12. Metaverse Religion, McDonald's Virtual Trademarks, GTA NFT, Gala Games $5B Spending, Sequoia Polygon Investment
In this episode, we discuss faith and worship in the metaverse, McDonald's filing trademarks for virtual goods and restaurants, Take-Two Interactive considers bringing NFTs to the world of Grand Theft Auto, Gala Games' plans to spend $5 billion in order to expand its NFT offering, Sequoia Capital India leads a $450 million investment round in Polygon blockchain, and so much more!
Episode 12 Keywords: Faith, Worship, Metaverse, McDonald's, Trademarks, Virtual Goods, Virtual Restaurants, Take-Two Interactive, Grand Theft Auto, NFTs, Gala Games, Sequoia Capital India investment, Polygon blockchain
Transcript
Welcome to the metaphysics podcast. The Metaverse and web three are bringing about the
Unknown:biggest revolution since the internet itself. With your hosts Paul the prophet Dawalibi And Jeff the
Unknown:juice Cohen. We will be bringing you the latest Metaverse, business news and insight into what it
Unknown:all means. The meta business podcast starts now.
Paul Dawalibi:From the boardroom to the metaverse. This is the meta business podcast. I am
Paul Dawalibi:Paul Dawalibi. I'm joined today by my friend and co host, Jeff, the juice Cohen. For those of you
Paul Dawalibi:who are new to the meta business podcast. What we do here is we cover the biggest Metaverse, topics
Paul Dawalibi:and news of the week, but we look at all of it through a business and C suite lens, we dissect,
Paul Dawalibi:we analyze the business implications of everything happening in this Metaverse industry. Jeff, how
Paul Dawalibi:you doing this week?
Jeff Cohen:I'm doing good. I'm battle battle in here. Got a little little case of the COVID. So
Jeff Cohen:you know if I started, middle, you know, a second time suck, and I podcasted through both of them.
Jeff Cohen:So you did you know, hon Metaverse news never stops. And so we will always be here no matter
Jeff Cohen:what. But yeah, definitely, you can probably hear it in my voice a little bit congested. But we've
Jeff Cohen:just have so much going on that, you know, I couldn't take a week off. You never know who would
Jeff Cohen:even get to replace me. I don't know if there's anyone who could.
Paul Dawalibi:I mean, I mean, really the juice. No one can replace the juice. That's just the
Paul Dawalibi:reality. Just like no one can replace the Prophet. You can't replace greatness like that. Sure. I
Paul Dawalibi:will say congratulations, by the way. 12 episode, this is episode 12. And every episode has been the
Paul Dawalibi:audience has been bigger than the last. So thank you all for tuning in every week, we really
Paul Dawalibi:appreciate it. I know I've gotten a lot of great feedback from people that you guys are really
Paul Dawalibi:loving the content. And Jeff and I really love doing it. So, Jeff, let's jump into some Metaverse
Paul Dawalibi:news this week. I think I have to start with it's maybe become sort of this shows. Hallmark, I would
Paul Dawalibi:say is I've got to jump into something that's maybe the most important Metaverse news this week.
Paul Dawalibi:Nevermind the $5 billion of investment or five and a half billion dollars in investment. This story
Paul Dawalibi:definitely took the cake for me. The headline here is faith in the metaverse a quest for community
Paul Dawalibi:and fellowship, and the articles talking about how some churches and in this case they were using a
Paul Dawalibi:Mormon church as an example that some churches are turning to the metaverse and VR as a way to
Paul Dawalibi:deliver service services to their congregation. So it says here ranging from spiritual meditations
Paul Dawalibi:and fantasy worlds, to traditional Christian worship services with virtual sacraments. In hyper
Paul Dawalibi:realistic church like environments. Their devotees, says, say the experience offers a
Paul Dawalibi:version of fellowship that's just as genuine as what can be found at a brick and mortar temple.
