Advertising Has Finally Broken Into Gaming

Gen-Xers and Millennials are the first generations in history born to the video gaming age. And they’ve been ‘gamified’ from birth, with 2.6 billion people playing video games worldwide, and it is generally accepted by industry pros that Americans alone spend 50 million hours a day gaming.

According to a Newzoo market intelligence report, the video games market is set to top $108- billion this year— and more growth is forecast for years to come.

Now, there’s one thing gamers absolutely hate about gaming: advertising. But one little-known company may have the answer to the secret to advertising success that’s eluded the gaming industry thus far.

What Facebook has done for social media ads, and what Google AdWords has done for search and internet, Versus Systems Inc. (CSE:VS; OTC:VRSSF) is adapting for the gaming industry – taking advantage of one of the most highly engaged audiences that exists.

This is a vast market, and a vast opportunity that has been missed by advertisers with the wrong approach. It’s an audience too huge to annoy with pop-up ads and takeovers. Gamers want rewards and prizes—and they want them to be relevant.

A little-known small-cap has come up with an innovative solution that creates a triple win situation for gamers, game publishers, developers and advertisers alike. And this is where advertising dollars could add substantially to the revenue totals.

And they are surrounding their technology with dozens of patent applications– those building blocks that constitute the foundation of successful internet based companies like Google, Alphabet, Drobox and many other tech empires.

Versus Systems is offering every gaming company brand in the world the first-ever relevant way to access the 2.6 billion people who play PC, console, and mobile games—driving engagement for brands and game developers, while allowing players to play the games they love for real prizes.

Versus’ prizing and promotions platform allows game developers and brands to offer prize-based matches to players, all integrated directly into games. No more pop-ups, takeovers, or banner ads. No more irrelevant advertising—this is pure, targeted brand engagement, patented technology matching prizes to players, encouraging them to play more, and buy more.

Gamers are the most engaged audience on the planet, and Versus is charging out of the gate with an ground-breaking deal to provide in-game prizing to 704Games, which has an exclusive license to produce video games for NASCAR, the biggest spectator sport in America and a multi-billion Dollar a year business, according to Forbes.

Versus Systems Inc. (CSE:VS; OTC:VRSSF) has partnered with 704Games to provide in-game prizing in 704’s upcoming NASCAR titles. 704Games is working with Versus Systems prizing and promotions platform to provide players with opportunities for in-game prizing and real-world rewards in their upcoming titles on mobile and console. In spring 2017, 704Games released NASCAR Heat Mobile, the first authentic NASCAR racing game on mobile to feature 40 stock cars racing simultaneously. 704Games also recently announced the upcoming release of Nascar Heat 2, which will be available on Xbox One, Playstation 4 and PC.

With an online game advertising market projected to reach some $7 billion by 2019, according to Statista, the Statistics Portal, and over $10 billion annually within five years. If the gaming industry gets it right this time with advertising, it could be worth much more.

It’s all about what consumers want, and they want to win when they game. Major brands have already signed up for the massive increase in retention and brand loyalty and thousands more are potential partners, including the hundreds of already existing NASCAR sponsors. Versus is the first-mover on this, and it’s already moving at NASCAR speed.

This is a unique opportunity in an advertising market dominated by players like Google, Facebook, Amazon, Tencent, EA, and Activision Blizzard, all of whom could benefit from access to this patented prizing technology.

Here are 5 reasons to keep a close eye on Versus Systems, Inc. (CSE:VS; OTC:VRSSF) as the gaming industry evolves:

#1 THE MARKET IS MASSIVE, GROWING, AND HIGHLY ENGAGED
The gaming industry is huge, and growing – an ideal market for Versus’ interactive media advertising.

Video games are—all by themselves—a $100-billion industry that’s growing constantly. In two decades it’s multiplied 26 times, making it the fastest revenue grower in the entertainment industry. The market is expected to reach $108.9 billion this year—a 7.8 percent increase over 2016.

Pokémon Go became a mobile cultural phenomenon overnight last year, and virtual reality systems reached the mass market. This year, mobile apps should take 42 percent of that $108.9 billion in gaming revenues worldwide. Virtual reality games will be an entirely different segment by 2020, when they are expected to account for $10 billion and nearly 9 percent of the market, according to Digi-Capital research.

This year, digital game revenues are expected to account for $94.4 billion of the global video gaming market.

All of this is a huge opportunity for in-game advertising—but only if brands and products get it right.

Research and Markets estimates that the global video games advertising market will grow nearly 14 percent by 2020, with a boost in female gamers driving much of it.

In-game advertising will be worth over $10 billion a year in the next five years, according to the Entertainment Software Association (“ESA “) and KPCB.

