Our series of conversations with founders and companies going through HYPE’s Spin Accelerator in Taiwan. In this conversation we spotlight Gameconomy.
We went one-on-one with Gameconomy’s founder Kin Meng Chan to learn about how they aim to work with game developers to provide an integrated platform for secure and transparent peer-to-peer trading of in-game items and for gamers a secure way of purchasing items.
How was your experience at HYPE’s Taiwan Bootcamp?
Kin Meng Chan: “It was a unique experience because it combined a pitch competition as well as having the chance to spend one-on-one time with mentors. Both of those experiences gave me the chance to get individual feedback specifically for my startup.
“In terms of the pitch competition it was really interesting to know how other startups are looking into gamification so it gives me a good idea how Gameconomy can help in that area.”
What is Gameconomy and how it’s solving particular problems in gaming?
KMC: “Originally Gameconomy focussed on empowering gamers with true ownership of in-game virtual items and resources that can be purchased within a game.
“Now we have developed a secured platform for gamers to do legal, peer-to-peer trading.
“This is a long-standing issue, but what is happening now a lot of players if they don’t own a particular item some of them go to black markets to buy and sell virtual items illegally, we call it that because game developers generally don’t allow it. So when this happens it’s actually a very huge problem to developers because they are supposed to be the ones to provide and regulate the platform for the gamers to do trading but most of the time they don’t have the technical knowledge or resources to actually build a platform to support it.
“When trading happens without their knowledge it’s difficult for them because they don’t know how trading impacts their overall game economy, that’s one of the reasons why they are against it.
“We think if you legalise and regulate the trading we can help solve this problem. It also means game developers can design the game so the trading doesn’t impact their game play especially, a good way of describing it is ‘spending to win’.”
What are players trading?
KMC: “We’re talking about skins, game skins, weapons and armour. Some even go the complete extreme and trade their entire game account away.”
How can game developers benefit from Gameconomy?
KMC: “For a bit of context of the sort of money they’re losing, a good game example is Lineage 2. The trading volume on the black market is about US$60 million per year, so let’s assume that the game developer could charge a five per cent transaction fee, that’s US$3 million per year which is huge, can you imagine if a developer could recoup that revenue?
“When we’re talking to developers, telling them that we are trying to enable peer-to-peer trading we were receiving some resistance because a lot of the time it’s based on long-standing issues and not all developers realise or view that they need to stop the issue. We totally understand that so what we have done instead of enabling peer-to-peer trading, we make it an option as we want to help the developer build a more ambitious game. By changing our positioning into that we are getting a better reception.”
Is there currency for peer-to-peer trading?
KMC: “We could introduce a virtual currency, but it’s got to be stable and withdrawable into fiat currency.
“Having a currency is not our main focus as part of the technology that we can offer to game developers. Again, what we really want is for developers to build a more ambitious game.”
You’re going to be doing a beta release shortly so what do you hope to learn from it?
KMC: “As a startup we understand can’t do a big launch everywhere so what we plan to do is launch a campaign for early tester sign-ups. We’re going to introduce our platform to a small number of game developers to become our pilot testers and try everything.
“We’ll launch small, gather more data especially working out how the platform helps them solve their problems and try to quantify it and translate that into monetary value. We want to see how game pilot testers enable peer-to-peer trading and micro-transaction support so we can understand if there is a shift or improved reception of peer-to-peer trading. That’s what we want to learn.
“Let’s say we see a trend that developers will enable peer-to-peer trading, we’ll know that it’s going to be the future, we’ll know game developers will realise the importance of that and how it will help with their revenue generation.”
Conversations produced in collaboration with HYPE Sports Innovation.