MegaFans, in partnership with Launchpool Labs and CryptoSlate, is excited to bring you the first Project Report. This type of report provides an in-depth overview of projects that are at the forefront of the industry, by expressing an unbiased evaluation of the technology used, product maturity, team information, SDKs and code, an assessment of the risks and opportunities around investment in the project, and much more.
About MegaFans: MegaFans is building the world’s first truly global, mobile eSports community where 2.8 billion daily active users can play-to-earn, win, and collect real-world prizes such as cryptocurrency, NFTs (non-fungible tokens), gifts and cash. MegaFans offers turnkey software solutions for mobile games to increase monetization and retention with an enriched gamified eSports metaverse.
Launchpool Labs is a chain agnostic community-centric incubator, powered by Launchpool. Projects and Teams are incubated via a bespoke model that serves co-building the MVP and MVC (minimum viable community), as well as raising pre-seed / seed. Launchpool Labs has a variety of protocol partners, advisors, marketing & launch professionals.
After incubation, projects can run a pre-IDO on Launchpool’s launchpad, where everyone receives guaranteed allocations in private rounds (subject to KYC).
Roxana Nasoi, MD at Launchpool Labs & MegaFans Advisor said:
“We’re excited to bring MegaFans to the Cryptoslate community as part of the Project Report series. We know the CryptosSate team has put in a great effort, and MegaFans and Launchpool Labs offered their support in making this report a success.”
Disclaimers: MegaFans is part of the first cohort of projects incubated at Launchpool Labs (August 2021 – November 2021). CryptoSlate is a valued media partner for Launchpool Labs.
1. Introduction
MegaFans is a mobile-native gaming platform and eSports engine focused on hyper-casual and mid-core games. It’s a play-to-earn multiplayer tournament platform that lets users play mobile games and compete with people around the world to earn prizes such as cash, crypto, and NFTs.
The platform was designed to solve industry-specific problems, with the biggest one being establishing a profitable revenue model while keeping the games accessible to users. Separately, the platform has its own ad-marketing functionality that can be white-labeled, opening up new revenue streams and opportunities for companies to implement the Megafans SDKs into mobile products.
Making mobile gaming a real contender in eSports is the platform’s primary mission. To accomplish this, MegaFans provides professional-level tournaments with real prizes for mid-core games, targeting a large demographic that gets left out of high-tier platforms.
In this report, we dive deep into MegaFans and explore the growing blockchain gaming market, the technology behind the platform, the tokenomics designed to drive its growth, and the opportunities and features it provides to users.
2. Market
MegaFans is a blockchain play-to-earn mobile gaming platform, designed to expand the features traditional mobile games offer users., with several games already live (as MVPs) in the app stores (Google, Apple).
While a relatively new industry, even in crypto terms, blockchain gaming has already become a major driving force of the broader crypto market. The gaming coins and tokens that fuel the industry held a market capitalization of over $42 billion even in one of the harshest corrections in Q4 2021, with many analysts predicting further growth of the market segment.
In October 2021, over half of the blockchain industry’s overall activity came from gaming dApps. Rising interest in the metaverse and play-to-earn platforms were responsible for the huge growth in the gaming industry, which saw over 2 million unique active wallets (UAW) per day on average.
The global gaming market was valued at $173.7 billion in 2020 and is expected to reach a value of over $314 billion by 2026, at a compound annual growth rate (CAGR) of 9.46% in the five-year period. While this is an extremely ambitious forecast in the world of traditional gaming, these numbers are rather small when dealing with the blockchain industry. If it were to mimic the rapid growth seen in all segments of the industry, blockchain gaming could realistically exceed the valuation of traditional gaming.
Blockchain gaming already has a handful of large players that have shaped the way in which the industry is developing. The Sandbox, Decentraland, and Enjin have all positioned themselves at the forefront of blockchain gaming. All of these platforms tap into a specific market segment, offering programmable virtual reality platforms developers can build dApps on.
However, MegaFans wasn’t designed to compete with blockchain gaming platforms. It was designed to offer an alternative to the traditional, more two-dimensional gaming platforms such as Skillz, ESL, Sparcade, and Game.tv.
While taking up a significant chunk of the market, these platforms all share the same common problem—a lack of community engagement and a poor in-game ad revenue model.
3. Technology
MegaFans is a blockchain-agnostic platform designed to utilize a wide variety of networks. The platform’s backend was built on Microsoft Azure, while the front end was built on Unity and native iOS and Android. The technology underlying the platform means that MegaFans can be republished on HTML5 websites, ensuring easy integration into a wide variety of ecosystems. MegaFans is also white label-capable, designed to be added to existing interfaces.
