We assign the Gameflip project a "Stable" rating and recommend participating in the Gameflip ICO both to long-term investors and for those who are interested in speculative growth of the token price. The tokens will gradually grow in price during the crowdsale; thus, we recommend participation in the early stages of placement to obtain the maximum discount.
Gameflip gives the impression of a serious project that has a lot of strong points; the project already has a centralized prototype, the gameflip.com game marketplace, with a two million visitor base. The very idea of a decentralized, low-cost marketplace is in demand in an industry dominated by large players offering expensive services.
The project team is well known among both the gaming community and Silicon Valley’s entrepreneurs. Gameflip has gathered a powerful team of advisors led by Richard Melmom, co-founder of Electronic Arts. The connections and experience of such people should positively affect the promotion of the project among developers of computer games.
We consider the threat from both centralized and decentralized competitors to be the main risk for the project. Clearly, any easing of the price policy of Steam will be immediately accepted by the gaming community; not to mention a change in attitude towards the in-game content market from Steam, Playstation or Xbox stores. Even if the largest sellers of computer games are not ready to change their business models, there are other decentralized marketplaces being developed that could finish their platforms more quickly and offer more convenient functionality.
Despite this we are optimistic about the prospects of the Gameflip project, as we believe that it has all the necessary initial conditions for successful development; competition will benefit the entire digital content sales industry in any case.
Project information and the ICO
Gameflip is a project that aims to create a marketplace for virtual game objects, using Ethereum smart contracts.
The project is the brainchild of Gameflip.com - a major website for in-game trade, distribution of games and other virtual goods. Gameflip was founded in 2014 in Silicon Valley and attracted more than 10 million dollars of venture capital, after which it actively began to increase its positions in the market for trading in-game items.
The activities of the existing portal, as well as its achievements over 3 years of operation are described quite extensively in the project white paper. As the team states: “We have already built one of the largest digital goods marketplace platforms, with more than 2,000 registered users and 500,000 monthly actives. The platform has grown significantly in the last two years.”
In addition to a business background, the project has a strong team of developers and consultants; there are big names in the gaming industry. Eventually, with the help of the ICO and the services being developed, Gameflip hopes to create the most popular, safe and promising p2p marketplace in the game trading market, and distribution of game items from developers to players on via the Gameflip.com portal.
FLP tokens will be used in transactions within the platform, forming a complete ecosystem. In addition it is planned to encourage game developers to implement the services of Gameflip using the tokens.
ICO start date: 28th of November, 2017 at 19:00 UTC
ICO end date: 30th of December, 2017 at 19:00 UTC
Hard cap: 216,000ETH (~$62,000,000)
Token: FLIP, standard ERC-20
ICO price: 1 FLIP = 0,005 ETH
Accepted payment: ETH
Total emision: 100,000,000 FLIP
- 43% - Pre-Sale, Tokensale
- 40% - Network Growth
- 14% - Gameflip
- 3% - Advisors and Partners
Tokens on sale: 43,200,000 FLIP
Bonuses are offered based on the time and amount of tokens purchased, up to 340 FLIPs per 1 ETH. See the sections below for details.
Tokens designed for network growth (40% of emission) will be used to fund a bounty campaign for game developers and server administrators. Thus, counterparties will be motivated to implement Gameflip services in gaming ecosystems as developers will receive revenue in the form of FLP tokens.
Gameflip (14% of emission) – These tokens will be retained by Gameflip and they may be used for marketing, partnership, team expansion, future development or any other purposes at Gameflip’s discretion. These tokens will be unlocked as follows:
- 2,000,000 will be unlocked on January 1, 2018;
- 4,000,000 will be unlocked on January 1, 2019;
- 8,000,000 will be unlocked on January 1, 2020.
Advisors and Partners – 2,800,000 Tokens. These tokens will be reserved for advisors and partners. These tokens will be unlocked on January 1, 2018.
Unsold ICO tokens will be frozen for 3 years from the date of the crowdsale.
Project services and their usage
To understand the entire Gameflip infrastructure that is planned to be created, it is also necessary to consider the capabilities and conditions of existing services offered by Gameflip.com. The project is based on introduction of additional services into the existing promising marketplace, with the aim of evolution into the foremost progressive service for gamers.
