The future of gaming is set to become more democratised, thanks to the proliferation of high-speed internet connections.
Earlier this year, e27 went to the Consumer Electronics Show (CES), where American tech giant Nvidia unveiled GeForce Now, a cloud service that allows gamers to play high-end games on any PC or Mac — as long as they have a fast internet connection.
Think of GeForce Now as the “Netflix” or “Amazon Web Services” for gaming. A centralised base of supercomputers takes care of the resource-intensive computing processes, sparing gamers the cost of building expensive PCs or buying consoles, as well as purchasing the games.
Nvidia is not the only player in the arena, though. Sony also has its skin in the game with its PlayStation Now subscription service.
There are also lesser-known competitors, such as Russian-based startup Playkey. It has deployed 120 high-powered servers, each outfitted with eight GeForce GTX 1080 graphics cards and eight 32GB DDR4 RAM modules (in layman’s terms, they are gaming rigs on steroids). These servers are located in based in London, Frankfurt, Amsterdam, and Moscow.
“The games are launched on a dedicated server or computer, which run Windows 7 or 8. Each of them can run up to 10 games simultaneously,” Egor Gurjev, CEO and Co-founder of Playkey, tells e27, in an email correspondence.
“The frames of the gaming process are captured on a GPU level and encoded there also. Then, these frames are sent to the gamer PC/Mac/smart TV/ tablet or mobile phone. On the gamer’s device, the frames are decoded and displayed accordingly,” he says.
The whole encoding and decoding process is completed within 10 to 20 milliseconds. So there’s no latency, unless the internet connection is slow or gets disrupted.
I tried out the free Doom demo (the 2016 version, not the 90s classic) on a co-working space’s WiFi connection. It worked fairly well. The controls were a little wonky (but that’s probably because of my mouse), but otherwise, the whole experience was smooth.
Playkey’s servers collectively serve 100,000 paying users, of which 20,000 are monthly subscribers. To date, it has earned US$2 million in revenue.
It is easy to see the allure of the platform. The basic service costs only US$10 per month and offers 300 games, including AAA titles such as Grand Theft Auto V, Fallout 4 and Witcher 3. For comparison, purchasing these three games, along with an Xbox One to run them, would cost at least S$400 (US$300) at current market price.
For casual gamers who want to experience the best and the latest the gaming industry has to offer but would rather not spend on gaming hardware and software, this is the perfect solution.
There is, however, a catch: Unlike Nvidia, Playkey does not have the financial muscle (with only US$2.8 million in VC funding), market reach, or headcount to scale its operations efficiently — or at least, not fast enough to outpace its competitors.
“Our biggest challenge is to scale the speed of launching new game servers in different regions. To do that, we have to sign contracts with data centres [in that market], lease the servers, send our engineers and launch our server nodes. Usually, it takes us 2-3 months,” says Gurjev.
If launching centralised servers in different markets is slow and inefficient, then the best way to scale is to spread the computing power across various rigs around the world in a decentralised network.
And that is what Playkey is betting on — it is launching an ICO to fund the development of its blockchain-based gaming server network.
How it works
Here is what it gets complex: Playkey’s blockchain-based server grids work using a community of miners, but the system is on partly based on the public Ethereum blockchain.
It will develop its own cryptocurrency token called PKT, which will be used for all transactions on Playkey network, including the purchase of its cloud gaming subscriptions. Gamers have the option to buy these tokens using fiat currency or cryptocurrency if PKT is listed on a cryptocurrency exchange.
Relying on just the Ethereum blockchain, however, Playkey says, poses a few limitations because each Ethereum transaction incurs a fee and it takes time to process transactions (potentially hours).
So what Playkey is doing to circumvent this problem is develop a hybrid solution. The PKT transactions still happen on the ethereum blockchain, but there is also a “centralised offchain ledger with an API” component, which will leverage on other digital partners (Playkey did not specify who).
That being said, Playkey plans to eventually move the entire transaction process to the Ethereum blockchain once it can overcome Ethereum’s current shortcomings.
But back to the PKT tokens, here is a quick breakdown of how the transaction process will work.
First, the player will download the Playkey application, then, they have to download PKT wallet and top it up with PKT tokens. They then select a server to play in and enter into a smart contract with the miner. On the miner’s end, they will have to download Playkey application as well as the games. The miner can set the price for using their server.
Because the process is based on a smart contract transaction, the player’s PKT tokens will only be transferred to the miner’s wallet after the gaming session has concluded.
The longer game
Playkey plans to issue 100 million PKT tokens for its ICO. The objective is to build Playkey’s blockchain technology, accelerate the development of its decentralised p2p gaming streaming solution and reach 10 million players across the world.
Its ideal goal is to raise around US$23 million so it can fully realise its ambitions, but to develop its decentralised network and mining community, it plans to start with US$2 million.
For miners, Playkey claims its ecosystem is “2 to 3 times more efficient than any altcoin mining add opportunities.” First, the cryptocurrency mining market is maturing fast, and because it is basically an arms race, those with the capital to build mining farms get the lion’s share of the transactions — and earn more as a result.
In contrast, Playkey has a simpler objective: Let users use your rig to play games and I will give you money.
“We believe that Playkey service is a diamond for miners, because the ‘proof of stake’ that will be implemented to the ethereum will make most of the GPU miners bankrupt. Playkey miners can utilise this GPU resources in the Playkey platform and earn 2 to 5 times more rewards than they can from mining ethereum,” claims Gurjev.
Playkey has set its sights on Asia. It has appointed two Korean entrepreneurs to lead its Asia expansion. They are Dillon SEO, the co-founder of VR company Oculus Rift, which was sold to Facebook for US$2 billion, and Michael Kim, the managing director of game developer Wargaming’s Korean operations.
Korea and Singapore is of particular interest to Playkey, says Gurjev. Both countries’ internet infrastructure are among the most robust and fastest in the world.
“We plan to be incorporated in Singapore, and work on Asia from Singapore. It is a great hub for tech a company,” he says. Playkey won a startup pitching competition at this year’s Slush Singapore event.
“We are currently talking with local entrepreneurs to set up a partnership to bring servers to Singapore and start the first mining node, to service customers next year,” says Gurjev. One of its partners GCORE.LU a subsidiary of wargaming. They built the infrastructure for Wargaming and Playkey.
“They have a presence in Singapore already, so we can launch fast,” says Grujev.
Playkey will launch in Singapore by June 2018. It will charge US$10 for its basic package and US$20 for its HD graphics gaming subscriptions.
What it means for the gaming industry
If the ascent of Netflix and Spotify teaches us anything, it is that streaming services have the ability to shut its physical rivals. The herald of GeForce Now and Playkey would undoubtedly not be an exception to that rule — game stores are already under duress to diversify because of competition from Steam and piracy, this could be the final nail in the coffin
Soon, it would be hard to justify splurging US$60 on a brand new game, and sales of new games would plummet, but that does not mean the quality of games will drop as well (at least, not initially).
A quick look at the Playstation store shows a few quality free-to-play titles such as World of Tanks and Warframe. They offer rich multiplayer experiences and are consistently updated, thanks to revenue from microtransactions that feed their developers.
For gaming hardware manufacturers, though, they will have to pivot to developing higher-end rigs for miners or focus on gaming accessories.
To sum it up, for traditional game stores and developers, the key to embracing the future of gaming would be to align to their objectives and disrupt themselves before it’s too late.
Image Credit: Playkey