We expect this to be a special year for Playkey: In 2018 the beta version of the decentralized cloud-based gaming platform will launch, for which more than $10.5 million was collected through the ICO. At the same time, Playkey is scaling up and improving the unit economics. These are the main directions of strategic development for the next year. So what are the tasks that need to be done?
One of Playkey’s goals is to increase the number of active monthly users fivefold by the end of 2018. This achievement will help the company reach new markets, the most important of which are the US, South Korea, and Germany. Why these countries in particular?
The US is the second-largest gaming market in the world in sales volume, at $25.4 billion. The biggest market, China, can only be accessed by complying with strict regulations: for example, local shareholders must own over half of a company. By contrast, the American market is more hospitable toward global startups.
South Korea is not among the world’s leading economies for now, but it’s one of the top 10 gaming markets, with sales of $4.2 billion. The country’s gaming sector is one of the most advanced, and South Korea is considered the capital of the cybersport world for good reason. For cloud-based gaming this market is an ideal fit: In 2017 South Korea was in fourth place among the countries of the world for high-speed Internet (127.45 Mb/s) and in eighth place for high-speed mobile Internet (47.64 Mb/s). In addition, 30% of the participants in Playkey’s ICO are from South Korea: Their investments have proven their interest in such services.
And then Germany is the chief gaming market in Europe, fourth in the world by volume ($4.4 billion). More than half of the country’s online population loves games — that’s 37.2 million monthly active gamers. A quarter of them switch between desktop computers, consoles, and laptops and do not give preference to a single device. This lays a promising foundation for the development of cloud-based gaming.
These three markets are essential for Playkey in 2018. In order to succeed in them, we have to hone our launch plan for the new countries. So in March Playkey became available in Germany, where a server infrastructure is already in place.
In the German market Playkey is working through the following tasks.
- Getting feedback from users
Why do players buy a subscription? What stops them? How can we improve their experience with Playkey? To obtain this information, Playkey plans to use several methods and select the most effective (or the most productive combination of them):
- The first option is a telephone or internet conversation with a representative of Playkey.
- The second option is to communicate through a widget on the website.
- The third option is to do polls by email.
Based on the data received, Playkey will decide how to design the product for a given country (in this case in Germany): what payment systems are needed, what content is most in demand, what our service should look like, and what prices should be set in each region. In order to communicate with users and correctly interpret information from them, Playkey will look for country managers in each country. They will become members of the team and will advise on how to adapt the product to make it interesting to a user in a local market.
2. Finding marketing partners
The next task, which Playkey plans to work out in Germany, is to find relevant marketing channels. We have to find partners with a low customer-acquisition cost, in other words those who have access to a key audience: people who don’t have money for a powerful computer and therefore are prepared to play through cloud-based gaming services on a laptop or a low-powered computer. According to our experience in previous regions, this might mean video bloggers, streamers, and other opinion leaders in the gaming industry.
3. Location of hardware
To ensure uninterrupted video-stream transmission and high service quality overall, servers should not be placed tens of thousands of kilometers away from a player. In each country we need to find a reliable partner. In Germany we already have such a partner: The Playkey servers are located in the DARZ data center near Frankfurt, and the solution provider is G-Core Labs. Once we enter the German market, we’ll be able to test the hardware more comprehensively under the new loads, and get ready to launch on the US and South Korean markets.
Improving Unit Economics
We need our unit economics to be highly profitable: In 2018 Playkey plans to quadruple conversions of website visitors into paying users. This will be an additional factor for successfully developing the decentralized platform: The shorter a gamer’s path from visiting the Playkey website to launching a game, the faster the new ecosystem of players and miners will come fully to life.
The main way to successfully convert website visitors to Playkey gamers is to grab the attention of visitors who don’t yet understand the need for it or what features it offers. How do we do that? Playkey plans to test several different hypotheses.
For example, we can add more information about games in the catalog and check how it affects purchase decisions: Will users get emotionally involved if they see a trailer for a game that they have heard about for a long time?
Or we can add a phrase about refunds for unsatisfactory service: Will it win over those who have doubts that the service will work? Or we can alter the service plans to find out what’s more important to a player: unlimited time, or quality? And these are just a few examples out of a dozen hypotheses.
Another important element of the unit economics is the cost of a server. A way to reduce it is to deploy the decentralized cloud-based gaming platform: Games will run on the computers of other users, the miners. It will cost less to serve the miners than to maintain a large collection of servers, and the unit economics per user will improve correspondingly (even allowing for Playkey’s plan to lease hardware to some of the miners). The first miners will get access to the Playkey ecosystem in 2018, and most likely will start earning money.
We also need to lengthen the time that players use our service. For this, we have to figure out what problems users run into who stop paying after two to three months. One of the main reasons is that they’re not comfortable playing due to low internet speeds. So, we need to develop a video protocol that completely satisfies users’ requirements: It will automatically categorize users and sort them by internet quality (bad, good, average) and will adapt quickly to provide the best possible image even with poor connection quality.
What lies ahead is an even bigger increase in Playkey’s audience, a further improvement in game quality on the platform, and thus an increase in profit. And it’s not just for the team: Playkey is still welcoming investors, owners of tokens, and miners as partners in the development of cloud-based gaming.