GAMEE, supplying millions of users to blockchain gaming, is severely undervalued?
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GAMEE, supplying millions of users to blockchain gaming, is severely undervalued?
Gamee offers investors multiple high-growth megatrend opportunities, including play-to-earn, social networking, user-generated content (in the roadmap ahead), and the metaverse (G-bots).
Navigating Web3 tides with focused insightsAuthor: 3CommasCapital
Founded in 2015 in the Czech Republic, GAMEE is a highly engaging hyper-casual gaming platform. It currently operates as a subsidiary under Animoca Brands. Users on GAMEE can complete game tasks, participate in competitions, and earn rewards from various activities. GAMEE currently has 25 million registered users.
On the GAMEE platform, the GMEE token will be awarded to players as in-game prizes. The token will be used to pay entry fees for special tournaments and will also serve governance functions. Governance rights granted to players include allowing token holders to vote on decisions such as the "GAMEE Game Roadmap" and "distribution of reward pools."
In October, GAMEE launched Arc8, a mobile esports platform that already has 1.3 million registered users. Arc8 offers various casual games, enabling players to compete in one-on-one matches and team tournaments to win GMEE tokens as prizes, powered by Polygon.
Below is an investment analysis of GMEE written by 3CommasCapital, provided solely for educational purposes and not as investment advice.
Investment Highlights
(1) Gamee offers investors exposure to multiple high-growth megatrends, including play-to-earn, social networks, user-generated content (in later roadmap stages), and the metaverse (G-bots).
(2) Gamee has an experienced management team with a proven track record in developing highly engaging casual games.
(3) The successful launch of the Arc8 application demonstrates the team’s gamification expertise. Converting miners into players ensures a large Day-One DAU (daily active users) base upon game release.
(4) As the company transitions its existing Gamee users to Arc8, we anticipate strong growth momentum, further amplified by new product launches such as G-bots, creating upside potential.
We believe that execution alone on this model can deliver consistent long-term returns for GMEE token holders.
Our early outlook on Arc8 suggests GMEE may be significantly undervalued at a 1.5x fully diluted market cap-to-revenue multiple.
Overview
GAMEE has become one of the largest operators of free PC and mobile casual gaming platforms. By offering accessible, popular “snackable” games, the team has grown its user base to over 30 million players in seven years.
Following last year's partnership with Animoca Brands, Gamee will launch its own blockchain-based application offering compelling, mass-market pay-to-play casual games.
The next-generation app, Arc8, will deliver high-quality casual games with a seamless user experience, bringing casual crypto gaming to the masses. The GMEE token will function as both an in-game currency and governance token. The growth roadmap includes the launch of NFT G-Bots, which will open up new opportunities for game development.
Key Points
Gamee’s management team consists of seasoned gaming professionals with valuable experience in developing free mobile casual games (Gamee). The success of the Gamee platform, with over 30 million users and 5 billion engagements, demonstrates strong capabilities in content creation and user retention.
We are bullish on the launch of Arc8. The pre-game mining application serves as a smart funnel to build a ready-made user base while quietly introducing players to crypto wallets and staking. We highlight the significant potential to migrate a large portion of existing Gamee users to the Arc8 platform.
Long-term, we expect the GMEE token to drive deeper engagement through governance features and the ability to purchase land, where users/developers can launch their own games and tournaments.
Investment Drivers
Unique play-to-earn flywheel returning prize tokens, boosting engagement and retention
Platform optionality from game partnerships and collaborations
Exciting product roadmap, starting with G-Bots driving further upside
Upside Opportunities
Faster-than-expected user acquisition and engagement
Call options from partnerships, collaborations, and sponsorships
Successful launch of G-Bots NFTs
Downside Risks
Slower player engagement due to unfamiliarity with crypto
Slower-than-expected rollout of new platform games leading to lower retention
Competition from new play-to-earn casual games
Revenue Scenarios
Our initial revenue model is “work-in-progress,” with many assumptions likely to be adjusted as the game launches and scales. The revenue model should account for high uncertainty around core assumptions. That said, we have ignored all potential benefits from additional marketing sponsorships, partnerships, and future game expansions. We are optimistic about the scale of the G-Bot NFT opportunity.
