P2P Games President, Jesse Lindsley, delivers a mini-case study to be published in the January 2006 edition of iGaming Business Magazine as part of a highly publicized Skill Gaming Supplement for the gaming and gambling industry. Over 8,000 copies will be printed and distributed to a subscription base of over 6,000 and approximately 2,000 more to attendees of two very large gaming industry events.

iGaming Business :: Skill Gaming MINICASE :: January ‘06
How do you build a pioneering skill gaming platform from the ground up?

In early 2004, there was no place online to play the games we played with friends and family - like backgammon, dominoes, cribbage, hearts, etc. - for money. Sure there were huge game portals where thousands of players could play, but the entertainment choices were one-dimensional: you could compete only for prestige. To us, it is more entertaining to play for money, whether that was for a quarter or a dollar a game. Online poker rooms had taken poker to a whole new level and were showing the way for people to play in head-to-head and tournament competitions for money. This approach was driving the entertainment experience - and thus the popularity - of the game.

So our vision was clear: to create a unique and entertaining player experience on the web by building a truly innovative online gaming platform for player-to-player skill games.

Now having a cool and original idea (and an experienced management team that is willing to work for sweat equity) is one thing, but execution means making good decisions and having a lot of things go your way.

Here is an overview of some of the key decisions we confronted in our early stages.

Build vs. Buy Software: Building it would take longer, but what we truly wanted didn’t exist. Fortunately, we had the technical and business acumen to build it at a fraction of the cost to buy.

Download vs. No Download Technology: Although downloadable clients are the industry standard, we felt the future of Internet gaming would be a no-download, browser-based experience. [We would end up building a platform that supported both solutions.]

In-House vs. Outsource Development: Overseas development would be cheaper, but we decided to mentor and grow our own talent. This would provide the nimbleness we would need to support our product suite. [We would end up with a small team, two deep in every skill set. As we expanded, we would utilize outsourced international labor.]

White-Label vs. Controlled Branding: Our long-term goal was to white-label our platform to strong, established brands to increase the overall player liquidity in our network. However, as a start-up, we needed a destination where we could have creative control and where the player community could help drive our requirements. [We would find a strategic partner that shared our vision and would become our first fully branded operator.]

License vs. Royalty Revenue Model: As a start-up, we were okay with either model, as long as both parties treated the other like a partner and had parameters that made the arrangement a win-win proposition. [To this day we have seen more revenue sharing than just pure licensing deals.]

Private vs. Institutional Financing: Operational decisions had been made, we had put in our own money to build a prototype, and we had a detailed business plan, so now we needed to raise the capital required to build the platform. After testing the institutional waters and finding too many “gaming climate” challenges in the US, we decided to raise the money through private investors.

One year after having implemented these key decisions, and completed our seed round of financing, we had built the P2P Games player-to-player gaming platform (See Technical Product Overview) and released several classic skill games including backgammon, dominoes, cribbage and gin. We had launched our first branded operator, Club Games, and in July of 2005 Club Games Backgammon began generating revenues.

Today, P2P Games is actively working with online operators to provide a platform to power their own branded skill gaming releases. We plan to be supporting three large operators by the end of 2006. On the investment front, we continue to look for and are evaluating both private and trade investors who believe in our team, and what we have accomplished to date. It is our expectation that with these operators and investors as strategic partners, we will ultimately be able to achieve our vision.

P2P Games Technical Product Overview

P2P Games has constructed a world-class multi-threaded Game Engine capable of handling tens of thousands of concurrent players. The extremely scaleable solution can be deployed across multiple servers, while the player perceives a single community. As demand grows, hardware may be added without a software re-configuration or interruption of service.

This complex system also offers secure, synchronous communication between Macromedia Flash and a Java Application Server. Using Flash, rich client interfaces, and animations offer an experience beyond the normal web presentation. Games come alive with movement and sound, offering lightweight yet powerful code delivered to all major browsers. Any game player, whether they use a Windows, Apple, or LINUX based system, can play on the network without installing software.

About the Author:

Jesse Lindsley, the President & Co-Founder of P2P Games, is responsible for all company operations including strategy, marketing, finance, customer service and sales. He has an accomplished consulting and management career in information technology and has worked with several e-commerce start-ups. Click here to email Jesse.
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