If you’ve ever played a video game or even mobile game, you’re probably familiar with microtransactions. They’re little digital assets you can buy to give you a boost, identify you as part of a team, or even just change your avatar’s look (like the Lollipop Hammer in Candy Crush). Microtransactions are becoming an increasingly popular business model, especially in games that are free to play. But once those items are purchased, they only exist on your account and may even be locked to the device you purchased them on. 

Gameflip has proposed a solution: a digital marketplace where gamers can buy and sell their digital assets using the blockchain. We interviewed co-founder and CEO JT Nguyen about his inspiration for starting the company and goals for the company in the long term. 

Note: This interview was conducted over phone and email. It has been lightly edited for clarity and length.

Funding Round Details

Gameflip logo
Company: Gameflip
Security Type: Equity - Common
Valuation: $34,781,547
Min Investment: $250
Platform: StartEngine
Deadline: Dec 15, 2023
View Deal

In your own words, how would you describe Gameflip?

Our mission at Gameflip is simple — we want to make gaming better. We built Gameflip to give control back to gamers, offering them the ability to “flip” their gaming items and assets.

Gameflip is a fully operational marketplace platform for gamers to buy and sell digital gaming items, gaming assets, and codes for games and gift cards. The transactions on Gameflip are gaming platform agnostic and use a simple “Amazon-like” purchase flow designed for the mainstream audience.

And now, Gameflip’s commerce platform incorporates blockchain technology, uniquely positioning us to capture the $126 billion market opportunity created by the evolution of the industry to blockchain-based games. Our Web3 white label solution allows innovative game publishers to create, distribute, and sell digital gaming assets directly to gamers without the use of complicated blockchain transactions.

What inspired you to take the leap and start this company?

Through our experience as game publishers and developers, we saw a strong unmet demand for gamers to realize a return on the thousands of hours they spend in their favorite games. In today’s gig-based economy, gamers are looking for better and safer ways to transact their digital games and items. 

The core problem is that when gamers decide to play something new, their investment, effort, and items are all locked in previous games. Founding Gameflip has been a rewarding experience and with the rapid transition to blockchain-based games, we’re very excited about unlocking the full potential of our platform for gamers.

How is Gameflip transforming the gaming and blockchain industry?

With Gameflip’s simple and intuitive commerce platform, we’re bridging the gap between developers, publishers, and gamers in emerging blockchain technologies, positioning Gameflip to make blockchain-based games accessible for everyone. We’re proven and secure with more than $140 million in sales transacted on our platform to date, enabling gamers to simply and safely buy and sell any type of digital game, item, and asset — regardless of the underlying blockchain technology.

Who is on your team and how did you come together?

We’re an agile team of gaming experts and serial entrepreneurs. I founded Gameflip along with my co-founder, Terry Ngo, who I met at Stanford. Together, we each have more than 20 years of experience building and scaling global businesses across multiple industries. Prior to Gameflip, we successfully built and sold our game publishing business, Aeria Games, that we scaled to more than 300 employees worldwide and more than $100 million in yearly revenue. Collectively, our core team has more than a century of experience building startups!

How does Gameflip fit into the future of the metaverse?

Gameflip’s commerce platform was built to be both flexible and comprehensive by including these major features: account and profile management, payment in multiple currencies, fraud detection and prevention, real-time messaging and notifications, blockchain and Web3 integration, anytime accessibility with mobile apps, and dispute management and resolution.

Our goal is for Gameflip to become a core component of the ecosystem that powers commerce for the gaming metaverse. Hence, our efforts over the next 12 months will be focused on building a Web3 business-to-business (B2B) channel by giving third-party developers application programming interface access to our platform to power commerce for their blockchain-based applications.

In addition, we will seek to hire an executive-level business development team member to close partnerships for this Web3 B2B business.

What does the competitive landscape look like, and how do you differentiate?

Gameflip’s competitors can be classified into two main categories: digital gaming marketplaces and new digital asset marketplaces.

