Stagnant target market with signs of depression. The opportunity for large corporate players to enter the market.
Decentralization can not lead to a significant jump in the signal quality, since the mining capacities are often geographically tied to specific places, hence, problems with the coverage of some areas are possible. Restrictions on the minimum necessary Internet connection speed for service users play a deterrent role for the project development in less developed markets like LATAM, thus, the service can at some point have problems with scalability, not related to infrastructure. The value proposition level ischallenged due to the fact that the project did not attract the interest of major game developers (activision, EA, ubisoft).
Many aspects of the business model either put the company in an uncomfortable position before the partner publishers, forcing to coordinate each project placed on the platform with them and on their terms and share some of the proceeds, or they force to rely on the miners community with its exclusively speculative motives. Generating part of the revenue in the tokens form , even if the cost of services is fixed in dollars, exposes part of the company's revenues to the risk associated with the courses volatility of the crypto-currencies and the token itself. Mining of tokens can be more risky and less profitable than developers suggest - in particular, it is more discrete - thus, this video streaming channel for users can be unstable. Moreover, this business model element may not in principle take place , because in order to meet the standards of the infrastructure provider for the Playkey ecosystem - that is, the miner - another configuration of the equipment may be required, in other words, a direct transition from crypto-currency mining to PKT mining may not be possible that means additional costs for the miners, as well as the loss of precious time. Due to the chosen model, sales problems may arise because, because according to Playplay experience ,they drive mainly AAA- games with the rights to distribute which are extremely difficult to part by subscription publishers because of a conflict of interest.
The company is too ambitious in assessing its capitalization - an estimation is on the level of $ 150 million puts it on a par with the top ICO on the market - there is a risk of the company's capitalization collapse if its decision "does not shoot properly". There is no refund mechanism in case of ICO fails - collected funds leave the company, unrealized tokens are destroyed. Playkey allocates a significant tokens share - up to 18 million - for pre-sale, characterized by a significant (up to 35%) discount and 20% bonus which makes it attractive for investors to exit the secondary market for tokens. That infringes the interests of investors who entered the project later, given the volume of sales at the Pre Sale stage, the risk of negative impact of such speculation on the token rate. The part of expences, represented in the WP has already been included in the road maps, financed by the previous project investors, so the project takes twice as much money for the same thing.
Lack of experience in creating and scaling similar scale projects on the side of the company's management core leaders. Lack of specialists with block development experience. Regional education of the company's management core. The team has already been calculated in fairly simple terms from the point of view of marketing and experimentation -design situations, and it cost the time.The team task is much more complex now, and no one will wait for the solution.
According to the Newzoo report, the aggregate volume of the global game market in 2017 will be about 109 billion USD and by 2020 it will probably grow to the level of 128.5 billion USD, thus demonstrating,for the next three years, the CAGR of 5, 7%. However, the company target is the market for computer games, as for the consoles users, the solutions of cloud game services like Playkey are irrelevant because the consoles do not need a permanent components upgrade, since the games on them go out adapted for their technical characteristics. The last one, according to the forecast, will decrease by 600 million USD from 25.047 billion USD in 2017 to 24.4 billion USD in 2020. Taking into account that online PC gamers, which make up about 70% of the market in question, are also not interested in video games streaming, the lower limit of the estimated volume of the target market (TAM, total addressable market) for Playkey is about 7.5 billion USD, because the number of potential customers can include the lovers of online modes in offline projects for PC. We can conclude that Playkey plans to develop on a stagnating and even depressed market, which in the long term may negatively affect the company's growth opportunities. However, this can serve as a sign of the current model crisis of the PC video game market and the need for a new one, which Playkey offers in its decision. It makes little sense to look back on the predecessors failures like OnLive, because server capacity has increased since then, bringing the economy of gaming cloud services to a payback level and even profitability.
The demand and relevance of the product for gamers is supported by, on the one hand, a built-in updated game catalog, which includes the most popular AAA projects - this was made possible through the Playkey cooperation with Ubisoft, Bethesda, Capcom, Sega, etc. - and, on the other hand, by users who can remotely run their own games purchased on Steam, provided that they are supported by the service and their subscription distribution is agreed with the developer / publisher .The product has a differentiated tariff plan depending on the speed and quality of user internet connection: the minimum required speed is10 Mbps. At the moment the closest Playkey competitor among the commercial gaming cloud services for PCs is the LiquidSky platform, which has a weaker market position: its 500,000 + users around the world are not comparable to 1,500,000 monthly visits from Playkey users, besides the project itself is at the beta test stage. Thus, we can conclude that Playkey is several steps ahead of its main competitors, as they mostly do not have their own infrastructure, renting clouds from companies like Amazon, which doubles infrastructure costs and worsens the competitors economy.
At the current stage, Playkey implements the Iaas model - infrastructure-as-a-service - combining elements of a service with a shareware business model - for example, it is possible to play free of charge some of the" Nestimovskaya "online projects on the platform and of a commercial gaming cloud service with a differentiated tariff scale within the business model framework. "With the introduction of blockchain technology, the product content will remain the same, but the infrastructure decentralization will take place due to the miners involvement , i.e. professional suppliers of the project computing power , who will be able to work with users through a smart contracts system. This measure is designed to improve market coverage by servers, leading to better and more stable video-streaming. However, the main uncertainties associated with the project are hidden here: it is not clear whether the PKT mining (Playkey tocken) will actually be more profitable and less risky than the classical crypto-currencies mining - in particular, because the ecosystem is underdeveloped, the process itself may be too discrete; there can also be problems with coverability - it will have a limit, because the same farms for mining are usually located in quite specific places with the cheapest electricity: for example, in Irkutsk.
ICO is held in 2 stages, the tokens offer is fixed - 100 000 000 PKT - so that as the community's demand increases, their exchange rate will grow." Playkey collects funds for the following purposes: firstly, to integrate the blockchain into its own service. Secondly, to develop a decentralized, efficient, fast and secure P2P streaming solution that will allow the leasers to "lease" their capacities to gamers; Thirdly, to expand the active users base up to10 million people in such regions as USA, EMEA, APAC.The main uncertainties regarding the project financial side are related to the investors interests protection.
One of the main team assets is its experience, and in this sense, the project history itself gives us rather an ambiguous food for thought." On the one hand, the fact that the project, not havinh initially "guessed" with its value proposition to the end user in 2015 and having found only 200+ paying users, managed to adjust and within a year increased this indicator by 20+ points, which indicates the team flexibility, its willingness to change in the right direction — taking into account the survey context ,this is a plus. On the other hand, that has happened in a "traditional" in relation to the blockchain sphere already with the existing usecases of game video streaming - here we have a value proposition in the face of serious uncertainty, and it is obvious that investors will not give a second chance. The obvious team advantage is that its CEO has experience in IT management: from B2B (telecom) content-provider (Enaza) with its own gaming portal to a successfully sold business to a large IT group. The only really serious uncertainty factor in the Playkey team is the lack of own specialists with experience in blockchain-development, who are rare in the labour market. The team at this stage is trying to compensate for this gap by taking advice from consultants, as well as by making an independent attempts to understand the nuances of the blockchain-development.