FunFair CCO Stefan Kovach looks back on an extraordinary year as well as previewing what is still to come in the years ahead.
A year that began at the height of the crypto bull market, 2018 has been one of significant milestones for FunFair, but one not without its challenges! You could sum up our approach in three words; product, product, product. Proving that this tech works as imagined was step #1 on the road to the creation of a key use case for blockchain and cryptocurrencies, and a new igaming paradigm. What we’ve achieved in the relatively short time since the foundation of FunFair is down to the skill, passion and commitment of the team and especially the developers. All power to the ‘buidlers’.
With the launch of secure, transparent casino technology, our own utility token and the maturing of the business behind the technology, we have delivered on most of the primary goals from the 2017 Token Presale whitepaper. Making good on a white paper’s aims is something most crypto projects are still working towards, so it’s bittersweet that we are in the small minority to have done so.
Our focus this year has been on launching the world’s first blockchain casino with a full suite of games. Having built more games, and of the highest quality, of anyone in crypto, our offering is one of the success stories of the year. Unlike other projects who focus on one lone game, we’ve shown that blockchain and Fate Channel tech can be applied to a range of provably fair games – card, table, slots, dice – which you’d expect to see at any mainstream online casino. As promised, our games play faster than any other blockchain rival, and are as good looking and engaging as any from suppliers in the igaming world, which was always an important goal.
We were first to market, which comes with advantages and disadvantages. What we’ve built – the first version of our gaming tech now live on the Ethereum mainnet and being used daily by players in 14 countries – is a slimmed down version of what we intend the complete FunFair platform and ecosystem to be. Clearly there is a lot of work still to be done but we are proud that the core product is out there.
Some of our early learnings have come from the new player funnel – signup, KYC, UI/UX and wallet. Going live with a working but suboptimal onboarding process helped us to launch more quickly and accelerate the learnings on user experience and behaviour in the wild but has hindered consumer take-up.
These issues are impacting everyone in the crypto space, a fact reinforced by our experience at Devcon4, and fixing them is our top priority. The bleeding edge of technology is where you find the most difficult problems to solve. Getting customers from ad banner to game is challenging when you’re reliant on an evolving ecosystem – e.g. Ethereum and MetaMask – which has yet to match comparable non-crypto infrastructure. Clearly there is still some way to go until we have a complete FunFair platform running within a more stable and scalable blockchain ecosystem, but we’re doing our bit to help make this happen.
As the leading provider of blockchain gaming technology, we are focused on bringing operators onto our platform. Ahead of that phase, the launch of CasinoFair, owned by the FunFair Group, has enabled us to learn and iterate more quickly.
What have we learned? The tech works. The core product is stable, the games are provably fair, payments and random number generation are decentralised, dispute resolution offers additional layers of protection, game contracts are transparent and secure.
From a technical point of view, CasinoFair is a rock solid proof of concept. We have built all of the essential and unique facets of fair blockchain gaming that we set out to, and they function as we’d hoped.
Although it’s in some ways a guinea pig for V1 of our technology, it’s still important that CasinoFair becomes successful in its own right. CasinoFair has already seen over 310,000 rounds played and has attracted an unusually high proportion of players with a VIP profile – an endorsement of the professional, engaging gaming experience we sought to deliver. And we expect more examples of high staking to follow. So we have customers, albeit initially moderate numbers, from whom we are getting invaluable insights. But given the technical and jurisdictional limitations we are currently working with, we’re not overly concerned by the numbers we have seen to date . As FunFair and crypto become more user friendly over the coming months and years, we are confident those numbers will significantly increase to be a fairer reflection of demand for blockchain gaming.
Alongside new games, the 3rd party game developer programme and continual optimisations to the existing tech, we’re now working on the product strategy and roadmap for 2019 which we will have more to share with you on over the coming months. I’m really pleased with how this is shaping up and excited by some of the projects we are currently evaluating.
One of our key strategies for 2019 is the onboarding of many more white label operators, starting with RakeTheRake. As you may have read from the recent company update, the launch of RakeTheRake’s casino has been postponed until early next year. It’s disappointing that we didn’t launch with a partner this year but we’ve pushed it back for all the right reasons, and frankly delays are to be expected when you’re building something new. FunFair operators will expect commercially viable, market-ready and battle-tested gaming solutions, and we aren’t aiming for anything less.
Where will the first wave of operators come from? Traditional online gaming firms are now more aware of and have a more sophisticated understanding of blockchain technology, but the big operators are in ‘wait and see’ mode. It’s an area of interest, some have made hires to look at blockchain tech but they’ve got a lot on their plates elsewhere too. They will see how it evolves and maybe they’ll build their own tech, but I believe they are more likely to choose a partner to work with (we will be ready) or acquire someone. Where we are seeing more interest now is from an alternative class of operator – affiliates, marketing agencies, other non traditional operators and small casinos – who are generally more agile, more entrepreneurial and willing to take more risk. They’re interested in the tech, the market and the opportunities blockchain can bring. Most are likely to operate under a white label agreement with us, similar to RakeTheRake, which further reduces the barrier to entry as they won’t need their own gaming license.
