shovels while the majority rushes to dig for gold. SFT wants to build a digital infrastructure for other businesses and brands to come and build the anime city with them. If built right, the network effects will also help them to onboard legacy web2 brands into web3 and get an extra source of revenue.

4. Collaborative mindset. SFT is the city of convergence because they are not operating in isolation. They aim to elevate the entire anime industry and build with other projects. Remember that MyAnimeList with 18 million anime fans we talked about? They can build its web3 version together.

5. Experienced team and Animoca Brands. You can hardly imagine having bigger partners in web3 than Animoca Brands and its strategic subsidiary, Animoca Brands Japan. SFT has an open door to over 400 portfolio companies, which gives them a big competitive advantage. Animoca Brands also led the investment round, so the project is well-positioned to survive a potential bear market.

The founders dream about being in the iconic store Shibuya PARCO in Tokyo one day, next to Nintendo, Shonen Jump Shop, and other IP holding companies that sell clothing and merchandise. Weebox pop-up store on the top floor.

If they achieve this, it means millions of people will be regularly interacting with the brand — and they will become familiar with the benefits of web3 technology.

For them and the entire web3 space, I hope they will achieve it.

Disclaimer: This is not financial advice. I've collected a Genesis Pass, so did my best to be unbiased.

If this article gave you any value, please share it with your friends.

Thanks for reading,

beast