Currently, Gameflip is a platform for trading in-game items from 15 games offering the following facilities:
- Access to the marketplace using a web portal and mobile application (iOS or Android)
- High security and anti-fraud measures in the execution of transactions, including a customer support service
- Providing escrow for digital objects (where applicable) and automatic transfer of items
- Public ratings for sellers and the ability to communicate with sellers
- Advanced inventory management tools, including API access, for ease of transactions
- Option to choose from a wide range of digital goods on PC, mobile and console games, and from the broadest categories – in-game items, in-game currency, and digital codes.
The idea of the Gameflip portal is not new - there are many similar intermediary services, but they are often concentrated either on one game/server, or offer limited functionality or reputation.
Using the ICO, Gameflip aims to implement an item trading system using the architecture of the Ethereum network creating its own decentralized marketplace based on the FLP token.
The final platform will be an assemblage of Gameflip architecture as a service provider, the Ethereum Virtual Machine (EVM), Ethereum smart contract as a trusted mediation provider and Gameflip architecture on the basis of the provided API and SDK. Ultimately, the gamer will be able to introduce in-game items into the blockchain, as well as conduct secure transactions for crypto currency.
The functioning of the trading process can be considered from two sides: The listing and sale of in-game items in blockchain based on a smart contract, and the purchase of in-game items under a smart contract. In fact, these two actions demonstrate the process of interaction between the owner of an item (seller) and its buyer via Gameflip.
Listing of a game item on the blockchain is desirable for a secure sale; the owner of the item, the buyer and the game developer/administrator receiving the commission clearly have an interest in this. The requirements for listing of an item are set by the developer himself in order to prevent imbalance in the gaming economy; however, the parameters are unimportant for a smart contract and Gameflip.
Starting the listing process, the owner of the item places it within the game in a special vault where information about the owner remains unchanged. The vault is created by game developers and the form of implementation of this function may differ depending on the game. After "freezing" the item in the vault, the API sends information for forming a smart contract with the provider (Gameflip.) Gameflip uses a combination of off-chain and on-chain architecture to create the smart contract where the terms of the planned transaction are prescribed, and launches it on the Ethereum network. The seller finds a customer; he confirms the transaction which can then take place.
After the listing of an item on blockchain, any player can buy it using his own crypto wallet. After making a transaction and confirming the transfer of funds, the player receives the game item as it moves from the vault to the gaming environment. Before this, the API sends information about the removal of the object from the blockchain.
The architecture of this service requires that players have a wallet supporting ERC20 tokens and allowing payment for purchases of in-game items. Gameflip will develop such a wallet, aiming to solve the problems in using third-party applications and the need to integrate them into the gaming environment. A proprietary Gameflip wallet will be available in the game for players’ convenience.
Unfortunately, the parameters of the developed wallet or MVP are not announced by the team; only general concepts and functions of the application are described. This is a central element of the ecosystem being developed.
Gameflip’s services are applicable to any game; however, they require appropriate add-ons and API implementation, since the trusted provider (Gameflip) and the smart contract must have access to the gaming environment. The team will provide access to its own API, as well as a set of public SDK in the most popular programming languages (C#, Java, NodeJS, etc.).
The use of Gameflip’s services is advisable for any game and is beneficial to all parties. In the standard practice for item monetization, the developer does not receive anything from the trade and cannot control transactions, often dealing with offline operations as they are able to undermine game ecosystem. In the case of the Gameflip project, the developer or administrator has a direct motivation to facilitate trade - he receives commissions from each transaction made. At the same time, it is the developer who determines possible items for listing, taking responsibility for risks to the ecosystem, being the most competent and interested in its sustainability.
Thus, Gameflip’s services can find application in many games; this will depend only on establishing links between the team and game developers. The reputation of the team and consultants, as well as the partners of the current Gameflip business can be relied on for this.
The video games market is already large but continues to grow dynamically. At the same time, new technologies constantly support video games. Not so long ago the mobile application market became commonplace; it already occupies almost half of the entire video game market. This was greatly facilitated by the development of a free-to-play model, which allows attracting a huge audience due to the lack of an input threshold. In this case, such games are able to collect large revenues from sales of in-game content (for example, Supercell - the publisher of Clash Royale and Clash of Clans - generated revenue of $2.3 billion in 2016.)
