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Startup of the day #15. “Investors are shocked: the price of a lead is ten times lower than in stores”. GamePad develops a gaming platform right in Telegram

Startup of the day #15. “Investors are shocked: the price of a lead is ten times lower than in stores”. GamePad develops a gaming platform right in Telegram

24 Jan 2020

In the XIX century, you were able to ride the dray and use it to transport cargo. In the “telega” (a shortened name for the Telegram application, in Russian equivalent it means a dray — Startup Jedi) of our time, it is possible to communicate, read the news, make money on advertisement, and recently, it became possible to play the games there. Quite possibly, that before, you have seen primitive textual games with chat-bots, where you have to choose case scenarios. It is as old as hills, we are talking about other stuff!

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GamePad is a Belarusian startup that creates a full-fledged gaming platform on the base of Telegram. There are real games with graphics that were written on the HTML5. You don’t need to redirect external links to play these games — everything happens in “telega”. How does everything work, how does the platform plan to make money, and what technical difficulties does the team have to solve — all these and even more Pavel Kuznetsov, CEO of GamePad tells in this interview.
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How it works

The evolution of Telegram is quite similar to the social network’s development history. In both cases, everything started with user personal accounts and messages. Then, groups/pages/channels with multimedia content started to arise. At last, games and applications appeared there as well.

GamePad launches via bot @GamePadBot and works on smartphones only. Through the API, the bot launches the platform straight in the built-in Telegram browser — a pop-up window. Physically, games are on another server but they work inside of Telegram.

When you click “start”, the bot offers you two options: “play” or “invite a friend”. You can send the invitation link in the private messages or in a group chat. On the platform’s main page there is a list of categories and enumerations of popular, new and recommended games. Currently, there are six sections: action, mosaics, casual, board, family and games for children.

GamePad takes into account the settings, that are set in your Telegram. If your messenger works in English, then all games on the platform will also be in English. In the future, games will be localized to all languages, that messenger supports.

Click the image to open GamePad's profile on the Rocket DAO platform

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Why is it difficult to create a gaming platform in Telegram

Not so long ago, the term “games in Telegram” meant two options.

The first option — messaging with chat-bots. It offers a specific situation and the user chooses case scenarios. The story can have a few plots and endings — those are dependent on what a person will choose on each stage. However, it is hard to call a full-fledged electronic game. These are just textual quests without graphics, that are more like board games or tests.

The second option — games on the external platforms. Such kind of services only offer games in Telegram, and if you want to play, you need to redirect to an external resource. It is an ad with an external link to other websites.

Earlier, it was also possible to create full-fledged games in Telegram, the messenger didn’t prohibit these activities. However, it is hard to circumvent restrictions connected to privacy and data security. We managed to create a product following all the rules of the platform.

This question is managed by technology, not money. Theoretically, any “pusher” can hire ex-developers of “VKontakte” or “Odnoklassniki”, and invest a lot of money in promotion. But everything, he will manage to do is to create something similar to our platform and buy the first customers flow. What’s next? How to legally and technically take into account all the existing and new Telegram rules? Almost nobody knows — there are no manuals. There are very few single-subject specialists who know “telega” that good. And the market itself was growing together with the messenger, as there were no other “telegrams” before.

What are these limitations? For instance, user cached data. According to Telegram rules, the game cannot save cookies. But how to record the history and reckon with the gaming process of your character without cookies? It is a stunt but we managed to release it.

Another legal and technical trap is that the games are appearing in the apps inside of Telegram. Some of them can (already or potentially) be set out on the market as a standalone project. And then Google and Apple can ban the application for copyright issues. Viber faced this problem when launched a game on their platform. They were pinned down to a fact: you delete games or we delete you.

We know why the applications, that allocated games, were threatened to be deleted. We know full-well twists and turns which can secure from the market ban.

We don’t have insiders in the Play Market or AppStore but we have precious experience. In our team, we have full stack developers, analytics and optimizers. These guys were creating bots for the arbitrage trade of crypto assets and transaction tracking in the Ethereum Network. What is more, and THIS is insane, they created textual games for Telegram with the audience of 2,8 million users (FunnyFermBoy). They were creating and promoting Telegram-channels from 0 to 100 thousand followers.

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How do we plan to make money

Since October 2019 we started to buy traffic: in total, we spent not that much money on this — around $400. But this let us attract 10 000 users which made purchases worth more than $10 000.

We earn money in three ways.

1. In-app purchases. People can buy crystals and spend them in any of our games on the things they want. This universal currency can be earned for free too, by completing tasks and inviting new users in the GamePad.

2. Advertising. It can be built-in in the game or it can be shown between the game-sessions.

3. Game subscription. With this subscription, the user receives special bonuses and can turn off ads.

According to the terms and conditions, developers get 50% of the profit from their games. Besides money, we offer access to the games’ audience. We have a separate group chat with a loyal community for each game. Developers can communicate with players, learn about their wishes, improve the product, answer questions.

