The mobile games industry, particularly in Asia, is projected to go forge on from already high revenues to even larger generated income from a society obsessed with their smartphones. China, Japan and the Republic of Korea make up 3 of the top 4 mobile game revenue countries, with the U.S. coming in at third overall. And those markets are growing very quickly.
Meanwhile, cryptocurrencies are disrupting the gaming world, particularly with regard to making games easier to distribute. I recently spoke with Matej Michalko, a co-founder of gaming marketplace operator ALAX, which is hyper-focused on furthering the connection between blockchain and mobile gaming.
How exactly do you plan on merging the mobile game experience with blockchain innovation, and is this already occurring at all in the marketplace?
Michalko: We are not saying we are the first project in the marketplace offering an app store for mobile games, but compared to our competitors we are one big step ahead. The ALAX app store will have instant access to millions of end-users thanks to being pre-installed on the smartphones directly by the phone manufacturers. In other words, we won't rely on the necessity to have our app store downloaded by the users.
ALAX has already signed an LOI with Gionee, one of China's and India's largest smartphone manufacturers who shipped nearly 33 million smartphones worldwide in 2016. Owners of new Gionee smartphones will start using it immediately, with older models moving to the ALAX platform in line with regular updates. Having many other LOIs with mobile phone manufacturers in the pipeline, Gionee is just the tip of the iceberg.
Besides the above mentioned advantage of a competitive edge, ALAX is not using the Ethereum blockchain or the Waves platform like everybody else. We are using DCore, the blockchain developed by DECENT, whose architecture is designed to have a high transaction speed and the ability to process a high volume of transactions. DCore uses the Delegated Proof of Stake (DPoS) mechanism in order to achieve the consensus of various nodes in the network, which is also the fastest, most efficient, most decentralized, and most flexible consensus model available.
The settlement time of the transaction is 5 seconds on DCore compared to Ethereum's 30 seconds. DCore has a processing speed of two thousand transactions per second, but as they are still in the process of conducting benchmarks, the final number could be much bigger.
Which mobile games are you already working with and what are the challenges with onboarding developers and users?
Michalko: Developers can upload their game content just like to Google Play; however, the ALAX store will be available on all of the Asian markets contrary to Google's product. Besides the fact that we will take over Dragonfly's network of game developers, through which they are reaching up to a 100 million monthly active users, we also have multiple LOIs signed with new game dev prospects and many other in the pipeline.
There will be minimal changes when it comes to the interface of the store. Even if it will be backed-up by blockchain, It will work the same way as before. There will be only one important change -- it will start bearing the promised fruit. Developers will have instant access to their revenues, which can now take up to 6 months, and unbanked consumers will have cheaper access to the content as the payment intermediaries, withholding the high fees, will be eliminated.
How do you value the industry as a whole and what is your business model with regard to earning revenues from facilitating transactions?
Michalko: In Southeast Asia mobile gaming revenues should reach USD $2.4 billion by 2021. Looking at the prognoses from the global point of view, they keep showing arrows pointing up, expecting those revenues to exceed USD $46.1 billion.
ALAX's point of interest are the emerging markets and the whole project intends to zoom-in on a specific part of this market -- the 'unbanked' consumers. We are talking about 2 billion people all over the world who do not have access to credit or debit cards, yet do have relatively easy access to cash and 3G/LTE smartphones.
Providing those people with an alternative way to purchase games or apps, other than make payments using prime rate SMS, can reduce the final price of the content by 50-70%. This is the commission that mobile network operators are usually taking.
When do you envision the prototype for the platform to be available and why do you believe people should participate through the ICO prior to a prototype being available?
Michalko: The MVP should come out in the upcoming weeks and we expect the prototype to be ready by the end of Summer 2018.
ALAX is not firing blind. It is not creating a completely new store. ALAX is scaling up the blockchain platform in a way that it will be able to replace the existing Dragonfly's store. It will look and work the same way, more or less, but the new version will be more powerful thanks to the blockchain functionalities.