ICO Analysis: Chimaera by Midgard Research

ICO Analysis: Chimaera

Disclaimer: Our research is not a financial adviсe. We just share our opinion on ICOs based on public available information. Do your own your own research before making any investment. 

About industry

In 2015, the global video games market was worth approximately $71 billion. By the end of 2020 its value is expected to exceed $90 billion. The gaming software industry depends on three monetization schemes to make such profits: consumers may simply buy games; revenues can be generated via in-game advertising; or gamers can spend money on microtransactions.According to the forecast of Newzoo agency, the Game industry grows an average of 6.2% annually and is projected to have a stable growth for for the next decade. The mobile games are expected to contribute the most to this growth.

Problem Definition

• The game development market is monopolized.
• Independent developers have many entry barriers (intellectual property protection, product certification).
• Difficulties with democratized monetization system (it is impossible to measure the contribution of every developer who takes part).
• Mandatory fees to reach the mass market (for example AppStore, Steam).

Will blockchain technology be able to solve these problems?About ChimaeraChimaera platform can help to solve these issues via the democratisation of game development and deployment. The company wants to create a wealth of tools and infrastructure for developers to build their own games.  Game developers can use Chimaera technology

• to build decentralised games
• issue their own game currency that can be traded for CHI or other Chimaera game coins/assets
• create scalable multiplayer modes.
• Trade assets for new and existing games

Monetisation instrument

Some common examples of how monetisation can be achieved with Chimaera:

• A percentage of “banked” humanly mined coins go to the developer.  
• A one-off fee to join or subscribe to the game, similar to that used to purchase a boxed game.
• Also, in-game stores can sell various permanent or consumable products.

Competitors:

Сhimaera does not have a direct competitor based on Blockchain technology, but these companies share some of Chimaera’s functions:Cloud moolah, a marketplace for selling games, applications and game assets directly from developer to consumer (on upcoming ICO stage, right now).BitGuild, a marketplace for digital assets, games etc. (The ICO is over, and it did not reach the hardcap).Refereum, a game marketing platform and marketplace for game referrals. Market cap: $23.3mIn general, ICOs within the game industry do not perform very well, but Chimaera may have a chance to perform better than most, because it is a multi-functional game development platform, not just a marketplace as it would be in most other projects.  From the whole game industry, we can identify these non-blockchain competitors:Unity is a game development platform for building high-quality 3D and 2D games, deploying them across mobile, desktop, VR/AR, consoles or the Web, and connecting with loyal and enthusiastic players and customers.Steam, AppStore, Playmarket, Playstation Store are the biggest marketplaces for computer, mobile, and console gamesChimaera has compatibility with Unity system, that means that you can use Chimaera development tools on the Unity platform. This kind of cooperation gives the gamedev community easy access to Chimaera platform.Games on blockchain can be sold for fiat money on platforms such as Steam and AppStore, and use other kinds of monetization schemes inside the game at the same time.

Tokenomics

Chi is a classical utility token and is used to fuel all transactions, for example:

• Account creation,  
• Account transactions,  
• Purchasing/renting game assets/accounts,  
• Game transactions,  
• CHI powered crowdsales,  
• Coin transactions,
• And much more…

We always give some scepticism to pure utility tokens, because their circulation structure should support a stable demand for tokens, and it should motivate users to hold them, or at least not to sell immediately after they are acquired on exchange to pay for services.In the case of Chimaera, tokenomics looks promising because of the wide range of token applications. CHI may become an intermediary currency for many game projects and be widely used as “money” for gamers, who are not motivated to buy/sell tokens for fiat on exchanges every time they interact with the platform.  

Token distribution:

The distribution is fair for each participant, and the allocation of funds is understandable and normal for such projects. However, a 50% discount on private pre-sale may put pressure on the price of tokens after they are listed on the exchange.

Team

Chimaera is run by an experienced team that has already developed the blockchain games Namecoin and Huntercoin.Overall, Chimaera’s core team consists of 13 people.CEO Andrew Colosimo, has over 20 years of experience in IT, computing, and computer gaming. He was one of the earliest pioneers to capitalise upon the sale of virtual items in massively multiplayer online (MMO) games.Chimaera’s lead developer  Daniel Kraft is in the top 30 bitcoin contributors and has only been contributing since 2013. He is the lead Namecoin and Huntercoin developer.There are also software engineers, designers, theoretical mathematicians, business and marketing developers, with at least 10 years of experience.Advisory board consists of professional businessmen and blockchain experts.

Prototype

Closed beta – The core client is finished and in a private repository on github. The testnet is being used by a gamestudio atm. 

Summary

Score: 7 out of 10In general we like the idea of the project, team and long-term perspective of the project. Chimaera can really become a solid infrastructure solution applying blockchain to the gaming industry. We are not sure about the flipping perspectives of Chimaera, especially under current market conditions.Growth Opportunities:

• Infrastructure project with a lot of tools for game developers to build their own game worlds
• Wide range of token applications
• Profitable industry – average grows by 6.2% annually and has a reliable and stable forecast.
• No direct blockchain competitors
• The possibility of cooperation with existing leaders in the game industry (Unity, Steam, AppStore) and mutual coexistence.

Risks:

• Industry risk/current market conditions: ICOs within the game industry do not show strong performances.
• The main weakness is connected with their high ambitions, as they need to do a lot of work to achieve their goals.

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Research was prepared by

Oleksandr Liubashevskyi

Senior Analyst at Midgard Ventures