KamaGames, a big European operator of social casino games, said it is moving into blockchain and cryptocurrency with the launch of its own KamaGames Token.
The whole idea is to make it easier for the company’s more than 100 million players to purchase in-game currency for the social casino games, said Andrey Kuznetsov, CEO of KamaGames, in an interview with GamesBeat.
The KamaGames Token will use existing blockchain technology and the Ethereum cryptocurrency platform. KamaGames plans to sell $25 million worth of tokens.
KamaGames Tokens will be available as a collection of in-game chips sold in a bulk block at the best price possible. These chips will then grow in value every day. Players will be rewarded for leaving their tokens untouched, with an expected 11-fold growth if they do so.
However, Kuznetsov made it clear this is not an investment cryptocurrency. “This is a way for our players to buy in-game currency more cheaply,” Kuznetsov said. “We are not looking to raise funds.”
Above: Andrey Kuznetsov, CEO of KamaGames.
Kuznetsov said that cryptocurrency is becoming more popular in the areas where it operates, and players have been asking the company to support it as a method of payment for some time. He said the launch of the token will help the company attract new audiences and offer rewards to existing players.
The KamaGames Token has the functionality of a standard utility token and can be exchanged for in-game virtual currency (chips) only at any time using an official KamaGames player account. Players will then use their account to redeem the free chips awarded daily along with any other discounts, bonuses, or services that the company will make available exclusively to token holders in the future.
The KamaGames Token will deliver 11 times its original purchase value in virtual chips. This number is guaranteed and can be purchased for either local, conventional currency or via Ethereum coin. The exchange rate is guaranteed to be increased by KamaGames at a rate of 25 percent each month during the first 36 months and at a linear interest rate.
For example:
- At purchase, each token will equal 7,000,000 chips.
- In six months, one token’s guaranteed worth will equal — 17,500,000 (times 2.5).
- In 12 months — 35,000,000 (times five).
- In 24 months — 56,000,000 (times eight).
- In 36 months — 77,000,000 (times 11).
Holders of a KamaGames Token who have a player account can link their tokens to their account and receive daily bonus chips and any other discounts, bonuses, or services that the company may make available exclusively to token holders in the future.
KamaGames started in 2010, has more than 250 staff members, and has its corporate headquarters in Dublin as well as offices in London and Dubai. The company’s flagship title is Pokerist, and it was the No. 1 grossing app in 101 countries on iOS and one of the top five grossing apps in 45 countries on Google Play.
In 2017, gross revenue increased by 63.4 percent year on year to $57.5 million, compared to $35.2 million in 2016. The number of daily active users grew by 36 percent with the average revenue per paying user growing by 30 percent in the same period.
Q1 2018 has seen revenues increase by 47.9 percent compared to Q1 2017. More than 530,000 people play the company’s games every day. KamaGames funds itself.
Roman Abramenko, chief legal officer at KamaGames, said in an interview twith GamesBeat hat the company will comply with U.S. regulators, particularly since it will not allow people to resell their cryptocurrency. It can be converted only into in-game virtual currency, or poker chips.
Kuznetsov said the company will treat the revenues from the token sale as deferred revenue and recognize the revenue when the tokens are exchanged for in-game currency.
“We want to be on the cutting edge of technology,” Kuznetsov said. “We’ve decided to take this first step. If our players like discounts and offers, they may pay in cryptocurrency.”
If the players log in every day, they could be rewarded with extra currency. The cryptocurrency itself may keep the players engaged with the social casino games, and that could improve both retention and monetization.
“This is another instrument to retain players and make them more loyal to the game,” Kuznetsov said.
There is some risk that the additional currency granted to players could cause inflation in the game. But the company collects a fee (in virtual currency), or rake, when players play the games. This helps drain currency from the player base and keeps the economy of the game stable.
“In the worst case for us, if all players were token buyers, and they hold for 36 months, they redeem all bonuses, and they will get 11 times more chips than they can get day one,” Kuznetsov said. “That sounds like a huge inflation. But we believe that based on how players play, they will exchange tokens for chips regularly. We will be fine, and the economy of the game will be stable. We will issue five new games, including new slots. This will help us remove more chips from the game’s economy.”
Players can also earn more tokens if they encourage their friends to buy tokens.
“We are not targeting investors or people who want a speculative gain,” Kuznetsov said. “It has no investment value. I see it as a proxy for chips, a fancy way to store it.”
