Many people say that a lot of innovations will come thanks to the new BlockChain Technology. It seems that it will affect different sectors. For all of us, it seems to be a game changer for the legal industry, banking and trading and many other activities.
But, what we did not notice is that it could also affect the gaming industry. This is what Ilya Nikolayev, CEO of Tapinator, Inc. (OTCMKTS:TAPM), mobile games developer, said recently. Check out his recent words:
“We believe that we’re at the dawn of a new revolution where the applicability of blockchain technology will expand from currency trading to industry-changing applications and games” Source
The comment seemed to wake up the market participants dealing with the shares of the company. The share price spiked up pushed by the market. From trading at $0.3, the share price increased to hit the long-term highs of $0.7. For those who need a calculator, it is more than 133% stock returns in a short period, which is astonishing even for an OTC stock. That’s not all. The trading volume was also fascinating; more than one million shares, which is also a one-year record.
Check the share price action before we provide more details:
Tapinator, Inc. was founded in 2013 and is headquartered in New York. It focuses on the development of mobile games on the iOS, Google Play, and Amazon platforms. The games are produced in Germany, Canada, Russia, Pakistan, Indonesia, and throughout the United States. The company owns rights to over 250 mobile games, which have achieved over 350 million player downloads. We executed some due diligence for our readers and found out some of the titles produced by the company. Check the following image from the company website:
How does this business model make revenues?
Tapinator generates revenues through the sale of branded advertisements, paid downloadable game, and premium in-game contents. According to the documents consulted by the team, the business is divided into two types of games. TAPM develops Tapinator’s Rapid-Launch Games, which are produced very quickly and at a very economical costs thanks to a series of internally developed, expendable, and reusable game engines. The so-called Full-Featured Games, which are based on both original and licensed IP, form part of other types of games. They are expected to last longer and require more development time and are significantly more expensive.
We have been following the company since October 2017 when the company commenced releasing great developments. The following are the most remarkable:
On October 12, 2017, the company announced the launch of “Dice Mage 2” on November 2, 2017, on both Apple’s iOS platform and Google’s Play platform. It was said that the company was not alone in the project, rather Boarding Party Games of Vancouver, Canada, had collaborated with the company. The game is not new. It was initially launched on iOS in August, where it was featured as “New Game We Love,” and awarded a top banner placement in 147 countries.
We believe that the company is going to continue with the project on both Apple’s iOS platform and Google’s Play platform because it was a success on iOS. We encourage readers to check the next quarterly reports, as the revenues generated by this new game may surprise.
Something else was released in October 2017. The company noted that its Rapid-Launch Games division had collaborated with TapGames and the TapSim Game Studio on the recent launch of “Scary Clown: Halloween Night.” As it was noted, it was not the first time that the company has produced clown games. It seems to be a game that is going to be easily sold because the company has already produced “Killer Clown Simulator 2017”, and “Creepy Clown Attack.” The company explained that the success of this genre was due to the release of the horror film “It,” an adaption of the Stephen King novel, which produced revenues over $634 million.
Furthermore, we believe that the market reacted in October to the following comment about the future productions. You know how this works; more games mean more expected revenues, and news about more revenues always makes the share price increase:
“Coming up during Q4 2017 and Q1 2018, Tapinator is scheduled to release four new titles: ‘ColorFill,’ ‘Divide & Conquer,’ ‘Shadowborne’ and ‘Fusion Heroes.'” Source
The month of November was also fascinating regarding developments. Although the market did not deliver the stock returns like October, the company seemed to continue its growth. The most remarkable was the partnership agreement with Robot Cake Games, a development studio based in Hanover, Germany, which was featured as “the creator of high-quality, best-in-class mobile titles.”
Furthermore, the company noted the release of a publication of an editorial featuring Tapinator, Inc. It was titled “Highly Anticipated Game Releases Could Heat Up Investor Interest in the Mobile Gaming Sector.” The market did not react to the release, but we celebrated it since it shows that the company is working on brand awareness, which pays off in the long term.
Finally, in November, it was also remarkable that “Virtual Mom: Happy Family 3D”, which was created in collaboration with TapSim Game Studio, had become, according to AppAnnie, one of the Top 100 games in the U.S. on Google Play. Please note that the market did not react to the news.
We needed to wait until January to see the share price spike as a result of the news. On January 3, 2017, the company released that it was forming a subsidiary, Revolution Blockchain, LLC, to develop apps and games that leverage blockchain technology. Things seem to be going fast, as the company noted that it had received $100,000 thanks to a private placement. Additionally, the management exhibited very positive tone:
“The formation of our Revolution Blockchain subsidiary allows us to plant a hard stake in the ground and make a long-term commitment to the distributed app market. Our management team has been in the application development and publishing space for over ten years now and successfully made the transition from social/desktop to mobile ecosystems. Similarly, we now believe Tapinator is extremely well positioned and qualified to create early leadership within the decentralized apps market.” said Ilya Nikolayev, CEO of Tapinator.
How will the company profit from the new technology?
According to the company, players currently invest thousands of hours in games to build unique in-game assets, and they cannot claim ownership over them. This is an issue that the $100+ billion games industry will try to solve using Blockchain-based gaming apps. We will be very alert in this regard because it has been the most significant driver of the share price.
Finally, on January 10, 2017, a new publication titled “Blockchain Emerging as a New Frontier for the Gaming Industry,” was released. In this original document, the CEO, Ilya Nikolayev, noted the future that the blockchain technology will have in the gaming industry.
Currently trading with a market cap of $40 million, TAPM is an exciting story among small caps. With $0.13 million in cash, $1.12 million in intangible assets and total stockholder equity of $0.3 million, the balance sheet seems stable. Furthermore, the most significant are the revenues; they have gone from $31,000 in 2013 to $3.731 million on December 31, 2016. Finally, it is true that company’s last net income was a loss of $2.3 million, but we believe that the revenue growth is what is seducing the market.
For those interested in the amount of share outstanding, they were equal to 59,459,303 shares as of September 30, 2017.
To sum up, be sure to follow this name.
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Disclosure: We have no position in TAPM and have not been compensated for this article.
Image courtesy of cea + via Flickr