Paul Dawalibi:And then they have a quote here, which was the most I liked it, the most important aspect to me,
Paul Dawalibi:which was very real, was the closer connection with God that I felt in my short time here. This
Paul Dawalibi:is the quote from the founder of something called from VR Church, which was founded in 2016 by DJ
Paul Dawalibi:Soto, a former high school teacher and pastor, and and there's images here, which if you're watching,
Paul Dawalibi:if you're listening, unfortunately can't see it. But images here of some of the virtual worlds, and
Paul Dawalibi:Pastor DJ Soto who started VR church, I'm curious, Jeff, short, man, yeah, we won't spend too much
Paul Dawalibi:time on this. But as we see, and we I think we've used the first story now in almost every episode,
Paul Dawalibi:as it is a great example of the metaverse and VR and these concepts infiltrating aspects of our
Paul Dawalibi:lives that maybe we wouldn't expect. Where do you put worship and church? On this list of sort of,
Paul Dawalibi:did you expect the metaverse to get there that, you know,
Jeff Cohen:we're gonna have religions and I'm interested more to see, you know, the first
Jeff Cohen:Metaverse only religion or something like a Metaverse cult, which maybe would be more more
Jeff Cohen:exciting. But you know, this is this is actually I think this is sort of a creative way for you know,
Jeff Cohen:this, this church to reach out to a larger congregation. And we've seen in the in the 90s and
Jeff Cohen:early 2000s. Even now, like televangelists have made hundreds of millions of dollars like
Jeff Cohen:broadcasting on on TV and getting in front of a bigger audience. A lot of them I would say are a
Jeff Cohen:little bit sleazy and maybe frauds, but it makes sense. I mean, I bet this is gonna catch on. And
Jeff Cohen:it could bring in a new audience or a younger demographic to the church, and then maybe you
Jeff Cohen:typically see. So kudos to the church for for kind of being innovative. But yeah, I'm waiting for the
Jeff Cohen:first metaverse. I think that's going to be going to be interesting that the Branch Davidians of the
Jeff Cohen:of the metaverse or something like that will be entertained.
Paul Dawalibi:The good news is, if you drink the Kool Aid in the metaverse, you'll be fine.
Jeff Cohen:That's your avatar only die.
Paul Dawalibi:Your, your your avatar may suffer, but you'll be fine. No, but seriously, like from a
Paul Dawalibi:business standpoint, I think one of the reasons the business of religion has declined in years,
Paul Dawalibi:right, like attendance, things like that. Right. Some of the, the specific numbers around religion
Paul Dawalibi:have declined, is because, at least anecdotally, I think there's this sort of barrier, right, which
Paul Dawalibi:is you have to go and it's only on a Sunday morning. And, and, you know, if you don't make it
Paul Dawalibi:for that one hour, you sort of miss I'm talking in this case, Catholic church, but you know, all
Paul Dawalibi:religions sort of have the schedule around around services and things like that. But does the
Paul Dawalibi:metaverse potentially bring religion back in a serious way? Or bring maybe people who had not
Paul Dawalibi:considered religion before back as sort of a customer? Because it's so easily accessible?
Paul Dawalibi:Right, I can be in my I can be in my underwear on my couch, on a Tuesday evening. And I don't have
Paul Dawalibi:to put my suit on on a Sunday morning.
Jeff Cohen:Yeah, I mean, I guess talking a little more abstractly, we're definitely we're talking
Jeff Cohen:about religion a little bit as a business, which is, which is interesting. Just in general, fair, I
Jeff Cohen:think just in general, when you whenever you widen distribution and create more accessibility and
Jeff Cohen:engagement, you're going to see sort of metrics like that go up, and you're going to see people
Jeff Cohen:coming more often and, and getting more involved and kind of widening the distribution. So short
Jeff Cohen:answer, yes. Do I think this is gonna change religion as we know it? Probably Probably not. But
Jeff Cohen:I think someone like this is innovative and could find a little bit of a following, and certainly
Jeff Cohen:grow their their congregation more than they would, if you will.
Paul Dawalibi:It's funny, and the one the last, I'll end on this, and then we'll move on. But if
Paul Dawalibi:you look at every pop culture kind of portrayal of the metaverse was whether it's a book or a movie,
Paul Dawalibi:for the most part, there's always a, you know, a messianic or like a worshipped figure who's sort
Paul Dawalibi:of like the master of the metaverse, so to speak, like a Christ like figure, whether you're talking
Paul Dawalibi:about sort of like the matrix or Ready Player One, or, you know, all these modern portrayals of what
Paul Dawalibi:we might call meta versus it's interesting, because I wonder if that's where we do end up
Paul Dawalibi:right.
Jeff Cohen:Are you saying someone's gonna create someone's gonna create a religion around that
Jeff Cohen:figure?