If you want to build a sustainable gaming business and be able to access as many customers as possible, you have to have licensing at the centre of your business strategy. We have had mixed success with regulators this year. On the one hand, withdrawing our application for the Supplier license in the UK was disappointing, but securing a Curaçao gaming licence has enabled us to operate CasinoFair and other white labels on behalf of partners. Our top licensing priority next year will be to work towards gaining a license from the Malta Gaming Authority (MGA), a top tier gaming regulator who are extremely forward thinking and see the potential for blockchain technology to offer fairer, safer gaming. This is by no means straightforward and will require significant resource, which we will have to prioritise alongside the many other projects we are working on.
It is also worth noting the significant amount of work we have done on the financial regulatory side. It is a complex and continually evolving area that, as a responsible company, we need to keep abreast of and adapt to as necessary.
After a year of enormous growth, we’ve now got a solid team with a unique skillset. We have assembled one of the biggest and most experienced teams in the global crypto space. No other crypto gaming team has that level of knowledge, and our team will be the key to our future success. The opening of our Dublin office brings a different dimension to the organisation. It’s a fantastic global hub for tech talent and we’re excited to have a number of open positions. That said, it won’t be necessary to continue expanding through 2019. However, if there is an area for growth still, it’ll likely be on the operational side of the business.
As a business in the crypto space, you cannot talk about 2018 without mentioning the protracted bear market. The depth and duration of the downturn has shocked many, despite being historically possible, if not predictable. Like all other projects, our finances have taken a hit. Fortunately, we converted enough crypto holdings into fiat that we have runway for 1-2 years, not including any revenue generation. We are relatively prudent in our approach to what we hold in crypto, but if the bear market continues and threatens to impact our operations beyond what we have anticipated, we will put plans in place to get where we need to faster. If the runway shortens, we’ll take off quicker, as well as implementing strategies to extend that runway. Overall, when we look to the next two years, we feel we are in a reasonably comfortable position.
As well as building the product, the team and an extensive network of business relationships, we are very proud that the FunFair brand remains at the forefront of blockchain tech in the igaming world. By being a vocal, credible and highly respected authority on what blockchain technology can do for the gaming industry, we’ve created a premium brand with an excellent reputation in an area that is often viewed with scepticism. FunFair is, and I hope always will be, the go-to firm for blockchain gaming tech, the thought leaders in the space and the drivers of mass adoption.
A FUN future
The next 12 months will further cement our transition from a tech project, to a commercially hungry enterprise with a start up mentality focused on serving the specific needs of players and operators. In doing so, we will create value for all participants in our ecosystem and in turn ensure that we have a viable long term business model.
The initial vision of anarchic, crowdsourced crypto disruption may still be appropriate to certain areas. But in gaming and many other sectors, sensible companies who are most likely to succeed are acknowledging the role of regulation and also some of the wider commercial realities of the space. You have to make something with real life use cases, a product that solves a problem that needed solving. We believe this is true of our platform and ecosystem, and now we need to go out and prove its commercial viability. We need to be flexible and learn quickly through doing and learning from the invaluable real life data we have. This will be an iterative process whereby we will need to pivot, tweak, adapt and move on if something is not working or an audience we are targeting is not responding. At the end of the day we are pragmatists as well as believers and I am confident this will hold us in good stead for the challenges and opportunities that lie ahead of us. I don’t think the decentralised, open values at the heart of this crypto revolution are incompatible with the commercial realities we face, but most businesses that are likely to succeed in this space are making that shift in order to drive adoption of this exciting but still very nascent tech.
That shift towards a commercial business is manifesting itself across all aspects of business from how we are structured, the processes we have in place, how we drive the product roadmap all the way through to how we communicate to token holders. Our new product team, for example, is taking its cues from end users, operators and partners to drive strategic decisions and optimisations with the ultimate goal of creating something of value to a specific audience.
For FunFair, 2019 will be the year of the FunFair casino, when we expect to launch many more white label casino brands. As a result of our ability to seamlessly facilitate the licensing process on behalf of FunFair-powered casinos, our operator target audience is potentially very broad. More product enhancements, more casinos and the establishment of the wider ecosystem will mean faster adoption.
As far as the product is concerned, we have immediately prioritised the improvement of the consumer funnel including building our own wallet, improving the KYC process, token swap and dex tools and generally creating a much slicker user experience – all good reasons to believe we can significantly ramp up numbers in the first half of the year. Marketing activity will increase in sync with improvements to the conversion rates through the funnel.
We will deliver on the vision for a FunFair ecosystem with the introduction of affiliates and further improvements to our third party game developer programme which is progressing well and reaches another milestone soon with the launch of Spike Games’ Alice Cooper slot.
To help add to our list of strategic commercial partners, we will be exhibiting at ICE again in February with a significantly improved product offering to the gaming industry. There is still plenty of education to be done, not to mention the continued lobbying of regulators.
After seeing what we’ve done so far this year, I’m in no doubt that blockchain will have a major impact on the gaming sector and FunFair is very well placed to drive that change and benefit from it. While we expect the markets and the general blockchain environment to remain challenging in the near term, we will take a sensible and informed approach to the various risks, prepare for a wide range of scenarios and ultimately be stronger for it.
We intend to stay ahead of the game and to continue evolving our offering, ensuring FunFair will remain synonymous with blockchain gaming for many years to come.