Last Updated On November 16th, 2018
Refereum refers to a decentralized gaming marketplace that uses a referral marketing system and rewards its users. It eliminates third-party intermediaries that act as a bridge between video game developers and their target audiences making it easier and more cost-effective for them to market and sell their games. In this Refereum review, we will discuss the news of its ICO, how it works and how it uses blockchain technology to change the business.
The gaming industry is worth more than $100 billion. A close look into the budget allocation within shows that less is being spent on video game development and more on marketing. Additionally, the top platforms take huge cuts from all sales and this greatly reduces developers’ earnings.
The Marketing Shortfall
The cost of acquiring customers into the gaming industry is consistently rising and is currently around 113% annually. The most surprising bit is that its consumers are in fact more than 2.2 billion at present. However, studios dedicated to video game development must invest an extraordinary amount of capital in order to reach them.
In the past, it used to cost only about a dollar to get a customer for mobile or desktop games. The current rate exceeds $15 and in order to be successful, a video game developer would have to depend on sponsored social media content. But this method too is losing its touch with more tech-savvy customers losing interest in such content.
The advertising networks that are eating up into developers’ profits are in some cases subpar or target the wrong audiences limiting their effectiveness. This makes them spend a lot of time and effort to secure new players. Additionally, tracking the conversion rate and return on investment on any particular method proves challenging because there is no direct connection between new players and the ad networks.
Developers now have to rely on mainstream companies like Facebook and Google to create a general hype around new and existing video games because targeting specific audiences is proving to be a major challenge.
Game viewers are gradually shifting away from the mainstream platforms like television to YouTube. And with this change comes an alteration also on the type of content they watch. Marketers are trying to move with the masses and they understand the kind of hold that an influencer has over such audiences.
Influencers share content with the target customers and interact with them so as to draw their attention to the games they want to market. Their role is indispensable and without them, the chances of having a successful game are very low. Unfortunately, the rewards they get are not proportional to the size of their following.
In addition to this, popular platforms like YouTube keep changing their terms and policies to the detriment of these key players. Monetizing content these days is becoming increasingly difficult and requires the use of multiple tactics in order to gain traction.
For game developers, singling out influencers and negotiating legal and other terms with them is both costly and time-consuming. To make matters worse, the results of such efforts are mostly unpredictable. There have also been cases of a scammer posing as an influencer in a bid to make a quick dime by selling game redeem keys.
Developers also have a limitation as to where they can sell their products. There are massive digital distribution conglomerates that hold a dominant position in the market. But these impose revenue cuts of up to 30% and really thin out the profit margin for the game creators.
They do not offer a transparent model and leave developers out in the dark. They also keep shifting goal posts from time to time to suit their own interests. This makes it particularly hard to get a game accepted onto any one of those platforms.
This level of control has led to a stifling of creativity and has forced many creators to toe the line at the expense of originality. The result is a market saturated with numerous sequels that easily bore a gaming enthusiast.
The Refereum Solution
The Refereum model solves the issue of inefficient advertising, cuts down costs and subsequently increases developers’ return on investment (ROI). Developers, gamers, streamers as well as fans who love to watch the games are all brought together and can seamlessly interact on the platform.
This crypto model also reduces the common barriers faced during game development by using the innate features of the blockchain technology. The platform’s concept makes it easy to buy using crypto and it also incentivizes its users for participating in the network and making referrals.
The overall objective of this is to create a three-pronged system whereby developers, influencers, and gamers all have ways to make money. The project already has a demo model on the test net comprising an open-source game that showcases the highlights of Refereum. Their gaming website is also complete (visit Earn.Refereum.com), and existing gamers and streamers on other platforms like Twitch/Discord earn incentives for playing games.
How Does Refereum Work?
Influencers and developers lose a lot of their earnings to the aforementioned third-party intermediaries. They basically operate at their mercy and as the industry would have it, making money without them is almost impossible. At the end of the day, no one apart from these middlemen reaches their full earning potential from the current gaming industry model.
Refereum proposes a solution to such problems using an open-market strategy. Their approach is designed to transcend all barriers from language and geographical borders to influence levels and many more. What this means is that anyone on the platform can participate in the ecosystem without having to have a huge internet following. Fans who share games with their friend get rewarded for their effort which basically means that a user does not have to be a big-time influencer to make money.
Developers have the freedom to decide what qualifies as a referral. For instance, they could count all installs and reward them, or they could decide to track those who not only install but also interact with the games installed. They might even single out gamers who spend considerable time playing. They also have the liberty to offer rewards based on specific activities.
Refereum is built on the Ethereum platform and makes use of smart contracts and an ERC-20 token framework. The system is already functional and the participants can use different Ethereum clients to gain access and operate on the platform.