A graph of the NEWZOO forecast for growth in the global gaming industry up until 2020 is given below:
The figure clearly shows that the market share is moving towards games on mobile devices and this segment will occupy 50% by 2020. Currently, PC and game consoles still hold more than half of the market. This confirms that the main trading platforms of the game world are Steam, plus PS and Xbox stores. The current distribution of the market is described more closely in the following figure:
The gaming industry has long been a global one. Taking e-sports disciplines as an example, it can be seen that the strongest teams are located in the eastern hemisphere and more specifically in the Asian region. Many factors contribute to this, including a large population in the region. This is confirmed by the distribution of market revenues by regions:
The project is staffed by a highly qualified team of veterans from the gaming industry with experience working for the largest players in the market, as well as experience in fintech start-ups. In addition, the founders and project managers have a working project, Gameflip.com; therefore they are deeply immersed in the nuances of in-game trade. We also note that the majority of the team came from a major gaming developer, Aeria Games (where revenue reached $100 million), which was sold to the German media conglomerate ProSiebenSat.1, i.e. they have long experience working with each other.
At the same time, despite the abundance of sources we did not find any significant negative moments associated with the team.
JT Nguyen- Co-founder and CEO. Has more than 15 years of experience in the management and creation of businesses, including 10 years in the gaming industry. Prior to Gameflip, he was COO of Aero Games for more than 7 years until its sale. Has experience with HSBC (as operations strategy consultant), retail (eCommerce start-up) and mobile industry (Motorola). Holds MBA (UCLA Anderson School of Management) and MS (Electrical Engineering from Stanford University).
Terry Ngo- Co-founder and CTO. Has 19 years of experience in building and leading engineering and product development, including 11 years in the gaming industry. Former Co-Founder and CTO of Aeria Games. Has experience in technology companies Bluegog, Open Harbor (sold to Tradebeam), Good Technology (sold to Motorola). Received MS in Electrical Engineering from Stanford University. Has a U.S. patent in mobile wireless devices.
Bryan Talbot- Head of Engineering. Has more than 20 years of experience in Silicon Valley. Former platform architect at Aeria Games. Prior to that, also worked in similar positions in Open Harbor, Iconix and Carrier IQ. Bryan's previous experience ranges from operating system device driver development, expert system (AI) design for a multi-national customs (import / export) clearance system, email security (for which he holds a patent), mobile network many years of server.
Matheus Arnellas - Head of Live Operations. Has 6 years of experience in the management of cross-functional teams in the sphere of f2p games. Previously worked at Aeria Games since 2011 in various positions; current Operations manager at PlayNext. Matheus holds an MBA from FIPE São Paulo.
Ed Kim - Head of Business Development. Has more than 15 years of experience in the gaming industry. Current consultant for hedge fund CryptoLux Capital. Former co-founder and CEO of Vector Gfx – a developer of motion tracking and image recognition software for VR and AR platforms. Ed holds an MBA from the Marshall School of Business at the University of Southern California.
Udayan Sharma - Head of Marketing. Has over 12 years of experience in gaming industry, e-commerce and tech. Prior to Gameflip, Udayan was in the digital free-to-play gaming space as Director of Marketing at Aeria Games. Udayan holds an MBA from Purdue University, Krannert School of Management.
Tony Simonovsky - ICO Success Manager. Has extensive experience in digital marketing (more than 14 years). In 2017 Tony advised the KickICO team to help increase exposure for their upcoming ICO to global crypto investors.
A number of weighty specialists among the consultants for the project are worth noting. For example, Gameflip drew Richard Melmom (Emeritus Partner at Bullpen Capital, Co-Founder of Electronic Arts), Kotaro Yamagishi (CEO of Keio Innovation Initiative, Board Member and Co-Founder of GREE), Heiko Hubertz (CEO and Founder of WHOW Games GmbH, Founder of BIGPOINT).
Development strategy and the roadmap
All the active work of the team is aimed at the decentralization of gameflip.com, the main business of the project which has been successfully developing since 2014. At bitcointalk.org, the team is often asked whether the FLP token will be used as a means of payment on gameflip.com. The answer is always affirmative. It should be added that there are Bitcoin payments already within the marketplace and the current list of available payment methods is the following:
The development plans are presented by the team on both the website and in the white paper. It should be noted that they are presented in different forms, so here we will dwell on both variants in more detail.
The white paper presents a conceptual plan for the development of the Gameflip project from its current state to a fully decentralized format by the end of 2018. Below is a table as it is published in the white paper:
As can be seen from the table, the project should turn into a global player in the gaming industry with a large volume of transactions and maximum support for operations in cryptocurrency by the end of 3Q 2018. Also, the project aims to become a supplier of computer games and related game content, thereby approaching the goal of becoming the first "decentralized Steam".
