VERSUS SYSTEMS INC COM NPV (OTCMKTS:VRSSF) is one of the very few pure play ways to participate in the explosive eSports space. In fact, we can only name a few off-hand that have as much direct tie-in: Electronic Arts Inc. (NASDAQ:EA), Activision Blizzard, Inc. (NASDAQ:ATVI), and TENCENT HLDGS LTD UNSP ADR EACH REP 1 ORD (OTCMKTS:TCEHY). But VRSSF is only stock on that list that can boast of an extreme undervaluation and under-ownership by investors in the broader market.
In other words, if there was a “lotto ticket play” in the 94% CAGR eSports market segment, it has to be VRSSF. The last time we looked at this stock, we parsed through its recent announcement that its proprietary prizing platform will be integrated into Valhalla Games Studios International Ltd.’s “Devil’s Third Online”, in development as a free-to-play launch for PC. That continues to be a major driver of the action in the stock at present.
VERSUS SYSTEMS INC COM NPV (OTCMKTS:VRSSF) frames itself as a company developing a software platform that allows video game publishers and developers to offer prize-based matches and tournaments of their games. This proprietary technology is being integrated into select games that are planned to be in market in early 2017.
The company is trading at a current market cap value of $21.6M. VRSSF has an excellent balance sheet situation according to recent filings, with over $1.4 million in cash on the books, balanced by under $200K in total current liabilities.
The company is pre-revenue at this point. But, as noted above, they are actively cultivating some strong potential for monetization.
“Just Like We Drew it Up”
As noted above, the key catalyst of late for shares of VRSSF is the integration of its prizing platform into Valhalla Games Studios International Ltd.’s “Devil’s Third Online.” That nicely dove tails with the company’s recent shoring up on the IP front.
Specifically, the company has filed multiple patent claims with the USPTO to expand upon their existing portfolio of prizing, promotion, and financial technologies that enable brands to reach the rapidly growing competitive gaming audience of players, spectators, and broadcasters.
The key idea is to dig a moat around what the company describes as “a system that seeks to match competitive game players and spectators with prizing from their favorite brands through a unique Conditional Prize Matching system. This proprietary system allows advertisers and brands, as well as video game developers and publishers to provide prizing to players and spectators for their in-game or in-app skills and behaviors wherever they play.”
Matthew Pierce, CEO of Versus Systems says, “The current explosion in gaming – from casters to spectators to eSports competitors – shows us that everyone loves games that involve real stakes. Players want to play for prizes. Spectators want to watch matches that matter. There are over 1.5 billion of these players and spectators that until Versus, brands have been unable to reach. This audience has extraordinary purchasing power with income levels 40% higher than the average U.S. household, an average age of 35, and a 41% female demographic. Versus solutions allow brands to interact with this $100B audience in a powerful way – by rewarding their gaming skill with downloadable content, real money, and physical goods.”
“The Versus solution is an in-game or in-world prize distribution network – a network that makes it possible for players and spectators to play games they love for real stakes. Versus allows game developers and brands to offer both real-world and digital prizes to players who love their games, making those games more engaging,” said John O’Connell, Versus Head of Business Development. “What player doesn’t want their in-game dominance to be rewarded with the latest gear, apparel, and more? That’s what Versus is all about.”
Matching this outlook, the stock has been positively on fire. This should give a pretty good idea why.