Paul Dawalibi:Yeah, or, you know, some someone who's a leader in this in these virtual worlds
Paul Dawalibi:because they're either a leader of a company or whatever, becomes almost like a, a religious
Paul Dawalibi:figure who is worshipped. If they have some, some hand in the creation of this Metaverse, right? You
Paul Dawalibi:almost create a potentially messianic figure. Because we're creating a whole new universe a
Paul Dawalibi:whole new world, right? Yeah, it's interesting. And it'll be interesting to see how, you know,
Paul Dawalibi:traditional religions compete in the same way. A lot of traditional industries will have to
Paul Dawalibi:compete. Let's move on to McDonald's McDonald's in the news, and, and, you know, we talked about
Paul Dawalibi:McDonald's in the, in the context of Elon Musk, if you remember. But this McDonald's story I thought
Paul Dawalibi:was interesting. And the headline here is McDonald's files trademark for Metaverse based
Paul Dawalibi:virtual restaurant. So they've applied for a trademark for virtual goods, services and virtual
Paul Dawalibi:restaurants and cafes. You know, their expectation, I guess, is that they will need to
Paul Dawalibi:operate potentially McDonald's restaurants and virtual worlds, so they want to make sure they own
Paul Dawalibi:the name. This follows Panera has filing for Panera verse. And other big companies like Nike,
Paul Dawalibi:Walmart Skechers, who have all made similar filings in the past. It says here, this in this
Paul Dawalibi:Forbes article, it says when you see this critical mass of large companies making this many new
Paul Dawalibi:trademark filings, it's very clear, this is coming. Do you buy this? Jeff, one of the things
Paul Dawalibi:here says, you know, every brand is gonna make a filing like this within the next 12 months. So
Paul Dawalibi:first of all, do you buy that piece of it?
Jeff Cohen:I think I saw I do by that. I mean, you know, every time you use words like every it's
Jeff Cohen:it's hard to necessarily get on board with that. But you're seeing this 100% It's it. Brands are
Jeff Cohen:moving to the metaverse totally believe that. And I'll sort of give a little bit of both sides to
Jeff Cohen:the story because I kind of see both sides. On on one hand I mean, it's it's a little bit like when
Jeff Cohen:the internet first started, I mean every brand needed to eventually create a website. Some did it
Jeff Cohen:early. Some waited till very late, but you needed if you were a brand, you needed some sort of
Jeff Cohen:presence on the worldwide web. If we assume that the metaverse is the next iteration of the World
Jeff Cohen:Wide Web, the internet, every brand will need some sort of presence in the metaverse. I think I buy
Jeff Cohen:that. That's a logical argument. The problem that where it breaks down for me is with a brand like
Jeff Cohen:McDonald's, like I just don't see, like brands like Nike, brands, like Under Armour, something
Jeff Cohen:where you're selling clothing, digital items, something people wear to represent themselves.
Jeff Cohen:We've talked about this a lot. I'm fully on board with that. I think that makes all the sense in the
Jeff Cohen:world that people are going to want to kind of show their show off their avatars were things in
Jeff Cohen:terms of eating food in the metaverse like, I I'm not sure I see a need to eat food in a digital
Jeff Cohen:world. But you, you don't digital worlds do not have the same constraints as physical worlds. We
Jeff Cohen:don't really need to consume food in order to have our avatar, walk around and be in the world. Maybe
Jeff Cohen:that will change which there will be resource management, stuff like that. I kind of hope it
Jeff Cohen:doesn't because, you know, I just don't think it's a constraint we need to add into the world in the
Jeff Cohen:metaverse. And even when McDonald's it's like it's a it's a fast casual restaurant or not investiga
Jeff Cohen:it's fast food. Like there's nothing sexy about eating McDonald's. Like if this was some five star
Jeff Cohen:restaurant wanted to create like a really cool virtual experience of like going to like a
Jeff Cohen:Michelin star restaurant. I think I could get on board with that too. But there's just like nothing
Jeff Cohen:cool about going to a McDonald's and eating a Big Mac. I don't know, tell me I'm wrong.
Paul Dawalibi:Oh, look. On our sister podcast business of esports. We often have this argument
Paul Dawalibi:of like esports teams pretending to be media companies and lifestyle brands. Right? Could you
Paul Dawalibi:make the argument that this is McDonald's going? We're more than just fast food. We're kind of a
Paul Dawalibi:lifestyle brand. Right? And therefore, we need to have a presence in the metaverse that is that is,
Paul Dawalibi:you know, branded McDonald's. And and so that's my first sort of counter argument is, could you argue
Paul Dawalibi:that Panera and McDonald's are actually lifestyle brands? And I'm sure the people in those marketing
Paul Dawalibi:departments want to believe that they are right. And we could think that's silly. And we could
Paul Dawalibi:think that's totally off base because they're fundamentally just the Egg McMuffin and Big Mac
Paul Dawalibi:company, but like, they may see themselves as lifestyle brands and how they fit into people's
Paul Dawalibi:lives may translate to the metaverse and it may not be about selling a burger in the metaverse,
Paul Dawalibi:but it may be about selling McDonald's branded whatever, or giving away McDonald's branded
Paul Dawalibi:whatever. The bigger sort of implication I saw from this is, and you brought up a great point in
Paul Dawalibi:the early days of the.com era, right of web, what we're calling even web one, right? Most companies
Paul Dawalibi:didn't go and like immediately secure their business. name.com. Right. But the reality is, a
Paul Dawalibi:lot of companies were actually quite slow to doing that, because they didn't see the value. I see
Paul Dawalibi:this interesting trend here where companies don't want to make that mistake sort of again, right.