This is the globalization of the gaming industry, and here’s why, according to the ESA:2.6 billion people play video games worldwide
* Americans together spend 50 million hours a day immersed in games
* 1/3 of women between 20 and 45 have played a video game in the last 24 hours. A massive, highly-engaged, very desirable audience that could be worth multi-billions all on its own.

But video gaming is only one segment of the interactive market Versus is targeting: Virtual reality and augmented reality streaming media will also be a top priority.
* Twitch.tv has 10 million daily streamers broadcasting
* eSports has 161 million viewers per month
* Over 43 million people watched the LCS (League of Legends) finals last year – more . than watched game 7 of the 2016 MLB World Series, and more than watched all six games of the NHL Stanley Cup Finals combined.

And beyond the players and spectators who make up this massive market, it is important to remember all of the giant corporations who work in this space, who could all benefit from growth in the gaming advertising sector: giant advertising companies like Google and Facebook, to retail and media giants like Amazon, to gaming companies like EA, Activision-Blizzard, and Tencent.

#2 THE VERSUS BUSINESS MODEL WORKS FOR EVERYONE:
Gamers get prizes. Brands and game developers get engagement. Versus shares revenues.

Ours is an attention economy, and rewards improve engagement. It’s true for many sectors today, but makes even more sense with video games.

All Americans combined are already spending 50 million hours a day gaming, but if they were rewarded for doing it, they’d probably play even more. This is the value-add for gamers that Versus is revolutionizing.

Versus (CSE:VS; OTC:VRSSF) has worked with media and psychology experts from Yale, Stanford, and UCLA, to conduct studies and surveys of thousands of players and consumers, and the data is clear: players will play longer, and more often when real prizing is a part of the gaming reward feedback loop. Engagement increases when the stakes are real – and players feel better about prizes that they’ve earned than they do about commercials or free samples that they’ve been given.

In one study, players went from not wanting to play a particular game at all, to playing for hours when given a tangible goal.

And this is not limited to men ages 18-25. Surveys show that one third of women between 20-45 have played a video game recently – another massive market with huge purchasing power. Unlocking brands, coupons, and gift cards for playing mobile games could be a multi-billion- dollar opportunity for that demographic alone.

The data also suggests a huge secondary effect in social media as players who win prizes are more likely to share their experience online on Facebook, Snapchat, Twitter, and Instagram – providing authentic earned media for the brands who participate.

For brands, it’s about exposure and real engagement, and the line-up of Versus users so far is impressive. Among them:

* RockStar Energy Drink, a Versus brand partner, allows players to compete in game for exclusive access to Rockstar events, apparel and branded products. Rockstar targets athletes and rock stars with 20 flavors of energy drink in stores in over 30 countries, and sponsors major action sports, motor sports and live music events across the country. It touches millions, and it’s using Versus to target them more effectively, and hopefully one-up rivals like Monster Beverage (NASDAQ:MNST) and Red Bull.
* Han Cholo, the wildly popular retailer of handmade, pop-culture- inspired apparel, whose fans include Kendrick Lamar, Brad Pitt, Miley Cyrus, Snoop Dogg, and the list goes on. Han Cholo signed a deal with Versus in September last year.
* Tier 1 Accessories, a gaming accessories designer, developer and manufacturer with global reach.

More Fortune 500 companies sponsor NASCAR than any other sport. That means that all those brands will have new ways to engage through Versus, if they choose that opportunity.

The problem, until now, has been this, says Versus founder and CEO Matthew Pierce: “Games are the most engaging, immersive forms of media, and it has always been a challenge to create authentic brand experiences within those worlds. Any new element has to make the game more fun. Fortunately, there’s nothing more fun than winning real things that you care about. We want Versus-enabled games to be the most fun, most engaging games on earth. That will make them most valuable places for brands to be.”

Winning something, says Pierce, gives players an “emotional connection to what they won.”

That connection encourages them to come back again and again, and also to share their victories with their friends on social media.

#3 VERSUS HAS A UNIQUE DASHBOARD FOR CREATING IN GAME CAMPAIGNS
Bringing big brands, developers, and gamers together in a scalable, programmatic way, Versus (CSE:VS; OTC:VRSSF) is attempting to become the AdWords for the of the gaming industry.

And it’s a triple win for brands, players, and game developers.

This is how it works:

Brands can easily upload prizes into the Versus dashboard – anything from digital goods to gift cards, to event and movie tickets, to haircare, skincare, snacks, energy drinks, and apparel. Those prizes can then be deployed into Versus-enabled games. The Versus system makes it easy to create campaigns based on time, location, and inventory, and because each game appeals to a unique demographic, working with game developers on specific games will allow brands to reach the exact players that the brand is looking for.

Versus works with brands and game developers to offer real in-game prizing, managing prizes, campaigns, and win conditions. In addition to providing a lift in engagement, this approach also allows Versus to collect rich data about player preferences.

