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From cloud to blockchain, Russian startup aims to make online gaming accessible to all

The Russian gaming technology startup Playkey, which has asserted itself as notable player on the global cloud gaming scene, was born just five years ago out of a child’s dreams

Feb 23, 2018
Its founder, Egor Guriev, has been passionate about computer games since he was a schoolboy, when he saved on meals and textbooks to buy his favorite games and gaming hardware.

Guriev’s idea was to make online gaming accessible to the largest possible number of people – including those whose low-performance computer doesn’t support the latest video games. Each new generation of games requires stronger computer capacities – but gamers can’t afford upgrading their machine or buying a new one all the time.

Guriev and his team found a solution in the cloud. For a fee of $10 or $20 per month, the Playkey application can be installed on any computer, leveraging cloud capacities to run even the most sophisticated games out of the Playkey roster.

Playkey is not the only provider of cloud gaming solutions. Among its most notable competitors are LiquidSky, Nvidia GeForce Now, Playstation Now. These companies have different business models, different solutions and approaches to the problem but share one goal – allow users to play top-notched games without spending a lot on a high-end gaming PC.

The Russian startup has tried to go further than others in optimizing server runtime – thus lowering operating costs. Playkey also presents as distinctive advantages some of its monitoring tools – in particular, those that allow users to see packets lost, game FPS, resolution and other parameters.

There’s no less than 1.8 billion gamers in the world who can’t run the most recent games on their computers – and as many potential Playkey customers. Enough to fuel a startup’s big ambitions.

Classic startup path

Until its ICO, Playkey had made its way on a rather classic path of startup development. After establishing itself in Russian-speaking countries, the company expanded to Europe and the United Kingdom. It has grown steadily, serving more than 250 000 paid subscribers (as of November 2017) with a hundred of servers across Europe.

Guriev claims that Playkey’s profits has increased 300% over the past year.

Playkey has got partnership agreements with such top gaming businesses as Ubisoft, Bethesda and Wargaming.

On the financial front, the Russian startup raised more than $5 million in equity funding from inception to 2017. The latest capital injections came from Darz, a major German data center company ($1.5 million in February 2017) and IIDF, Russia’s largest startup investment fund ($2.8 million in July 2017). This funding aimed to fuel expansion on the global market, including Asian countries.

Cloud no longer the limit

But Playkey has undertaken to reach new goals. It is now introducing blockchain technology, bringing together gamers and cryptocurrency miners in a bid to create a decentralized gaming network.

In that environment, gamers will pay miners with Playkey’s tokens, PKTs, implemented on the Ethereum blockchain, for using their computer capacities.

When a sufficient number of miners are on board, gamers will be able to stream from a computer that is in their neighborhood. As a result, Playkey will be able to continue expansion without investing in physical server infrastructure.

To strike minds, the startup also announced that Oculus VR co-founder Dillon Seo joined the project as an advisor. Also joining the company as advisors have been David Carlson, CEO and founder of the biggest mining farm, GigaWatt; Michael Kim, CEO and founder of CoinInside, and former executive of Blizzard, Wargaming and Havok; and Ruben Godfrey, cofounder of the Blockchain Association of Ireland, Albert Castellana, board member of NEM, one of the largest cryptocurrencies for market capitalization.

After collecting some $4 million in a pre-ICO campaign, Playkey completed its ICO in November 2017. No less than 100 million tokens of Playkey’s proprietary crypto-currency (PKT) were released, 60% of which were available for sale.

According to the company, the amount came essentially from individual investors, but three investment funds — Uncharted Capital, Allrise and G2H2 Capital — also got involved, buying over $1 million dollars worth of tokens each.

Playkey raised nearly $11 million the crowdsale, pre-ICO and ICO both included. This amount was far from the initially considered $40-60 million target – but it is large enough to develop the new blockchain platform and accelerate international development, Playkey’s press service told us.

The end of consoles?

The company also plans to set up the Playkey Foundation, which will fund itself by acting as a toll gate for the entire network. The money will be used to develop an ecosystem of gamers with low-end PCs, miners with high-end PCs and mining-farms and game publishers.

Following the ICO, Playkey’s operational model will change, switching to a P2P arrangement where any owner of a powerful computer can rent out their hardware to another user. In this ecosystem, gamers can rent the miner’s PC capacity paying with PKT as well as use already existing Playkey servers.

As Phil Spencer of E3 said: "The next generation of [gaming] consoles could be the last one that is based on hardware."