Blockchain-based games market DMarket has raised $ 6.5 million in risk finance and added video game pioneer Trip Hawkins as a board member. Funding will help DMarket Extend the decentralized, cross-game marketplace where players can trade freely in the game and sell assets to add real value to these virtual items. Hawkins brings a degree of seriousness to blockchain games that have struggled to gain mainstream acceptance and business traction.
DMarket has developed an in-game item trading platform based on blockchain, the transparent and secure decentralized ledger that can confirm who owns a particular item and whether it is unique. Game developers, players, influencers and brands can safely create video game content together and make profits while still playing and having fun in various gaming multiverses, said Vlad Panchenko, CEO of DMarket, in an interview with GamesBeat.
to collect money
Almaz Capital led the round with the support of Xsolla. With the new funds, DMarket will expand its in-game ecosystem and plans to hire engineers and additional executives in the next three months. Amid the economic uncertainty of the pandemic, DMarket hopes to gain momentum in creating a virtual economy so that more people can make a living from trading virtual goods far beyond that of the gaming industry.
In addition to the investment, Hawkins joins DMarket as an independent board member. He is the founder and former CEO of Electronic Arts, 3DO and Digital Chocolate. "Alled" King of Nerds "by the economistHe has led EA for over a decade and the company is now valued at over $ 30 billion.
Panchenko said he met Hawkins about a year and a half ago and they got on well. Hawkins had studied the room and knew how to "finish my sentences," Panchenko said. “He has had very interesting experiences. I was hoping he would take the board position. "
Panchenko said his company is already paying millions of dollars a month to users who trade goods called skins in games like Counter-Strike: Global Offensive, Dota 2, Team Fortress 2, and Life Beyond. Users swap skins for weapons or other decorative items that change the look and feel of their items. A few more game worlds should go online soon, Panchenko said.
DMarket needed to develop technology to block fraudulent transactions and money laundering transactions by finding out things like cross-border payments, taxes, and exchange rates. "We had algorithms … that help us be better than others on the market," said Panchenko.
Why Hawkins signed up
Hawkins said in an interview that DMarket is at the center of several growth trends: advanced social games, virtual goods trading, fashion, sports, and blockchain. He noted that today's players don't really own the virtual goods they pay real money for. When a game company shuts down a game, the virtual goods have no value and the player cannot take them to another game. This inhibits the introduction of virtual game worlds and economies, said Hawkins.
"It's fun to work with people like Vlad, and it's a pleasure for me to share some of the lessons I've learned in my career with this next generation of young, talented technology gurus," said Hawkins. “And as far as blockchain is concerned, I would say that blockchain is a kind of bonus element for this concept. I think there are other basic things in the market that are leading. Of course, today there is a completely new kind of social platform that is not a horizontal supply service like Facebook. "
He added: “The mainstream game business is growing. They all have synergies between economies for social games and esports, virtual goods and the cloud. In this context, DMarket focuses on many of these topics and breaks new ground by saying: "How about a marketplace where virtual goods can be traded independently outside the game's ecosystem?"
Hawkins said much of the blockchain world was obsessed with speculation and quickly got rich. That wasn't a good thing, but hardcore gamers were intrigued by blockchain and willing to try blockchain-based trading. These forces have pushed and held back both blockchain.
Hawkins said he liked Panchenko's company because it showed that it can operate in multiple locations, including places where development costs are cheap. Ukraine is a good place for development, Hawkins said, since DMarket is easier to hold onto his team there than in a place like Silicon Valley.
DMarket employs 75 people, including around 70 in Ukraine. Other companies in the same field are Animoca Brands, Mythical Games, CryptoKitties and Forte. However, DMarket does not make its own games and does not issue its own cryptocurrency. The focus is on developing tools that developers can use to create in-game marketplaces and enable them to trade items, Panchenko said.
Previously, Panchenko had raised $ 19 million in 2017. The company has offices in Kiev, London and Los Angeles. DMarket's partners and customers include Xsolla, 4A Games, GSC Game World, Darewise, Playkey, Kiss and Tatem Games.
Game makers can use the DMarket programming interface (API) to make the elements of their games tradable, so developers don't have to create their own independent markets. This enables the portability of assets across games, which should encourage players to spend more and in turn generate more money for game makers.
On the way to "Ready Player One"
Some dreamers hope that blockchain enables cross-game activities and is the forerunner of Metaverse, the universe of interconnected virtual worlds like in novels like Snowfall and Ready player one. Panchenko said that progress on this front is slower than he would like, but he is now speaking to major brands and hopes that they will work with DMarket by autumn. He also registers other games to use the in-game marketplace.
"Ready player one? I want to live in this world, ”said Panchenko. “But to make it faster, I have to build the game developers business. This is step # 1. If I combine this business and my vision for the future, it will go faster. When I see how other people make a living in virtual worlds, it's like magic to me. "
For the metaverse to arrive, the blockchain must reach the acceptance of the mainstream. When asked when that could be, Hawkins said, "I don't really know how long it will take. Obviously there are creative things people do in the blockchain space. And I think virtual trading will be a really big deal whether blockchain is the key or not. I personally feel a bit patient about the blockchain side of things. I don't think you have any particular expectations for the broad acceptance of certain commercial applications for blockchain in public on a rigid schedule and predict when this will happen. What I think is much more predictable is that virtual goods will be a huge business in the future. "
Hawkins noted that large companies have been slow to adopt new technologies. For example, Apple initially hesitated to accept the sale of in-game virtual items that could be bought with virtual currency. That was in the early days of the App Store, but this kind of in-app purchase eventually became the primary way to monetize free mobile games.
"It's now a gigantic economic activity," said Hawkins. “Now everyone is taking care of virtual goods. We enlarge the player audience with such a fast clip. "
Hawkins warned that blockchain companies that took advantage of the cryptocurrency boom with initial coin offerings (ICOs) that are no longer available in the regulated U.S. market may not be able to access capital again.
"There was clearly a blockchain bubble and many companies took advantage of it," said Hawkins. “The venture community was more thoughtful. They avoided some of the companies that made ICOs and were shut down. But there is a lot of potential for a company that creates an innovative marketplace. "
Panchenko said platform providers should be careful as many companies build their own platforms with branches and sales. When you launch a new console like the PlayStation 5, you want players to stay in your ecosystem. The way to do this is to move players from one favorite game to another.
“The perfect way to do this is on the blockchain, where I have some memorabilia from one game and can use them in another game. Everything under one roof, ”said Panchenko.