The roadmap is published on Gameflip’s website where the founders have identified the main milestones and the specifics in more detail.
The key weakness of these ambitious plans is attracting computer game developers. Advantages for games publishers are described without much specificity; it is said only that publishers will benefit from one more marketplace and that they will have a percentage of the platform’s commissions. Unfortunately Gameflip has not yet confirmed the existence of partner programs with major game publishers.
The only thing that allows us to look optimistically at the prospects of the project is the availability of the working platform, the marketplace and the team of distinguished advisors, whom we hope are connected to the project actively and will be able to contribute to its development.
It is still about a month before the Gameflip ICO but the team has already done a lot of work on the promotion of the project, and has a fairly mature marketing company. That is to say that Gameflip is pretty well established on social media and on high-profile online publications. ICO descriptions and announcements have been added to all major ICO aggregators.
The most interesting announcements that can be used to get better acquainted with the project are given below:
With blockchain technology, the new FLIP token and decentralized ecosystem will advance the company’s vision for a fully transparent and frictionless infrastructure for transacting digital goods.
Industry leader Gameflip to sell FLIP coin for gaming digital goods during upcoming pre-ICO. Each year, global gamers spend more than $100 billion USD
Gameflip is at the forefront of addressing the demand for liquidity for digital goods via the decentralized ecosystem where digital goods on all gaming platforms — mobile, PC, console, and VR/AR
Gameflip Announces Upcoming Sale of Crypto-Token (FLIP) for Gaming Digital Goods
With blockchain technology, the new FLIP token and decentralized ecosystem will advance the company’s vision for a fully transparent and frictionless infrastructure for transacting digital goods
The gaming industry has been experiencing major shifts for a decade now. First came broadband internet, then the rise of Steam
In addition to ‘classic’ announcements and reviews, the project is marked by a series of video reviews by blockchain bloggers popular among ICO projects. A partial list of YouTube channels that have published reviews on Gameflip is given below:
- Crypto Spark
The team uses the regular channels for communication such as a group on Telegram, and the Bitcointalk forum. To be exact, the project has two groups on Telegram - one of them is in Chinese and the other is in English. The English-speaking group is quite lively and currently it has about 1.5K members; the Chinese one is weak, and there are only about 200 participants. Until recently, the thread on bitcointalk seemed to be abandoned but now it is quite active and already has 34 pages of discussions. Many visitors are interested in competition among game coins, which have appeared quite a lot lately:
At the same time, it should be noted that the team could have answered the community’s questions better. Often, their answers are conventional quotes from the white paper, while inconvenient questions often remain unanswered. Also the lack of quality comparisons with competitors can be related to the marketing issue since if these were present many questions would fall away by themselves.
Since the website itself has existed for a while and has a large user base, the team has decided not to open separate profiles for the ICO on social media. Instead, already existing publics play an important role in the project’s promotion. This is not surprising, since the number of subscribers is quite impressive:
- Facebook – 20,207
- Twitter – 52.9K
Thus, there are no questions regarding the amount of material about the project presented on the network. The only thing we would like to see is quicker responses and answers to the community’s questions.
Competitive features of the project
The idea of ICO projects tied to gaming industry is not new and has become popular recently. To position the Gameflip project correctly we should first compare it with available centralized platforms. The largest and best-known Steam, of course, but there are many other marketplaces that allow purchase of both games and in-game content.
- Green Man Gaming
These platforms have similar features; they also have a number of differences but in any case they compete with gameflip.com as they work in the same segment.
The first ideas regarding the use of cryptocurrencies in the gaming industry were associated with the possibility of a secure exchange of game content outside a game itself while using the new opportunities of smart contracts. The best-known projects in this area are listed below:
GameCredits (GAME) -
The first coin created for gamers and game developers, allowing in-game purchases and purchases of games in online stores.
Enjin Coin (ENJ) -
A cryptocurrency that offers communities, content creators, game servers and game publishers an easy solution for implementing virtual goods and real value into their gameplay.
DMarket (DMT) -
A global marketplace based on blockchain and smart contracts. It will enable one-click sale, exchange or evaluation of every virtual item between all games on any platform.
At the same time, each of these projects can succeed. The services built on their basis are similar and are realizable on any of the platforms. Everything will depend on the speed of implementation of these services and their quality.
The Gameflip project has a working marketplace and a strong team; thus, they have everything for a successful decentralization of their business.