In Q4 2021, MegaFans joined the Launchpool Labs incubator to receive strategic and technical support. The 90-day intensive development program helped the platform grow its community and establish a mobile-centric play-to-earn environment.
MegaFans’ innovation lies within the use of its MFANS token. While MFANS will be just one of many other cryptocurrencies and non-fungible tokens (NFTs) on the platform, will serve both a utility and trading purpose within the MegaFans gaming ecosystem.
Users will be able to stake the token to gain access to special tournaments, receiving bonuses and rewards for extended periods of staking. The tokens will be available on decentralized exchanges (DEXs), certain centralized exchanges (CEXs), or via private engagements.
The MegaFans ecosystem will also be built around the MBUCKS token, the protocol’s primary cryptocurrency. With 100 million tokens minted, MBUCKS is MegaFans’ main revenue source and will enable users to purchase MFANS and NFTs listed on the platform.
And while it saw its development pick up pace in the second half of 2021, MegaFans was first introduced as a concept in 2017. Colin Bracey, MegaFans CTO, and Jeff Donnelley, its current CEO, began working on the model for MegaFans at the end of 2017, spending most of 2018 developing and testing the prototype for the platform.
In 2019, the platform entered its alpha testing phase, transitioning to in-market beta testing with a feedback loop at the beginning of 2020. Throughout the year, the ad server and community platform were developed, creating a solid foundation for a more aggressive development pace in 2021.
Since the beginning of the year, blockchain, cryptocurrencies, and NFTs were introduced to the MegaFans play-to-earn environment, with the development culminating with the platform being incubated with Launchpool Labs.
MegaFans is aiming at a $2 million raise (preseed, seed, private) in Q4 2021, with a tiered valuation model ($2 million in pre-seed, $4 million in seed, $8 million in private). The funding, obtained through the sale of tokens, will be spent on user acquisition and retention, adding more free-to-play and pay-to-play games and tournaments, improving the UI and UX, adding intellectual property (IP) patents and trademarks, as well as further business development.
Despite requiring further development, MegaFans already hosts over 10 different mobile eSports games. The platform saw over 2 million installs across iOS and Android and has recorded over 200,000 monthly active users (MAU). There are several other games in the pipeline, including a white label solution for the first mobile mid-core game to host an eSports SDK (software development kit.)
Screengrab showing Candy Boo Tournament Edition, one of over 10 mobile games on MegaFans (Courtesy of MegaFans)
4. Tokenomics
MegaFans’ MBUCKS token has a total supply of 100 million. A total of 5 million MBUCKS, or 5% of the supply, is allocated to the Pre Seed funding round. The Seed Round will receive a 10% allocation, representing 10 million tokens, while the platform’s private investors will gain access to 15 million tokens, or 15% of the total supply. The tokens sold in the private, Seed, and Pre Seed rounds will share the same release schedule, with 10% released at the token generation event (TGE) and the rest vested over 10 months.
A total of 1 million MBUCKS will be available in the public sale. The tokens, which represent 1% of the supply, won’t be subject to a vesting schedule and will be fully unlocked at TGE.
The rest of the MBUCKS supply will remain with the MegaFans team and will be distributed according to the platform’s established tokenomics structure. A full 20% of the supply will be used for distributing platform rewards and incentives, while 2.5% will be allocated to liquidity provision. Additionally, 10% will be used for marketing, 15% to cover operational expenses, 11.5% to pay the team and advisors, and 10% will go towards MegaFans partners.
Tokens in each of these categories are subject to a specific release schedule. Tokens allocated towards marketing will be locked for 3 months and then released linearly over 10 months. Platform rewards and incentives will see 5% of the supply released at TGE and the remaining 95% vested over 10 months. Only 10% of the operations budget will be released at TGE and the rest vested over 10 months. The team and advisors allocation will be locked up for a minimum of 6 months or until the product launches on mainnet, and then released at a 10% rate every month. Partners will get an allocation with a 1 month-long cliff and receive it linearly over 10 months. The only category with 100% of the supply available at TGE will be liquidity, with provisions available to users immediately.
At TGE, the initial token circulation will be 9 million MBUCKS or 9% of the supply.
5. Team & Investors
MegaFans was founded by Colin Bracey and Jeff Donnelley. With 30 years of experience in development and three companies under his belt, Bracey currently serves as the company’s chief technology officer (CTO). A gaming and marketing veteran, Donnelley founded five companies and took two of them public in his 22 years of experience working in the industry. He is the company’s acting chief executive officer (CEO).
