Gamestacy is raising via Crowd SAFE with a $10 million valuation cap and a 20% discount rate. The company’s platform is only in its beta phase, and although Gamestacy was incorporated in 2016, the company did not launch Influenzer’s beta version until 2021. The company raised just $125,000 previously and has not generated any revenue. Although software industry startups are notorious for having higher valuations than startups in other industries, Gamestacy’s current valuation is too high for the company’s current stage. Therefore, this round’s investment terms are unattractive for investors. 

The global metaverse gaming market is worth $36.8 billion in 2022, and it’s growing at a rate of 38.2%. It’s unlikely that Gamestacy will obtain the entire market. However, even if it grabs a smaller share, its obtainable market could still be significant. The market is growing very rapidly, which means Gamestacy is riding an upward trend. 

Banks, including Citibank and Goldman Sachs, are bullish on the metaverse industry. Although there are numerous applications of the metaverse, gaming remains the biggest trend in the space. Companies in the metaverse gaming industry receive more funding than companies in any other metaverse sectors. The leaders in the metaverse game industry, Axie Infinity and Splinterlands, have proven highly successful. 

Gamestacy plans to incorporate various fashion brands’ products on its Influenzer platform, which opens up even more revenue opportunities for the company. Fashion brands have taken advantage of the metaverse rush to showcase their designs on avatars, earning revenue from players’ digital expressions. Some examples include Balenciaga teaming up with Fortnite and Adidas partnering with Bored Ape Yacht Club.  

Considering how big the metaverse gaming market is, early investors in the space might get massive returns on their investment in Gamestacy. There are established competitors, but Gamestacy could still get a decent market share because it isn’t a winner-take-all market. Overall, Gamestacy has strengthened its market opportunity by combining gaming with fashion, two of the biggest trends in the metaverse. 

Gamestacy was founded by CEO Danish Sinha. Sinha has a Bachelor of Technology in computer engineering from Shiv Nadar University. He studied game development and design at the California Institute of the Arts and Michigan State University. Sinha claims to have built nearly 20 games previously. Prior to founding Gamestacy, Sinha co-founded PakkaProfile, which offered a gamified job recruitment and assessment process. Although the Gamestacy raise page claims the founder has successfully exited, this seems inaccurate. PakkaProfile did receive investments from a couple of venture capital firms (Java Capital and LetsVenture) in India, but it has not exited yet. While Sinha has some experience in building games, it seems like none of his previous games have been deemed successful in the market. He also lacks managerial experience, as he jumped straight into building games after finishing his education. Overall, his past experience does not signal a strong ability to make Gamestacy a success.  

The team currently consists of 12 members spread across business development, game development, and art and design. The company also has four advisors. It’s a positive sign that the company already has a variety of core team departments at an early stage. However, the company has not yet recruited C-suite level members to strengthen the team’s foundation. It is crucial for a young team like Gamestacy to have leaders with high levels of expertise. Overall, the team seems well equipped to create a game. But with a founder lacking strong managerial experience, it is unclear if the team can successfully grow Gamestacy as a company.

According to founder Danish Sinha, Gamestacy is a combination of multiple successful games. It got its metagame idea from “Homescapes,” a puzzle game with decoration and narrative elements. Influenzer consists of fashion or dress-up mini games inspired by “Covet Fashion” — a fashion styling game — as well as a story-based core loop inspired by “Choices,” a choose-your-own-adventure game. Having all these features in one platform could be a huge differentiator in the gaming industry. It expands the experience so that gamers can design fashion products, buy and sell digital items in a marketplace, and expand their social network by engaging in Influenzer’s social media and virtual meeting features. As more people use the Influenzer platform, the game experience will continue to improve. If Gamestacy can attract enough players, this all-in-one platform could increase user retention more than other games. 

Although the company has a similar business model to other games (making money from marketplace fees, in-app purchases, and advertisements), Gamestacy also plans to incorporate fashion brands into its game. These fashion brands would be able to showcase and advertise their products in the game, which could create a lucrative revenue stream for Gamestacy. 

A number of Gamestacy’s competitors have been successful. In 2019, “Homescapes” surpassed $1 billion in lifetime revenue. “Project Makeover,” a fashion-themed puzzle game, has earned more than $69.2 million. And “Choices” has earned more than $175.4 million. This signals that Influenzer has huge market potential. And given the rapid expansion of the metaverse market, there seems to be room for multiple companies to succeed. All in all, Influenzer’s combination of gaming, social networking, and a user-generated marketplace demonstrates a strong differentiation factor. 