The platform is fast, flexible, and scalable – opening the gaming world to all kinds of brands from the world’s largest beverage companies to local and niche advertisers. No more annoying popups, no more banner ads, no more pulling the player out of the experience. Big brands don’t have to spend millions on one-off deals that may or may not work, and smaller brands don’t have to dream of one day reaching the most engaged audience around. Versus makes it easy for any company to upload prizes, find the right games and players, and run successful, targeted campaigns.

Versus also removes the burden of compliance weighing down developers and publishers. The unique system takes care of player verification and dynamic regulatory compliance for in-game prizing. So developers can focus on making the best games for their players.

#4 THE BUSINESS MODEL CREATES CLEAR REVENUES FOR VERSUS AND GAME DEVELOPERS

Versus’ (CSE:VS; OTC:VRSSF) primary business model is ‘free to play, sponsored by brands’.

Versus gets paid on a per-prize or per-coupon code basis for every prize and/or coupon distributed on the system. Developers also see a major upside with an incremental revenue streams in addition to added engagement, because Versus splits the prize revenue with the game developer.

This is how it works:

Prizes can be anything from downloadable content to consumer products, which include physical goods, gift cards, event tickets or discounts on merchandise. A single publisher can mean millions of transactions, when you consider that games like Grand Theft Auto have sold 35 million units.

And Versus is coming onto the market with some great prizing partners.

Brands like Rockstar Energy Drink, Han Cholo and Tier 1 are already signed up.

Versus will also be integrating into more NASCAR titles in 2018, and a lot more products and brands are expected to be added to the platform as new games launch.

#5. A POWERFUL IP PORTFOLIO
Versus (CSE:VS; OTC:VRSSF) is surrounding its platform with patent filings, which they’ve been doing since 2014.

And patents are what protect billion-dollar empires. Think AdWords, which represents some 90 percent of the value of giants like Google / Alphabet. That’s because they managed to create a mechanic that integrates everything you search for into advertising.

Versus has filed U.S. and international patents covering dozens of claims for systems and methods to:

But there’s a goldmine of data here, too. Versus collects information that could be as valuable to brands and products as AdWords are to Google. Take Rockstar, for instance. They usually don’t know who’s buying their drinks—or why, or even when. With Versus, they know everything connected to the game you played. They know where you were when you won it, what you were doing when you redeemed your prize, what flavor you like and what prize you wanted.

This is huge data on the marketing playing field—and a potential value revenue stream for Versus.

Press Play Now, and Everybody Wins

Smart investors realize the next stage of the gaming industry is here. The advertising industry has a problem reaching out to the $106 BILLION and growing online gaming and streaming audience. Versus has an answer. It’s that simple. And it’s a first-time win-win-win set-up, for brands, developers, and gamers. Plus, they have the patents pending.

Right now, Versus is focused on the launch of 704 Games’ NASCAR Heat Mobile, scheduled for Q1, 2018. Everything has been building up to this moment, and now the technology will be going live. When it does, expect to see it… and their story… post to the front page of the financial news.

With more Fortune 500 companies sponsoring NASCAR than any other sport, and a huge number of gamers who are interested in NASCAR related games, Versus is debuting with one of the best possible partners, for one of the biggest audiences in the world, appealing to the biggest brands.

The global gaming market has grown 26x in the last 20 years. We’ve seen the industry evolve from games as a product, with people only able to buy cartridges and discs, to a world where online multiplayer, mobile, in-game purchases, and game subscriptions have turned gaming into a $100+ billion a year market – the fastest growing sector of entertainment. There is no other wellspring of attention and engagement like gaming, with 2.6 billion gamers worldwide.

Versus is here to reach those gamers – as many of of them as it can– with prizes that the gamers love, in the games that they love to play. Versus makes games more fun, and it’s the newest advertising opportunity available.

Versus Systems Inc. (CSE:VS; OTC:VRSSF) could be one of the big winners. Game on.

Other companies to watch in the space:

Shopify Inc (TSX:SH) (NYSE:SHOP) is a Canadian e-commerce company with more than 500,000 companies rely on Shopify’s real-time e-commerce, including Tesla, Budweiser and Red Bull, among many others. Shopify manages their e-commerce machines, and its stock is now up to over $106 right now, with a market cap of over $10 billion. CNET called the application “clean, simple, and easy-to- use in a review of the Shopify platform.

The company’s online presence and sheer reach make it an ideal buy for investors. Shopify makes purchasing goods and services easy for anyone – and in a time where convenience is king, Shopify surely has staying power.

Snap Inc. (NYSE:SNAP) To much fanfare, Snap IPO’ed earlier this year and managed to surprise many analysts. Snap Inc. operates as a camera company. It offers Snapchat, a camera application that helps people to communicate through short videos and images. The company also provides a suite of content tools for partners to build, edit, and publish snaps and attachments based on editorial content.

