Quepasa Corp (QPSA) is First Social Network to Bring Skill-Based Gaming to Their Users
Skill based games are going to be the next generation of monetization on the net. A skill based game is when skill is more predominant then chance so it’s not considered online gambling. For example, if I’m playing an online game or video game against someone else whatever the type of game, we both put $10 on the game and if you win you might make $9 (the remainder going to the facilitator(s) of the match). Quepasa Corp announced this morning a partnership with Titan Gaming to integrate Titan’s skill-based gaming technologies into Quepasa’s Open Social Developer platform. Game developers are looking for more ways to monetize these games and skill based wagering is the answer. So in the above scenario, 6-12% of the transaction goes to the facilitator(s). So on a $10 bet, it pays out $8.80-9.40 to the winner and $0.60-1.20 is split between the Game developer, Titan Gaming, and Quepasa Corp. As you can imagine the profit potential for the facilitators is huge. Skill Based gaming is drawing a lot of attention, and just this week Sir Richard Branson became the latest investor to jump into the industry by enabling video gamers using Xbox360 and PlayStation 3 to place bets on outcomes. Branson’s Virgin Gaming will allow skill based players to put money into a pool using Virgin’s collection service and the winner of the match collects the winnings (minus the facilitator fee). With over 40 million video gamers playing over the internet the profit potential is staggering for Virgin Gaming. The same conclusion is made when you adapt skill based gaming to social networks like Quepasa.com. If you have 1 million players wagering just $1 per day, that is $30 million per month in skill based wagers. That is a lot of transactional revenue to Quepasa.com (QPSA) if they get 2-3% of the transaction at 99% margins. The funny thing is that Quepasa.com is the first social network launching skill based games, not Facebook, not Myspace……….Quepasa.com
Disclosure: LONG QPSA
You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
I ran the numbers like you did using five million dollars a day bet. QPSA getting 1/4 of the fee for that is a huge number. Is five million a day too much, I don’t know, but with 25 million plus members it doesn’t seem out of the question.
From teh Titan web Page:
We’ve heard the rage of micro-transactions and pre-roll ads for games but the market has demonstrated that skill-based gaming creates up to 10X these other revenue streams. Titan enables your game with the transaction, matchmaking and legal framework to accept and profit from skill-based gaming.
Steve:
Yeah I agree it could be a very profitable endeavor for QPSA.
QPSA is doing a good job at adding more and more monetization hooks into the network via DSM, Social Games, Skill based games, and online dating.
IC
Ian, I’m curious as to your opinion: do you think QPSA or GORO is a better buy at the prices they are now at, being their respective prospects over the next 6 to 12 months. I kinda think QPSA may be, now that it’s dipped below $4, and given the aggressiveness with which they are pursuing various monetization hooks. Seems to me that they could start to explode with revenue in about 6 months adding to the already significant upside.
On the other hand, GORO is about to finally go into production, and gold is hitting new highs virtually every week, with no end yet in site. When I look back at your summary of GORO’s potential PPS, which if I’m correct was done with gold at an estimate of 1000, it seems to me that it could be at least a triple within a year. Maybe not as significant of an upside as QPSA… but maybe a bit more certain/safe?
Also still looking at maybe adding a little to my very small GAXC position over the next few weeks if it continues below .90, though I’m less confident in their near term (relatively speaking) upside… seems a bit more speculative to me.
anyway… uh… yeah….
I usually try to stay away from those decisions. I like both GORO QPSA even add in there BULM, GAXC, and VSRV. They are all somewhat very different when it comes to growth drivers and catalysts. You just buy a little of each.
IC
I get ya. Guess that’s too much trying to ‘time’ the market.
One more question though… up to what do you consider GORO a good buy? I think I’m looking to get in as long as it’s under $12.
Tried to get in to VSRV a couple of weeks ago… but after my bid sat there for a week with no takers, I decided to pull my order and place the money elsewhere. I’m continuing to keep an eye on it though, and as soon as I see volume start to pick up better I’ll try to get in again.
Yeah I think that is the proper thinking on GORO. I bought some around $11 in my SEP IRA.
VSRV will report its Q4 (March 31st year end) by the end of the month, so that will give a few more data points for valuation. I’m hoping they give guidance as well.
IC
[...] http://iancassel.com/2010/06/16/quepasa-corp-qpsa-is-first-social-network-to-bring-skill-based-gamin... [...]