Tapping the Console Gamer Community

Former gamer Jeff Banton noticed a lot of chatter within the online video gaming community about wanting a safer way to spend hard-earned money in online tournaments.

Gamers commonly participate in make-shift online tournaments in which they wager against one another, trusting that they will receive their winnings through individual PayPal accounts; but they are increasingly getting cheated out of their winnings because there was no one to moderate the tournaments.

"Some weren't getting paid," Banton said.

So he and three partners created an online community called UGX1.com (Under Ground X-change), and after a year of development, the Costa Rica-based site went live in February 2006.

Operating out of Banton's home office, also in Costa Rica, patent pending (Banton has applied for a Costa Rican patent) UGX1.com is, in essence, is a clearing house for gamers who want to create and play for money in online video game tournaments.

It is like a betting exchange, but instead of members betting on horses or sports teams, they are betting on gaming tournaments in which they are the players.

UGX1.com games and tournaments are played much like terrestrial tournaments, but the difference is that members orchestrate their own teams and match-ups.

To play in a single-bet game (with two players) or a tournament (with multiple players), they must log on to the site and select a game from either the PlayStation2 or the Xbox menu, which each contain about 120 of the latest games in categories like sports, fighting, shooters and driving.

After a member has chosen the game and established a single bet game or tournament, he must play the chosen game or round in its entirety through the subscription-based Sony PlayStation or XBox Live Web site. Upon finishing the game or the round, all players in the competition must upload to UGXI their "end-game results, " which are examined for errors and inconsistencies by specially trained staff in a separate office. (Each staff member plays every game on the site to make sure that he knows what to look for during a tournament).

"We need to make sure that any game footage sent by any member is correct and has not been edited to deceive a staff member," Banton said.

When the examination produces satisfactory results, the winner is issued payment into his bank account through online money transfer service Neteller.

"Or if they'd like," Banton said. "They can pick up their money in cash at a Western Union office."

Player accounts are adjusted in real time, so when a player wins a game or tournament, it is reflected instantaneously. It can take up to two hours, however, for the money to post to the bank account.

UGX1 has four main membership levels, three of which carry monthly membership fees, and each provides a different type of access to the games. Bronze members pay no monthly fee, but have very limited access to the games. But Silver, Gold and Platinum members pay $10, $12 and $15 respectively, and access increases with each level. The Platinum level guarantees full access to the games on either the PlayStation2 site or the XBox site. A fifth level, the Supreme membership, grants full access to games on both sites.

In two months, UGX1 has gained 57 members through only word of mouth.

"The strange thing," Banton said, "was that we had 13 members that pre-registered last year before anybody knew anything about it."

It wasn't until April 12 that Banton began to promote the company, and even then it was only through a modest press release. He admits, though, that he is hoping the release will generate enough investor interest to help move his company's main operations into a proper office.

As for future plans, Banton said the company plans to expand its operations into England where it has also applied for a patent. They hope to be the only company in the industry providing a secure platform for online video game tournaments.

The Internet has been inundated with innumerable online casinos catering to millions of gamblers, and the online video gaming community, comparatively, represents a small portion of the I-gaming industry. While online video gaming is not an exclusive club, it does take a lot of time and dedication to belong. Banton humbly accepts the fact that his site will not appeal to everyone.

"Unless you're an avid gamer," he said, "it's not for you."

Nevertheless, UGXI sees great potential in targeting the "avid gamer" niche, which appears to have an insatiable thirst for this type of product.