The company IPO’ed at $17 and quickly saw its share price reach $25, before falling back to IPO levels and below. While snapchat continues to look for ways to innovate, investor sentiment in this stock has soured and some now see it as a ‘dead stock walking’

Tencent (NASDAQOTH:TCEHY) is a Chinese holdings company. The reason this company made the list is due to their incredibly smart buyout of Riot Games. Riot Games was purchased for a whopping $400-million, but Tencent made a great move. Riot Games created the world’s most popular game – League of
Legends. With over 100 million players logging over ONE BILLION hours per month, the game has a large and dedicated player base that is only growing.

Sony Corp (ADR) (NYSE:SNE) is a tech heavyweight. From TVs to video games, Sony covers anything and everything media-related. The company’s infamous Walkman was in the hands of every young person throughout the 1980s and 1990s. But Sony’s biggest hit was arguably the PlayStation gaming console. With over 100-million units sold, the original console sparked a new wave of gaming. The incredible success continued with the PlayStation 2, 3, and the current series, the PlayStation 4. Sony’s PlayStation 4 is now a multi-platform entertainment device, with the ability to stream movies and music, play Blu-ray and DVDs, purchase and play video games, and even browse the web.

Sony’s partnerships and innovative technology make it an appealing investment for those looking for a company with longevity. Sony isn’t going anywhere and is sure to continue its entertainment dominance for years to come.

Zynga Inc (NASDAQ:ZNGA): Mobile gaming is one of the fastest growing parts of the gaming industry, with an increasingly broad range of consumers. Zynga is taking advantage of this growth, having already produced some of the most popular games out there – most notably, Farmville and Words With Friends.

As this industry grows and becomes increasingly intertwined with social media and the everyday life of the everyday individual, the value of companies like Zynga is on its way up.

It has been a strong year so far for Zynga, with continued upward growth – and as competition heats up, it is sure to be these big names that reap the benefits of the ever-growing gaming industry.

By. Ian Jenkins

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FORWARD-LOOKING STATEMENTS. Statements in this communication which are not purely historical are forward-looking statements and include statements regarding beliefs, plans, intent, predictions or other statements of future tense. Forward looking statements in this article include that the gaming industry continues to grow; that Versus Systems may have a system that would be accepted by gamers; that its prizing platform will appeal to video gaming companies and will encourage gamers to play more and pay more; that Versus Systems’ patent applications will become patents and that the patents can protects its intellectual property; the size of the potential market and market demographic for gaming prizes; that a lot of brands and prizes are expected to be added to the platform; that new games will join the Versus platform; that data gathered from gamers can be used and can be a potential revenue stream for Versus; that Versus will have a major financial impact when NASCAR Heat Mobile game goes live, expected in Q1 2018; and that Versus can partner with a number of game developers for inclusion of Versus’ platform in new games. Forward looking statements involve known and unknown risks and uncertainties which may not prove to be accurate. Actual results and outcomes may differ materially from what is expressed or forecasted in these forward-looking statements. Matters that may affect the outcome of these forward looking statements include that markets may not materialize as expected; prizes in gaming may not turn out to have as large a market as thought or be as lucrative as thought as a result of competition or other factors; Versus Systems may not be able to diversify or scale up as thought because of potential lack of capital, lack of facilities, regulatory compliance requirements or lack of suitable employees or contacts;; Versus is dependent on the success of game developers; Versus’ patents may not be granted and even if granted, may not adequately protect Versus’ intellectual property rights; Versus is a development stage company and to date has no revenues; and other risks affecting Versus in particular and the gaming industry generally. The forward-looking statements in this document are made as of the date hereof and the Company disclaims any intent or obligation to update such forward-looking statements except as required by applicable securities laws.

Risk factors for the video gaming industry in general which also affect Versus include the following: please also review the risk factors listed in the annual filings of public companies in the gaming industry:
– The business is intensely competitive and “hit” driven. Versus may not deliver “hit” products and services, or consumers may prefer competitors’ products or services.
– The business is dependent on the success and availability of products developed by third parties, as well as Versus’ ability to develop commercially successful platforms for these products.
– Technology changes rapidly in the business and if Versus fails to anticipate or successfully implement new technologies or adopt new business strategies, technologies or methods, the quality, timeliness and competitiveness of its products and services may suffer.
-Versus may experience security breaches and cyber threats.
-Versus’ business could be adversely affected if consumer protection, data privacy and security practices are not adequate, or perceived as being inadequate, to prevent data breaches, or by the application of consumer protection and data privacy laws generally.
– The products or services Versus distributes through its platform may contain defects, which could adversely affect Versus’ reputation.

-Versus’ business partners may be unable to honor their obligations or their actions may put us at risk.

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