The market is a large and growing one. MAU (Monthly Active Users) of Telegram in 2018 was 200 million people. This is the last official data from the platform. Recently, Pavel Durov (founder of Telegram) stated, that messenger’s MAU increases 50% a year. We can assume, that if in 2018 the metric was 200 million people, then in 2019 it was about 300 million, and till the end of 2020 it will grow up to 450 million people.

The chat-bot, that helps to launch GamePad, stimulates the sales and forms loyalty. It awards bonuses, sends news about releases, reminds about games, that a user still hasn’t tried but he may like them. The bot increases user involvement, stimulates them to try new games, offers bonuses for watching ads. And this is not just a simple point blank ads, that is a useful integration and users profit from it.

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How do we attract new players

GamePad has three main ways of attracting users besides “the marketing buzz” and organic growth.

1. Promotion in channels. Users, who remember primitive textual game bots, are thrilled by really visual games. This is an all-new product, wow-effect and — cheap leads. We did not buy a lot of traffic, but users didn’t cost more than 8 cents. The interest is high: from a channel with 10 thousand people, at least 1 thousand would try. And this is statistics about a channel dedicated to a different topic, not to games.

2. Cooperation with agencies. There are companies, that buy the targeted traffic from Telegram to the client. They form a strategy, select channels and place advertising. Working with them will be a bit more expensive but not that much: a new player will be worth 10–12 cents.

3. Promotion via a referral system. Alternatively to other social networks and messengers, in Telegram, there is a possibility of rewarding with real money for attracting “referrals”. This system really works and it can show impressive results, even better than usual advertising.

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What will the launch of TON change

This is not by accident that we started developing GamePad at this period of time — we were creating it ad hoc the launch of TON. It is a blockchain platform of Telegram messenger with a built-in Gram cryptocurrency to pay for the services on the platform. The team of the Telegram had to present TON in Autumn 2019 but the release is postponed to Spring 2020.

We thought that it would be awesome to create the very first game, where the coins of which will be available for TONs. We have already tested and adjusted Telegram tools for another cryptocurrency, and as soon as the technical documentation of TON is published, we will implement it on our platform.

Back to 2018, Telegram has already tightened up various payment options — Yandex.Money, Sberbank and etc., in general, there are about ten services. Similarly to our gaming platform, there is a possibility to create internet shops on the base of Telegram. Users will be able to choose and buy the product right in the messenger. Possibly it will be possible to make payments with Gram-tokens without entering the credit card details, as soon as TON is launched.

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How can we make an impression on our potential investors, and why won’t Telegram “strangle” the platform

At the end of 2019, in the partnership framework with Rocket DAO and Russian-speaking Cyprus IT-community, we went to this sunny island and pitched our project there.

People didn’t have any doubts about Telegram’s bright prospects. That’s why estimates and statistics were not of great interest for the audience. But everyone was wondering where did we get this idea that the attracted user could cost that cheap and a referral link could attract so many players. Potential investors were shocked: the price of a lead is 8 cents! At this price, for $1 thousand we will be able to attract 12.5 thousand users from advertising and about 50 thousand by referral links.

It was easier to get in touch with Telegram than we thought. If before going to Cyprus we had no possibility to do that at all, then after a pitch in Limassol, there are already two people who wanted to help us to reach Telegram’s executives.

Why can’t Telegram steal the idea and realize it on their own?

Pavel Durovalways affirms that the messenger will never be making money on advertising — it is one of his business mottos. However, it has no issue for Telegram to have a partnership with an agent, who will make money on advertising. If messenger wants to do something like this in the future, up to that time, we will have a large audience. And it will be easier to buy us out, then to close us down.

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Plans for platform development

In the nearest time, we will add payments through one of the global payment systems. We will also add popular RPG, strategies, hyper-casual, card games, dominos, roulette and etc. to our platform. Those will be the games that are exceptionally popular among social network users.

We will create a system of rewards for top players. Also, we will send more traffic to the platform, so we would better understand user preferences and be fully prepared for the Rocket DAO acceleration program Startup Training Camp.

Rocket DAO expert evaluation helped us to focus and set the right goals. Before it, we wanted to pay more attention to the technical part, but with the help of evaluation, we understood that the main thing is to add more interesting games on the platform in the short period and show investors our economy model. In our case, the information about the cost of one user was more important than quick money from advertising.

Click the image to see the results of the evaluation

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What are we looking for right now:

1. Alternative marketing solutions with advertising and platform promotion. If somebody has any unique experience and interesting ideas — we will be happy to work with you.

2. Sales managers and marketers, who will attract game developers. Still, we do not have enough market power, and that’s why some game developers may not take us seriously. However, the more figures we show them, the more interested they are.

3. Contacts of Telegram’s executive management and Pavel Durov himself. What we are developing can be interesting for the messenger.

4. $200 thousand of investments for the 10% share in the company. $150 thousand we will spend to buy traffic and other $50 thousand — to pay salaries. There are ten people in our team and we have been working on our own money for a year already. It is hard but we believe in our product and bright Telegram prospects!

24 Jan 2020

 

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