BMJ Score: 4.2
Quick Summary61 Investors read this
CommentaryThe gaming industry is a $465 billion market, and similarly to how gaming drove the use and interest of the internet, we predict it will do the same for blockchain. We have reviewed several gaming token platforms, and while this is a competitive and highly regulated market, PlayChip is leading the pack. PlayChip is unique because they currently have 800,000 users (and plan to grow to 2 million by the end of this year), and generate $430 million annually. The token already exists for users, and the goal of the ICO is to transform it into a utility crypto to drive all gaming platforms and expand the PlayChip ecosystem. Additionally, PlayChip has a solid team with successful track records in both gaming and blockchain. They also have big name partners including UnderArmor and the NBA. PlayChip has won several awards and is the sponsor of the Australian Rugby team which is owned by Russell Crowe. We believe that PlayChip is solving a valid problem in the gaming industry around payment speed, transactional security, and global interaction. Their solution combined with their lead time advantage and growing user base positions them for success.
- How to invest: To participate in the presale, you must first register for the process at the following link.
- Discount: June 1 - July 5 = 30%; July 6 - 31 = 25%; Aug 1 - 31 = 20%; Sep 1 - 30 = 15%; Oct 1 - 31 = 10%
- Eligibility: Residents of China may not participate.
- Token Price: 1 PlayChip (PLA) = $ 0.01
- Jurisdiction: Australia
- Payment Methods: USD, ETH, BTC, Bank Transfer, Credit Card
- Minimum investment: 1 USD
- Problem addressed/solved: Blockchain technology brings several benefits to the current sports betting industry, particularly through security, transparency, and reliability. Traditional sports betting systems suffer from a number of inherent challenges we feel will be overcome with the introduction of distributed ledger technology of blockchain.
- Target customers/customer/ segments/verticals: The PlayChip ecosystem will be made up of like-minded betters across the world. Anyone can join the platform and participate in the actions as long as they meet the country-specific qualifications required.
- Value creation: The PlayChip is set to disrupt the US $3 trillion unregulated gambling industry by providing trust and transparency, ease of use, lower fees, larger prize pools, and provably fair betting environments. The introduction of the blockchain will see the PlayChip offer a superior experience to traditional sports betting systems.
- Competition: Traditional competitors like Draft Kings, Fan Duel, and Bet365 have the brand recognition and market share in the current betting landscape. Other blockchain competitors all have unique value propositions that either include some or none of the features offered by PlayChip. PlayChip seeks to be a true, all-in-one platform for all betting needs. A detailed graph of PlayChip’s competitive analysis is on page 21 of the token offering document.
- Market size/potential: Global gambling turnovers are estimated to be as high as US $3 trillion in unregulated markets. Global Daily Fantasy Sport revenues are predicted to exceed US $14.4 billion by 2020 and online gambling is growing at 10.81% CAGR and exceeding US $500 billion. In addition, eSports is a booming industry with a CAGR of 18% over the next four years. In June 2018, the US Supreme Court paved the way for American nationwide regulation of sports betting by overturning a 1992 federal law that barred sports gambling.
- Regulatory risks: The gaming industry is highly regulated. This platform does not try to work around these regulations. Instead, it uses blockchain to help address regulatory requirements by providing greater trust and transparency.
- Investor value: The PlayChip ecosystem will bring real value to the PLA token as more users join the platform and utilize the token’s benefits. PlayChip already has multiple platforms using a “centralized” version of the token, meaning the value of the token may, in fact, have an immediate spike in value once the decentralized version is made available across all its platforms (1 million total users).
- Disclosures: PlayChip has a unique lineup of documents, offering a technical whitepaper, token offering doc, pitch deck, and a two-pager. Their website, unlike many ICO projects, has all the token sale details for each step of the ICO, along with a roadmap that clearly depicts where they’ve been and where they plan to go next.
- Token distribution: 25% public sale, 25% PlayChip Foundation, 25% platform growth and community development, 15% operational incentives, and 10% PlayChip bet float.
- Use of proceeds: 55% marketing, 30% development, 6% operations, 4% legal, 4% finance, and 1% other.
- Caps: Soft cap: $10 million USD; Hard cap: Max of $90 million USD
- Track record: PlayUp Ltd. (parent company of PlayChip) employs 42 fulltime development and operation staff across all their departments. They’ve had relationships with top corporations including UnderArmor, Freelancer, and Ernst & Young. The CEO, Daniel Simic, is an experienced startup entrepreneur, having been the Founder & CEO of Fantasy Sports Global Ltd. for three years prior to starting PlayUp. Simic also has a strong online presence with over 10,000 LinkedIn followers.
- Integrity: The PlayChip project clearly has a strong team behind it, not to mention the additional support of the parent company PlayUp, which already has a vast user base. Although the PlayChip project is an extension of a current business, it’s questionable whether they can make a smooth transition to the blockchain space with their new token. They’ve brought on many additional members for the blockchain/crypto side of things and will have to learn the space quickly considering their token will immediately be used by over 1 million players once it goes live.
- Daniel Simic, Group CEO (LinkedIn)
- Michael Costa, Group CTO (LinkedIn)
- Prashant Arora, Group CFO (LinkedIn)
- Ryan Bowman, Group CMO (LinkedIn)
- MVP: The PlayChip has already been formally adopted by the principal operational partner, PlayUp, where a centralized version of the PlayChip is currently operating with a fixed value of USD $0.01. Having said that, PlayChip has yet to function on the blockchain. They plan to implement that technology after the ICO.
- Token use case: The PlayChip will be an ERC223 Ethereum token that will serve as the exclusive crypto token of the PlayChip Ecosystem. The Ecosystem is currently comprised of seven live sports betting and fantasy sports platforms, with a user base exceeding 1 million and a combined current turnover exceeding USD $430 million.
- Value-added: The PlayChip will serve as a universal gaming token for an industry that was previously without one. A centralized ‘non-crypto’ version of the PlayChip with a value of US $0.01 is already in use and ready to migrate to the blockchain. The PlayChip allows players from all over the world to participate in live sports entertainment, connect with like-minded enthusiasts, and be rewarded and receive instant payments within the PlayChip Ecosystem regardless of location. Once decentralized, PlayChip believes their user base will grow at an exponential rate based on current traffic alone.
- Decentralization: Initial plans for PlayChip will not include decentralization, but they do plan to implement it later on, anticipating it will significantly grow user volumes of partnered operators, based on current site traffic.
- Token Supply: Max supply of 50 billion tokens (PLA)
- Technical difficulty/investment expertise needed: PlayChip simply wants to integrate their token and blockchain on existing betting platforms to address transparency, speed of transactions, and other common issues among traditional betting apps. Their two-pager does a great job of detailing the most important aspects of PlayChip.
- Halo effect: PlayChip’s initial partners are industry-leading gaming operators, delivering the PlayChip token to over 900k users from launch. A few of the operators include DraftStars, ClassicBet, Betting.Club, and 123Bet. Detailed information regarding each individual partnership can be found on page 16 of the whitepaper.
- Buzz: At first glance, the PlayChip project has average buzz online with 14.4k Twitter and 1.3k Facebook followers. They also have 16k members on their Telegram account. The massive differentiator is PlayChip’s operating business that has over 1 million users on 7 platforms in 70 countries. Their presence in online betting and eSports clearly increases their brand recognition and overall buzz.