The economic model for Gameflip is quite simple and promising; however, there is little specific information about it. The issued FLP token will be of infrastructural importance - it will be a settlement currency for trading in-game items, and gamers will nominate items in FLP.
When executing transactions within the platform, a small commission will be levied which will be distributed between the developer, Gameflip itself and third-party service providers. Thus, motivation of game developers to introduce Gameflip services into their game ecosystem will be provided, since with standard monetization the developer at best case will not receive anything, and at worst case could lead to instability of the gaming economy. The Gameflip platform will receive funding for its operations and capex.
Unfortunately, Gameflip does not offer other information in its documentation, except for one paragraph with explanation of the distribution of commissions. There is no understanding of the size of commissions, whether they will be fixed or determined in each case by a condition of a smart contract and how the collected tokens will be implemented.
It should be noted that the project itself began to be developed recently and the team is probably only working on the formation of a sustainable ecosystem. The same goes for the bounty for developers, since specific methods and mechanisms for implementing 40% of the total token emission are not prescribed.
A financial plan is also absent but Gameflip provides a graph of revenue growth on its own platform, assuring the success of its business model. According to the schedule, the quarterly revenue of the business has increased 7 times since the beginning of 2016 as of the third quarter of 2017. This is a serious indicator; however, the values on the chart are relative and the costs are unclear. In addition, high relative growth rates are normal for a developing business.
In our opinion, the Gameflip project has two main risk factors. Another crypto asset or coin that can be used somewhere is not much use; an ecosystem is needed that will serve the needs of the industry. In the case of video games, users need a safe, cheap marketplace with a large selection of content. It is still a question whether the founders will be able to attract the largest publishers with AAA-level games whilst offering a minimal commission in the market.
The second important aspect remains the position and behavior of the largest competitors in the market. It is obvious that game content is most convenient to exchange and trade within the platform on which the game itself takes place. Therefore, the main competitors are Steam, PS and Xbox. So far, in-game content trading cannot be called a full-fledged segment for the largest gaming marketplaces. Everything can change quickly and decentralization would not be a major advantage for start-ups.
In addition to the giants of the game world, projects like Enjin or DMarket which are trying to implement a similar functionality are also a threat. Currently it is impossible to say who is preferable or whose product is more in demand; this will be clear only by next year.
Investment attractiveness of the token
A key factor in the potential investment attractiveness of the FLP token is the ability to participate in the expansion and development of a successful Gameflip business. The project has a proven team with a promising idea, at the same time there are no great plans for occupying the entire market of virtual goods trading; the team is very reserved in its statements - the experience of working in business is evident. Also the low fundraising goal of the ICO shoul be noted (taking into account the funds already collected during the pre-sale - about $10 million) and a significant bounty for game developers; despite the large amount of placement, unsold tokens will be frozen for 3 years.
As a result, we get the impression that the team clearly knows its market and how it will develop, representing the requirements of developers. This is a chance for investors to gain long-term advantages from the development of the Gameflip platform. In addition, according to Gameflip, the token issued at the ICO will be actively introduced into services which are not associated with blockchain such as the distribution of games, accessories and gift cards. Thus, from the point of view of the investor, there is an opportunity for a reward from the Gameflip business in general, not just from the introduction of technological services. Token demand will thus be stimulated even before the full-fledged launch of the blockchain marketplace.
We can talk about the speculative attractiveness of the FLP token but in a more restrained manner, since hype around the project is the driver here. It is still about a month before the Gameflip ICO but the team has already done a lot of work on project promotion and has a fairly mature marketing plan. In addition, a potentially "warm" audience for the project is available - visitors to Gameflip.com.
Summarizing the above, Gameflip gives the impression of a serious project due to a significant background in business, a ready-formed community as a potential consumer of the product being developed, and a well-known and qualified team that has worked together for many years. FLP tokens have long-term investment potential due to their infrastructural importance for the platform as a settlement currency. At the same time, the project is accompanied by fundamental risks caused by the use of the Ethereum blockchain (transaction speed) and the position of the largest developers in the market of virtual item trade. In addition, many strategic aspects and final functionality of services are not fully worked out; these have gaps which the team is still working to close.
The information contained in the document is for informational purposes only. The views expressed in this document are solely personal stance of the ICOrating Team, based on data from open access and information that developers provided to the team through Skype, email or other means of communication.
Our goal is to increase the transparency and reliability of the young ICO market and to minimize the risk of fraud.
We appreciate feedback with constructive comments, suggestions and ideas on how to make the analysis more comprehensive and informative.