The two have worked in some of the largest tech and gaming companies in the world, including Orange, Motorola, Vodafone, Ubisoft, Jamcity, Wargaming.net, and Draft Kings.
MegaFans also has a dozen experienced advisors working alongside its founders and developers. The company prides itself on employing a record number of women advisors. Six women, each an expert in her own domain, bring experience from HSBC, Nixon, Rockstar Studios, Draft Kings, Disney, Boombit and Launchpool Labs.
6. Partnerships
The MegaFans SDK was designed to enable developers to turn any mobile game into a mobile eSports gaming platform. The platform is currently seeking to partner with mobile games looking to enter the eSports ecosystem.
Further partnerships can be made through MegaFans Cause Marketing feature, which enables developers to integrate specific targeting into their games to raise awareness and funds for non-profit organizations. MegaFans currently supports USO.org, Kiva.org, and the IGDA Foundation.
MegaFans is set to hold its token sales on Launchpool, after holding successful Pre Seed and Seed funding rounds on the launchpad’s dedicated Launchpool Labs section (open only for the most loyal community members, who receive NFTs as access-keys).
7. Audits & Security
MegaFans is currently in the process of developing and establishing a robust fraud prevention plan to ensure the security of its users and the funds circulating on its platform.
8. Product Roadmap
Since the beginning of 2021, MegaFans introduced cryptocurrencies and NFTs to its play-to-earn environment and incubated with Launchpad Labs. The platform tested various tournament structures to establish the best reward structure, distributing Bitcoin and NFTs as prizes for the tournaments held in its play-to-earn ecosystem.
Throughout the year, MegaFans significantly grew both its marketing and development teams, onboarding a dozen advisors to the company.
In 2022, the platform will focus on scaling and optimizing in order to increase revenue and onboard a significant number of new users. According to the company’s roadmap, it plans on onboarding 2 million users in 2022 and achieving between $3 million and $5 million in projected revenue. Between 2023 and 2024, MegaFans plans on achieving $50 million in revenue generated from up to 10 million unique users.
The company has so far successfully met all of the goals it set in its roadmap. The platform’s aggressive growth strategy has a goal of delivering $100 million in ARR (annual recurring revenue) with over 100 games on the market, 100 million installs, 10 million daily active users, and 2 million eSports players within four years.
The roadmap for MegaFans (Courtesy MegaFans)
9. Risks & Opportunities
MegaFans’ ambitious plans to capture both the mobile and blockchain gaming industries come with risks.
The platform was developed under the assumption that the wider market will adopt blockchain games and convert to the eSports model it offers to achieve monetization. It also plans on onboarding a significant number of women, which currently represent only a fraction of the eSports industry.
The biggest risk MegaFans faces is failing to reach its planned conversion rate. With a stagnating number of users, especially women, onboarding to its eSports ecosystem, its growth rate could take a significant hit.
A stagnating or declining number of new users could also impact its revenue, rendering it unable to sustain its growth.
If the platform manages to establish a consistent user acquisition rate, another roadblock it could face is a regulatory one. While the platform ensures the game outcomes are based on player ability, not luck, a lack of established regulations governing eSports could prevent its growth in certain jurisdictions.
MegaFans has acknowledged these risks and has established a strategy to mitigate each of these problems as they arise. To ensure it will be able to patent its intellectual property and avoid any potential lawsuits, it will hire legal counsel and purchase insurance against intellectual property theft.
In the case of failing to meet its conversion or growth goals, MegaFans will employ a “test, learn, optimize, or pivot” strategy, closely watching the market and adjusting its business strategies on the go.
At the beginning of December 2021, the company began gaining traction among users by distributing NFTs and other tokens as prizes to its players. MegaFans saw a large spike in in-app purchases (IAPs) in November and has surpassed their break-even goal for the return on advertising spend (ROAS) for the month. While IAPs aren’t the company’s only revenue stream, the growth in this segment shows strong community participation that could translate into other revenue streams as well.
10. Conclusion
While MegaFans was designed to address the monetization issues the gaming industry faces, its play-to-earn multiplayer tournament platform will certainly be what attracts the most attention. Combining blockchain technology and cryptocurrency-based incentives with the burgeoning world of mobile gaming has a high likelihood of yielding a successful platform.
If it manages to convert even a sliver of the user base mobile gaming has to blockchain-based games, MegaFans could position itself among the top-tier platforms in the industry.
Disclosure: CryptoSlate was compensated to create this report. For more information, click here.
This project report is brought to you in partnership with Launchpool Labs.
Launchpool Labs is the chain agnostic community-centric incubator, powered by Launchpool.
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