Cryptocurrency has the potential to disrupt many industries, and a startup called GameCredits hopes to use it to disrupt the mobile app store duopoly of Apple and Google. Its motto is “In games we trust.”
GameCredits is creating a blockchain-based app store that will be an alternative place where mobile game developers can sell their games. Users will be able to make purchases in the games using the company’s own digital blockchain currency, dubbed GameCredits, and GameCredits will give 90 percent of the proceeds to developers, rather than just the 70 percent that Apple and Google share from their app store sales. GameCredits hopes to remove the centralized institutions in the app business.
GameCredits says it has signed up developers who have more than 300 games available for download from 150 developers in its app store, and it has enabled a GameCredits payment system that is designed to benefit its investors, its developers, and gamers themselves. GameCredits believes it can serve the smaller indie game makers as well as the large established game companies.
Cryptocurrency has become extremely popular in the past six months, with consumers and investors creating a cryptocurrency market valued at $141 billion in the past six months, according to Coinmarketcap.com. Ethereum has become the most popular one, and it distributes itself across many computers in what is called a blockchain. The blockchain is a digital ledger in which transactions are recorded chronologically and publicly, allowing for greater transparency and security. The thinking is that people who engage in blockchain transactions are doing so in a way that is both trusted and transcends local traditional currencies.
Sergey Sholom, CEO of Belgrade, Serbia-based GameCredits, said in an interview the ideas and innovations for the business came from his experience as a game developer. He started Datcroft Games in 2004 and launched a lot of games, and he has more than 13 million players to date. He knew the perils of being just one developer among a sea of many developers.
His vision is to create the universal currency for the world’s 2.6 billion gamers, to empower developers, grow the overall game industry. Sholom and others created GameCredits about two years ago. Ivica Simatovic, a former executive at SD-media, was the initial CEO at GameCredits, but Sholom, who was previously vice president of business development, assumed the CEO title recently.
“We came from the game industry and wanted to solve the problems that we saw,” Sholom said. “I thought that there were bigger things that could be done with benefits to gamers and game developers.”
I’ve asked a couple of investors about this kind of investment. While they declined to comment specifically on GameCredits, they are worried about the number of unregulated enterprises that are popping up in the cryptocurrency space. Such companies are raising a lot of money, but they’re not necessarily being transparent enough about how they will invest that money in the projects that they’re advocating.
“Out of the thousands of new companies trying to build ‘blockchain’ solutions to disrupt various industries, GameCredits is the only one with an actual solution, working product, millions of users and a quantifiable market that is being disrupted,” said Fran Strajnar, CEO of Brave New Coin, in an email.
Strajnar has focused on Bitcoin since 2010.
“I have seen solution designs for post trade settlement of cash equities, for provenance, for supply chain,” he wrote. “Tokenizing in-game credits is a multibillion dollar market and game credits solution design actually works. I am clearly bullish on GameCredits, but it’s only because by comparison to seeing hundreds of other pitches and knowing GameCredits actually has the right tech, team and approach. ”
I’ve been in Bitcoin since 2010, I have seen solution designs for post trade settlement of cash equities, for provenance, for supply chain etc.
Tokenizing in-game credits is a multi-billion dollar market and game credits solution design actually works. I am clearly bullish on GameCredits, but it’s only because by comparison to seeing 100’s of other pitches and knowing GameCredits actually has the right tech, team and approach.
The GameCredits Mobile Platform and Store will be a mobile gaming app that hosts hundreds (and eventually thousands) of games. You can pay for the games or in-game content with cryptocurrency. The proprietary payment gateway will allow gamers to buy games and in-game content with cryptocurrency. They can buy that currency with credit cards and other local payment methods within the mobile app. GameCredits will incent players to pay with cryptocurrency via discounts.
Since the transactions are transparent and easily verifiable, GameCredits can pay developers within 60 hours, rather than 60 days for the big app stores. And it only keeps 10 percent of the proceeds for itself, rather than 30 percent. It will use those proceeds to buy more of its own cryptocurrency. That will drive the value of its cryptocurrency upward, helping out those who invest in the cryptocurrency.
Fraud protection is easier, and there are no chargebacks. Buyers can also stay anonymous, and that might encourage them to buy more currency. GameCredits will pay the developers with its own currency. If the currency price is always rising, then the developers will make more and more money from a given transaction, Sholom said.
Players will be able to download the free GameCredits App on Android, access the games, and make purchases. The payment gateway is in beta testing in Datcroft games and currently is being tested by hundreds of players. This mobile application and gaming store is scheduled to launch sometime soon.
GameCredits already went through an Initial Coin Offering (ICO), or a “crowdsale” auction of tokens for a select amount money. The company raised $1 million to cover its development costs from investors at first. And then they raised more than $54 million in its ICO for its MobileGo tokens (based on smart contracts and blockchain) from more than 7,300 participants during the spring.
Among the cryptocurrencies, GameCredits is now ranked No. 36 in cryptocurrency market capitalization, with a value of $198 million. That suggests that the investors in the tokens are optimistic about the GameCredits currency. Sholom hopes to spend about half the money raised on marketing the store and its games. And he will use some of the money to buy back tokens and raise the value of the currency. Rival game currencies include GameUnits.
The company now has 150 people across seven countries, including several offices in Russia, Serbia, Poland, India, and in the U.S. It will open an office soon in China. The Indian market might be the first place where the GameCredits store opens. The goal is to have a grand opening in October in India, and GameCredits announced that it plans to open such a G Store this week.
“We must go where we have the biggest potential to grow,” Sholom said. “So that means China, Japan, Korea, and India. India is the No. 2 country by population, and gaming is in India where China was five years ago. Credit card use is low, and Google Play is not there.”
Sholom is optimistic that GameCredits will also cash in on the mobile esports movement.
The Securities and Exchange Commission may subject companies such as GameCredits to new regulations, but that remains a blurry topic.
Of course, the biggest obstacle is that a lot of people don’t own cryptocurrency, or don’t know how to acquire it. GameCredits will have to educate people how to do that in order to make its store more popular. That won’t be easy, and Sholom knows it.
“What if Google follows us?” he said. “Then I will be happy because I was able to change the industry. I don’t think they will give up the 30 percent take. Our mission is massive cryptocurrency adoption.”