Buying games is simplified using the MetaMask Chrome plugin. It only takes two clicks to make a purchase. Moreover, users can sign their own transactions on the blockchain and manually make a purchase using the TransferTolcap function on the smart contract. Depending on their level of expertise they can either go for full control or ease of use. When a transaction gets confirmed, the game key will appear on the user’s web account.
This blockchain contains a feature known as Inter-exchange Client Address Protocol (ICAP) that makes it possible to transfer funds between third-party accounts. This makes it possible for the platform to safely track the source of an ETH transaction without requiring a user to give any private details. When a user specifies the game they intend to purchase, an ICAP address is generated. Using MetaMask will spare the user from having to manually input this address as the transaction is automatically generated for review before a user sends it to the blockchain.
The Refereum token is known as RFR. Its main purpose on the network is to serve as a utility medium and to allow for value transfer. Its cash value arises from the fact that it can be used to purchase in-game items and other virtual coins.
The RFR token will make it possible to execute the decentralized referral marketing concept as well as the reward system on the network. Sharing links for listed games with followers and friends will earn users tokens that can be used to buy more games or be traded for cash.
Apart from making purchases, the RFR token will also be used by developers for fee payment so that their games get featured on the inbuilt marketplace and get more traffic. Additionally, the developers can reward influencers who help sell their games using RFR tokens.
Another use of the token is that it can allow those who sell digital goods on the platform to pay for listings which are distributed to others in the community. These uses for RFR tokens will generate demand for the currency over a period of time especially as news spread and it gains adoption.
Capitalization and Allocation
The total supply for the RFR ICO token is 5 million tokens which have already been premined. Exactly 50% of this will be available during the upcoming token sale. This is a total of 2.5 million tokens. During the ICO, every token will be sold at $0.01 so as to reach the token sale hard cap that has been set at $25 million.
The remaining 50% of the tokens will be allocated as follows:
- 25% for platform development
- 10% for incentivizing game developers
- 10% for the platform’s team
- 5% for incentivizing the platform’s influencers
The Refereum team is comprised of individuals with long years of experience in the gaming industry as well as others versed in digital advertising. Here are the main team members and a little bio about them:
Dylan Jones – Founder (LinkedIn)
He has a history in game development having founded the Gamenest platform and helped design a number of games for mobile devices and Facebook. He has been advocating for the use of decentralized technology in various parts of the world and at meetings in San Francisco.
Alistair Doulin – CTO (LinkedIn)
He comes with 15 years’ experience as a software developer, team manager and large systems’ architect. One of the most prominent games he has worked on is Battlestar Galactica. He also runs a game development studio in Australia known as Bane Games.
Oleskii Matiiasevych – Smart Contract Author (LinkedIn)
This is the man behind the development of Refereums’s smart contracts. He works at Ambisafe as a smart contract engineer and also acts as a white hat hacker. In the July Parity multi-sig incident he recovered ETH worth $1.4 million.
Other key names behind Refereum include Sloane Earl, a business developer, and advisors Ian Dunlap, Koh Kim and Andrii Zamovsky.
Real Market Challenges
The crypto model focuses on an actual gap in the market and this gives it a high likelihood of success. It addresses major pain points for a majority of the parties in the gaming business.
The fact that the model is built around referrals creates an infinite feedback loop that is bound to generate growth on the network. This concept is linked to numerous success stories since people take recommendations from friends more positively than other marketing gimmicks. It could, therefore, lead to widespread adoption of the platform.
The fact that the project already has a working product in use on the biggest streaming platform, Twitch, offers motivation for investors. Additionally, the platform is integrated into Unity, the most frequently used gaming engine.
The RFR token already has numerous uses on the platform. Having such utility attached to a token creates demand for it and increases the chances of having its value appreciate.
Notably, Refereum has already secured a strategic partnership with Twitch, the top global website for streaming video games. This is meant to increase the adoption of the platform. It has also partnered with Unity, the most frequently used gaming engine globally. This second partnership is assisting the platform to create an in-game bounty structure.
The project roadmap is not clearly expounded. For instance, it has a single milestone for the year 2018, adding new features and scalability. This makes it difficult to assess if the team’s strategy is well thought out or not.
The main stakeholders in the existing gaming industry are all losing revenue and are therefore unable to reach their potential. The business is full of opportunities and is a major player in today’s’ economy.
The Refereum crypto model seeks to empower these stakeholders, developers, video gamers and influencers so that they can make the most from the thriving business. It uses the innovative blockchain technology to make this possible and it aims to see further growth in the gaming industry. You can visit the Refereum website and read the Refereum whitepaper for more information about its ICO and milestones.