1. I think a great idea. There are two main hurdles
I think a great idea. There are two main hurdles. Getting a gaming person on board and the mechanics of the Ethereum blockchain for this particular application.
84%

2. Mercury Virtual Markets
Ethereum-based platform to distribute, collect, and trade digital game content
Scott Duncan, Alex Dulmage, Nat Lavin, and Cass Meadows

3. Online Gaming Market Size
Global gaming market is already >$100Bn and expected to grow significantly
Worldwide real-money trade (RMT) market estimated to be >$2Bn per year
Variety of user-to-user RMT secondary markets for virtual property already exist across games and platforms
Game companies not interested in liability associated with virtual property 1 2 3 4

4. Inefficient Marketplace1 2
Step 1
Find website that offers exchange
Step 2
Find item desired item
Step 3
Find ‘reputable’ seller
Step 4
Non-secure credit card payment 3 4

5. Current Online Gaming Ecosystem
Problem and Solution
Fraud is rampant
Gaming platforms consider RMT transactions illegal
Siloed nature of gaming multiverse
Inability to make conditional transfers
Current Online Gaming Ecosystem
Fragmented virtual markets with high fees
Ethereum tokens
Virtual ‘currency exchange’ with dynamic pricing & live auction-house for items, boosting services, and accounts
Distributed database
Built-in validation eliminates fraud and future account hacking
Smart contracts
Enable exchanges to be made automatically once stipulations of the contract are met using a unique digital signature

6. The Virtual Market Graphical User Interface Currency Exchange
Centralized functions:
Initial issue of objects and currency
Contract verification during peak hours
Ledger Management
The Virtual Market
Graphical User Interface
Currency Exchange
Decentralized functions:
All P2P transfers
Ledger storage
Contract verification

7. Our Business Model Expand GUI to new uses
Provide maintenance services:
Updates
Ledger Upkeep
Centralized verification against distributed ledgers
1) We build out the virtual marketplace in concert with game development team, using our smart-contracts GUI and expertise to provide a seamless in-game purchasing experience within a fee-for-service or bundled model.
-Can replace online marketplaces in current games or be built into new ones on any platform
2) We can then sell follow-on maintenance (ie- any updates, distributed ledger technology functions, etc) to the software developers
3) Offer online exchange for players to trade currencies between different developers and/or games at a smaller spread than current options.
4) Apply developed GUI to new functions outside gaming as smart contract adoption increases
Develop currency exchange
Collaboratively build out virtual economy with game developer

8. Cross-Game Currencies Single Game Currencies
Competition
eBay – This entails gamers to auction or list the item or service that they are willing to provide on a “traditional exchange” and with USD, bitcoin, etc. being exchanged either before or after the transaction event
Battle.net Credit – Blizzard announced on February 7, 2017 that they will now allow World of Warcraft gold to be utilized across the company’s other titles, including Overwatch and Hearthstone
Cross-Game Currencies
Indirect Methods
Single Game Currencies
Simoleon (The Sims), Rupees (The Legend of Zelda), etc. – Use within native game can be extensive but is not transferable between titles

9. Risks and Mitigations
Labor costs exceed projections and development takes longer than projected
The game developers invest in and build out this capability themselves
Buyer power is strong in a consolidating market
Risks
Ensure a deliberate development plan to reduce issues – also, projections have leeway for profitability even with additional costs
A significant effort to attain a first-mover advantage and acquire early adopters
Clearly illustrate the workload and liability that will be avoided by buyers if they allow a 3rd party to own service
Mitigations

10. Competitive Advantage1
Enhanced security 2
Speed through conditional contracts 3
An exhaustive ledger of past transactions – evidence of credibility 4
The versatility of use for one-time item transfers, training, services, and many more possibilities

11. Five Year Plan Go Live Y1 Y2 Y3 Y4 Y5 and beyond
Assemble Technical Team and Build PoC
Solicit Game Developer for Pilot Case
Build Out Service Capabilities
Develop Full Product and Go Live
Build Exchange and Go Live
Expand GUI to Other Uses
Go Live

12. Revenue Projections Revenues from Development Revenues from Service
Games Developed
Year 1
Year 2
Year 3
Year 4
Year 5
Revenue Per Game
Small/Indie 1 4 8 10
$10,000
Mid-Level 2
$30,000
Existing 5
$100,000
New Blockbusters
$1,000,000
Revenue from Development $0
$170,000
$1,640,000
$4,720,000
Revenues from Service
 Game Size
Year 1
Year 2
Year 3
Year 4
Year 5
Annual Service Revenue/Game
Small/Indie 1 5 13 23
$2,000
Mid-Level 3 7
$6,000
Existing 6 11
$20,000
New Blockbusters
$500,000 $0
$36,000
$664,000
$2,808,000
Revenues from Exchange
Year 1
Year 2
Year 3
Year 4
Year 5
Real-Money Trade Market
$2,000,000,000
$2,200,000,000
$2,420,000,000
$2,662,000,000
$2,928,200,000
% Market Captured
0.01
0.03
0.05
Dollars Flowing Through $0
$24,200,000
$79,860,000
$146,410,000
Exchange Fees (% of Transfers)
0.02
Revenues From Exchange
$484,000
$1,597,200
$2,928,200

13. Hiring Projections *Founders will convert to CEO and CTO in year 3
Pay Grade
CEO 1
$225,000
CTO
$200,000
Developers 3 4 7 12 20
$120,000
Technical Service Reps 5 8 15
$100,000
Founders 2
$60,000
Admin Assistants
Total Salary Spend
$480,000
$660,000
$1,945,000
$2,905,000
$4,625,000
*Founders will convert to CEO and CTO in year 3

14. Cash Flow Projections Year 1 Year 2 Year 3 Year 4 Year 5
All Figures in '000’s
Year 1
Year 2
Year 3
Year 4
Year 5
Revenues from Funding
$1,000
$1,500
$2,000 $0
Revenues from Development
$10
$170
$1,640
$4,720
Revenues from Service $2
$36
$664
$2,808
Revenues from Exchange
$484
$1,597
$2,928
Salary
$480
$660
$1,945
$2,905
$4,625
G&A
$150
$66
$195
$291
$463
R&D
$100
$76
$135
$314
Contingency Expenses
$50
$523
Change in Cash
$220
$635
$282
$316
$4,532
Net Cash from Previous Year
$855
Cash Position
$1,136
$597
$4,848

15. Exit in 5 Years Target Price: $65 M Exit Strategy: Growth Rate: 3%
We plan to exit in 5+ years through acquisition by a software developer, PE firm, etc.
Exit in
5 Years
DCF Method
Multiples Method
Growth Rate: 3%
Discount Rate: 10%
Estimated Cash 5yrs: $4.5 M
Valuation: $64.75 M
Multiples Method
Multiple of Revenues: 5x – 10x
Estimated 5 yrs: $10.5 M
Valuation Range: $52 M - $105 M
Target Price:
$65 M

16. 1 A B ROI @ Funding $65 M >550% 550% 225% Seed
$1M in convertible notes (terms TBD)
>550%
Seed A
550%
$1.5 M for 20% stake B
225%
$2 M for 10% stake