According to Newzoo research, the mobile gaming market generated approximately $90 billion in revenue last year. In particular, casual games have seen remarkable growth over the past few years. Casual games are simple and engaging but often struggle with long-term user retention. Gamee has years of experience developing casual games that use prize mechanics to boost retention. We believe the play-to-earn app Arc8 will elevate engagement and retention to a new level.
Our Base Case
ARC8 drives user growth by converting all "mining" app users and migrating prize app users to ARC8. We project Arc8 growing to 2.9 million users within one year and note that the mining app has already exceeded all internal expectations. We assume time spent on the app remains constant (30 games per day), but player spending increases moderately with the introduction of tournaments.
This leads to a projected revenue of $575 million for FY22, implying a 1.5x sales-to-fully-diluted market cap ratio. For reference, Axie Infinity trades at over 12x sales.
Arc-8 Revenue Scenarios
About GAMEE
Gamee is a subsidiary of Animoca Brands—GMEE tokens and the new blockchain gaming application Arc8 will be deployed on Polygon.
Entertainment Platform includes:
Prizes/Gamee.com: A free mobile gaming app (mobile and web) featuring 80 casual games with an ad-supported business model. Since 2015, Prizes has attracted a massive gaming audience of over 30 million users. GMEE tokens will be introduced to reward players and help free gamers transition to Arc8.
Arc8: Skill-based gaming experiences in casual game styles. The experience is powered by GMEE tokens, used to pay tournament entry fees and distribute rewards.
G-Bots: Robot-themed collectibles on the blockchain, upgradeable and tradable, granting rewards to owners when playing on Arc8 and serving as playable characters in their own dedicated games to earn more (Roadmap: Q4 2021).
ARC8
Arc8 is a mobile esports platform where players earn rewards based on skill, with GMEE tokens serving as the core in-game currency used to pay match entry fees and claim winnings.
Initially, Arc8 will offer predefined 1v1 matches and team tournaments, but overtime will expand to include community-driven games.
Unique Launch Strategy
Launch Phase: The Arc8 Mining Network is the first taste of the Arc8 gaming experience, allowing users to mine GMEE tokens while waiting for the full release of the Arc8 platform.
This app will run for four weeks (until October 20) and serve as a waitlist to gain exclusive early access to the Arc8 platform. On October 26, users will gain early access to the full Arc8 app. Miners will hold their tokens in their own Arc8 wallet and can use them directly on the platform.
The plan was to acquire 100,000 users after the 4-week mining period. However, within just one week, over 1,000,000 users had already registered! During this pre-mine phase, a total of 2 million GMEE tokens will be distributed to users.
Additionally, Arc8 has already climbed the rankings, reaching #1 on Polygon and #4 among all blockchain applications overall.
Arc8 will launch with 10 original games and will regularly update with new content. Over time, up to 30 games will be available to play.
Arc8 will initially offer predefined 1v1 matches and group tournament experiences, but overtime will allow anyone to start esports-style matches in specific games with custom prize pools for selected friends or community groups.
Later, Game Arena (LAND) will be a non-fungible token representing gaming real estate on Arc8. By owning such NFTs, players will have the opportunity to create and host custom tournaments, select games, and set prize pools, thus tailoring the Arc8 experience for specific communities.
GMEE tokens power the core experience of 1v1 matches and tournaments. Entry fees for matches are paid by each player in GMEE tokens, and winners receive GMEE tokens as prizes.
Tokenomics
GAMEE Token (GMEE) is an ERC-20 utility token designed to serve as the currency for purchases, utilities, rewards, and actions within supported play-to-earn games offered on Arc8. The GMEE token uses Polygon as its Layer-2 scaling solution.
After the first 12 months of token issuance, circulating supply will reach up to 33% of the total supply. However, actual issuance of GMEE is expected to be slightly below the unlock schedule. Game operations, marketing, and rewards will not be released until new gaming products are ready for growth and expansion.
Roadmap
Q1 2021 — GMEE Lightpaper Release / GMEE Public Presale
Q2 2021 — Staking events
Q3 2021 — GMEE listing on Bitmart, Sushiswap, Bridge to Polygon
Q4 2021 — Full Arc8 Launch, G-Bots Presale
2022 — G-Bots standalone game, Arc8 Land sale
2023 — Arc8 Live multiplayer games, etc...
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