Gaming industry innovator DMarket has Ukrainian roots and maintains a major development team in Kyiv The video game industry remains among the fastest growing economic sectors in the world and Ukrainian companies are very much part of this process. According to research firm NewZoo, the global games market is going to make around USD 135 billion in revenue in 2018, which is almost twice as much as in 2012. Forecasts continue to predict double-digit annual growth for years to come. Companies with Ukrainian roots or offices in Ukraine have had a fair share of success in the global gaming industry, contributing to its fast-paced development with a vast variety of games ranging from mobile titles to top-tier PC and console franchises such as Metro by 4A Games or S.T.A.L.K.E.R. by GSC Game World. DMarket is another gaming company with a strong Ukraine connection that is boosting the worldwide expansion of the video game industry. DMarket offers developers ready-to-use technology and a platform for monetizing their titles through trading in-game items. It is a novel service that also benefits players, content creators and the gaming community as a whole. DMarket first hit the headlines of the Ukrainian business media about a year ago as one of the country’s most successful tech startups in terms of investment attraction. Despite close associations with Ukraine, the company actually has its current headquarters in Santa Monica on America’s west coast, a reasonable choice given that California is the global gaming Mecca boasting more than 900 companies working on video games. Nevertheless, DMarket continues to maintain a major office in Kyiv where the main part of the development team is located. The company has its third office in London. DMarket is making waves within the gaming community but in many ways it is still a baby. Ukrainian gaming entrepreneur Vlad Panchenko founded the company as recently as May 2017. He managed to raise more than USD 19 million during two phases of an initial coin offering over the course of the year. Pantera Capital, a renowned investment firm focused on blockchain tech, was among the top contributors. The initial soft cap (the amount of gathered capital at which the ICO is considered successful) of USD 1 million was raised over the first 17 minutes of the crowdfunding event. However, when it comes to tech startups, project implementation success is not always a given despite funding success. Business Ukraine magazine took a closer look at DMarket’s recent advancements to figure out if the project is reaching its goals and meeting its obligations to investors. Virtual Items, Real Value As an in-game items monetization technology and service, DMarket offers the gaming community an online platform where gamers can trade in-game items, likecsgo skinsandDota 2 items, among themselves while developers gain revenue from every transaction fee. Someone who is not really into gaming might look down on such trading, assuming it is just another way for immature gamers to waste their time while not really generating serious revenues. However, such thinking is hard to justify when confronted by the relevant figures. Early this year, a virtual rifle from a game called Counter Strike: Global Offensive sold for record high price of USD 61,000. To be more exact, this was a so-called skin for a rifle, a graphic file that changes the rifle’s appearance without changing its gameplay parameters. This trade alone is a good reason to take the market for virtual goods more seriously. The sums involved can often be mindboggling. Total annual turnover in this fledgling industry is currently several billion dollars or even dozens of billions according to different sources. Most of those billions are circulating around a few games and many of the featured titles belong to a single developer. The in-game trading industry presently covers roughly 6% of the global gaming audience of 2.4 billion people. The overwhelming majority of gamers have no opportunity to resell assets earned or purchased in their favorite titles. This is where Vlad Panchenko saw a window of opportunity. “The most important thing is that DMarket’s solution benefits the whole gaming community, including developers and players as well as content creators and gaming entrepreneurs,” Panchenko says. Developers can now connect their games to the DMarket platform and receive fees from all the transactions of their in-game items among players, generating a potentially infinite revenue stream. Gamers, in their turn, get the opportunity to monetize their playing time by trading virtual goods acquired during game action. They can also create additional content and get their share of trading fees once a developer adds these user-generated items and makes them available for trading. DMarket distinguishes itself from the competition by leveraging blockchain technology that solves current issues of in-game items trading such as fraud and account hijacking. Once an item appears on DMarket’s blockchain, it gets its own hash that makes the item unique and its transaction history traceable. If someone tries to alter that data, any changes instantly become visible to everyone, preventing any kind of hidden intervention. Reaching Milestones Unlike most ICO projects, DMarket conducted its initial coin offering with the Alpha version of the platform already in place in October 2017. An up-and-running version was then presented in March 2018. One of the key added features was the Steam integration that allows platform users to buy, sell and collect items from popular games CS:GO and Dota 2 on DMarket. Since then, the platform has undergone regular updates, creating expanding trading opportunities for users who have already made around 200,000 deals. In June 2018, the company released its blockchain Wallet, an iOS and Android application allowing users to store and manage their funds, in-game items, and collectible digital assets. The next step for DMarket is to broaden the reach of the platform by getting more developers to sign up. The company has managed to enlist support from gaming industry giant Unity Technologies, the creator of the world’s most popular game engine. According to Unity CEO John Riccitiello, half of all games globally use Unity. Now all of those games, covering about 700 million players worldwide, are available for seamless integration into DMarket’s trading ecosystem thanks to the DMarket Integration SDK launched on the Unity Technologies Asset Store in August 2018. There has been a lot of other encouraging news coming from DMarket in recent months including localization of the company’s online platform into eight languages such as Russian, Korean, German, French, Portuguese, Spanish, Polish, and Turkish. The company is also strengthening its team. The latest big addition is new Vice President of Business Development and former G-cluster board member Sevan Kessissian, who pioneered cloud gaming as early as 2008 and is widely credited with bringing it to the mass-market level. These developments confirm that DMarket has come a remarkably long way over the last year, but an even longer path lies ahead as it seeks to change the entire shape of the gaming industry economy. The company’s ultimate goal is to revolutionize gaming as a whole by creating a global trading ecosystem for millions of players and thousands of games without any borders or barriers between them. Within this borderless ecosystem, Kyiv is set to play a significant role.
...read more