  • Digital Gaming Marketplaces: Examples include G2A, Kinguin, and G2G. These marketplaces generally focus on categories such as game codes, in-game currencies, and game accounts. Their technology platforms are limited because they don’t support the fast growing digital gaming assets category (blockchain).
  • New Digital Asset Marketplaces: Examples include OpenSea, LooksRare, and Magic Eden. These marketplaces are decentralized and focus only on the digital assets category. They generally support specific blockchain technologies and require the use of crypto wallets and crypto currencies, making it challenging for mainstream users to successfully transact. They also cover a wide variety of digital assets that includes art, collectibles, gaming, music, and sports.

In our opinion, when compared to the competitors, Gameflip has the most comprehensive technology platform that provides the simplest and safest commerce experience for mainstream gamers.

Why did the company’s revenue decline by about 16% from 2020 to 2021?

Gross merchandise volume (GMV) represents the total dollar value of all items sold within Gameflip’s commerce platform. Given that Gameflip has a marketplace business model, GMV is a direct proxy for revenue, so I’ll respond to your question by discussing GMV.

Based on our unaudited financials, the yearly GMV is as follows: 2015 GMV of $542,000, 2016 GMV of $5.8 million, 2017 GMV of $15.8 million, 2018 GMV of $25.2 million, 2019 GMV of $28.7 million, 2020 GMV of $32.2million, and 2021 GMV of $27.3 million.

We grew GMV for five straight years from 2015 to 2020. In 2020, the pandemic stay-at-home orders (lockdowns) were enforced across the globe, creating a one time burst of growth for the video game industry as consumers spent increased amounts of time playing games. Similarly, a one-off slowdown of the video game industry occurred in 2021 as the lockdowns were reversed across the globe. Hence, this external factor created a year-over-year drop in GMV of 15% in 2021 vs. 2020.

We expect GMV to remain flat in 2022 compared to 2021 as we invest our resources into abstracting our platform to develop a white label commerce engine that will power transactions of digital collectibles and assets for metaverse partners including game developers and blockchain platform developers. This key initiative will jumpstart a new B2B business for the company and strategically enable it to address the lucrative blockchain games market, forecasted at $50 billion by 2025.

How do you intend to use the money you raise this round to scale the business?

We plan to invest the money raised in this round into two key areas: to accelerate product development and to scale up our team, specifically to hire additional software developers and business development personnel.

Besides raising capital, we think there is another major benefit for our crowdfunding campaign, which is to bring onboard thousands of passionate product evangelists that can help provide robust feedback as we expand our commerce platform to address the lucrative market for blockchain-based games.

What do you want potential investors to know about you and/or your company?

I’d like to highlight three key reasons why they should consider an investment into Gameflip.

  1. STRONG TRACTION: Gameflip has already raised $10 million from Silicon Valley venture capitalists and has facilitated lifetime sales of more than $140 million (GMV) from our community of more than 6 million gamers.
  2. RIGHT MARKET TIMING: The global games market is projected to grow to a staggering $204 billion by 2023, with $2.5 billion invested into blockchain gaming startups just in Q1 2022 and major gaming publishers signaling blockchain-based games to be part of their core business strategies for the future.
  3. EXPERIENCED TEAM: The Gameflip team previously built and sold their games publishing business, Aeria Games, and has partnered with Marvel and Ubisoft to develop multiple top mobile games.

As you think about the business 5-10 years down the road, what do you see exit opportunities looking like? Have you set any future goals for Gameflip?

Given that the gaming industry is undergoing its largest evolution to date, enabling gamers to transparently own and freely trade their digital gaming assets within blockchain-based games, we believe there is potential for Gameflip to scale to a multi-billion dollar business (GMV). 

The key is for our team to remain agile and fast-moving to adapt to this ever-changing industry. Our goal is for Gameflip to become a core component of the ecosystem that powers commerce for the gaming metaverse. Similar to all other startups, the most likely scenario for an exit would be a merger and acquisition event and to a lesser degree, an initial public offering.

We look forward to seeing where JT and his team take the company. Gameflip is currently raising on StartEngine.