Gamestacy is still in its early stages of product development. The final version of its Influenzer platform will be released in 2023, which means the company has not yet generated any revenue. However, the company previously raised $125,000 from an angel investor — Sanjay Kumar, former CEO of Elior India and Altran India. 

The beta version of Influenzer launched in 2021, and it has gained some great early traction. Within just one year, the platform saw 72,000 users sign up, which is excellent. On Google Play, Influenzer has received decent reviews, with 3.9 stars on average. Additionally, the game was awarded “Best of” by the India Game Developer Conference, Indie Clash, and Financial Express. Gamestacy also benefits from going through Google’s Indie Games Accelerator. Furthermore, the company was able to secure a partnership with Beamable for its game design, development, and launch. This partnership could boost Gamestacy’s efforts in reaching the market.  

Because Gamestacy hasn’t fully released its product, it has little financial performance for investors to judge. However, Gamestacy’s strong early traction is a positive signal for investors.

Gamestacy bears moderate risk. The majority of its risk comes from its Influenzer platform’s early stage of development. The product itself is technically still in the beta phase and will not fully launch until 2023. Although the current version has shown stellar early traction, there is no guarantee that the final product will be successful. 

Because Gamestacy is a gaming and social networking company, it’s expected that the company will burn significant cash in its early years in order to acquire a large number of users before it starts generating revenue. Therefore, it might take a long time for investors to see the company generate enough revenue to sustain its own operations. In the meantime, the company will have to raise more funding rounds. More funding rounds come with more dilution for early investors. So depending on how capital-efficient the company is and how many funding rounds it goes through, there’s a risk that investors will receive lower returns on this investment. 

Finally, there is some team risk because the founder isn’t a strongly experienced leader. Since there are currently no other C-suite members to supplement his skill set, it could hinder the company’s growth.

Gamestacy is a game development company that has been around since 2016, but it is still in its early stages of product development. The company launched the beta version of its Influenzer gaming platform in 2021 and will launch the final version in 2023. So the success of the product is still far from certain. 

Moreover, Gamestacy has a decent amount of funding risk. Gaming companies typically take a long time to reach profitability. Developing a game can take as long as seven years, during which time funding is needed to sustain the developers. And only 5% to 30% of games manage to break even. Gamestacy needs to acquire enough users before it can generate significant revenue. Because of this, early investors might have to wait a long time to see results from this company. Additionally, Gamestacy might have to go through more funding rounds to keep operating, which would dilute early investors’ equity. Finally, since the company is still in a very early stage, its current $10 million valuation seems to be quite inflated. 

Gamestacy operates in the metaverse gaming industry. The metaverse gaming market is growing enthusiastically at an annual growth rate of 38.2%. Some banks, including Citibank, are very bullish on the metaverse, and the gaming sector of the metaverse industry has received the most funding out of all the metaverse sectors. These strong upward trends could help Gamestacy succeed. 

Gamestacy also has a strongly differentiated product. Its Influenzer metaverse platform is a combination of games, a social network, a story-based core loop, and a user-generated marketplace. This all-in-one feature could level up gamers’ experience and attract more users. 

Furthermore, the company aims to set up a lucrative revenue stream by allowing fashion brands to showcase and advertise their products in the game. This could accelerate the company’s market adoption and future scalability, since fashion brands are expected to be the early winners in the metaverse rush. Finally, Influenzer’s beta version has shown compelling early traction, indicating that the product has potential.

Gamestacy is developing a metaverse platform called Influenzer that combines gaming, fashion, social media, a story-based core loop, and a user-generated marketplace. The company is operating in a hot new market with a rapid growth rate. Influenzer’s all-in-one feature sets it apart from other metaverse games. The game’s beta version has shown convincing early traction within just one year of launching. Additionally, Gamestacy plans to set up a lucrative revenue stream by collaborating with fashion brands. 

However, Gamestacy is still in its early stages of development and has no revenue after six years of operations. Its final product will not launch until 2023, and success is not guaranteed. Considering the company’s early stage, its current $10 million valuation is unattractive for investors. Finally, Gamestacy’s founder hasn’t proven his ability to build a successful company yet, and the team still hasn’t recruited C-suite members to strengthen its foundation. Therefore, Gamestacy is a Neutral Deal. 

For questions regarding the KingsCrowd analyst report or ratings for this company, please reach out to support@kingscrowd.com.

Analysis written by Inez Sanjaya, May 21, 2022.