Paul Dawalibi:And there's there's a couple implications there, which I think are interesting one, you're going to
Paul Dawalibi:get a lot of squatters, right, who listen to this podcast or read this news. And go wait a second.
Paul Dawalibi:Now I'm going to go and try and squat on a whole bunch of, you know, names in the metaverse. That
Paul Dawalibi:was my first thought. And then there's my second thought immediately after was, but wait a second,
Paul Dawalibi:like what this means fundamentally, is that all the real estate conversations we've been having in
Paul Dawalibi:the metaverse right are sort of meaningless, that the trademark here is way more valuable than
Paul Dawalibi:owning a virtual person. piece of land like a.com, to me is like real estate. It's a virtual piece of
Paul Dawalibi:land that you own and no one else can own right? But putting up something that looks like a
Paul Dawalibi:McDonald's in the metaverse, you'd have to buy all the land to stop someone from putting that up. The
Paul Dawalibi:trademark happens to be kind of a legal shortcut here that protects them from all meta versus
Paul Dawalibi:right, whether it's decentraland or sandbox, so that they don't need to necessarily go make plays
Paul Dawalibi:in each of these meta verses today. They know long term, they've protected their trademark in this
Paul Dawalibi:general application.
Jeff Cohen:I see what you're saying. I mean, we kind of need Jimmy on here to bring the legal, you
Jeff Cohen:know, to dive deeper into the legal workings like I don't know how that would actually work. I guess
Jeff Cohen:what you're saying is the brand is more important than then kind of the having the real estate or
Jeff Cohen:you know them being first to market there.
Paul Dawalibi:Is that what you're saying? What I'm saying is I think the brands are going to have
Paul Dawalibi:an easier time. On one hand protecting They're their brands in the metaverse. And on the other
Paul Dawalibi:hand, they have a harder time because this is far more decentralized than then the web is right?
Paul Dawalibi:Like, the web has only one McDonald's dot com, right? Whereas in the metaverse today or this
Paul Dawalibi:environment today, you're saying there'll be multiple McDonald's in this metaphor, there's 50
Paul Dawalibi:Different meta verses right? And McDonald's if I'm the company is not going to go build a McDonald's
Paul Dawalibi:in decentraland, and build a McDonald's and sandbox and build a McDonald's here and build a
Paul Dawalibi:gun, right? Like, I don't know if that makes sense. Whereas, like, just trademarking the brand,
Paul Dawalibi:for this application sort of gives them blanket protection, until the ecosystem has sort of sorted
Paul Dawalibi:itself out.
Jeff Cohen:So here's a quite more of an existential like a higher level question. Will
Jeff Cohen:Will the brands that are popular kind of IRL slash even in web one, web two? will those be the brands
Jeff Cohen:that dominate the metaverse, you think? Or will we see completely new brands? I suspect the answer is
Jeff Cohen:probably a little bit of both. But where do you fall on that spectrum? Like, it's going to be
Jeff Cohen:completely new brands native to the metaverse versus like, Hey, if you're a McDonald's, you're
Jeff Cohen:going to come in, and you're going to be the virtual burger shop or, you know, virtual casual
Jeff Cohen:restaurant, as I keep calling it fast, casual, fast food restaurant.
Paul Dawalibi:I mean, it's a really good question, Jeff. And I think, you know, I'm
Paul Dawalibi:guessing we agree on this, that there's probably, if you look historically at what happened with web
Paul Dawalibi:one, web two, and we're talking about this as web three, like if history remains consistent, there
Paul Dawalibi:will always be like this mixture, right, some old brands will make the transition successfully, will
Paul Dawalibi:succeed will do very well. Some traditional brands will not make the transition and may fall by the
Paul Dawalibi:wayside and they disappear. And then you will get sort of web three native brands that grew up there
Paul Dawalibi:live there live and breathe that space and exist only there. It's definitely going to be a
Paul Dawalibi:combination, right? McDonald's, trademark or not presence in the metaverse or not, is not going
Paul Dawalibi:anywhere, right? Like if they say, We don't care about the metaverse. People are not going to stop
Paul Dawalibi:eating Big Macs, right? That's just they can afford to miss this boat. Now. And I mean, from a
Paul Dawalibi:present standpoint, from a marketing standpoint, that's more questionable. Do I think brands can
Paul Dawalibi:just sort of close their eyes and say, We don't need to reach this audience? That I think is a is
Paul Dawalibi:a bigger mistake. I don't know. Do you agree with that?
Jeff Cohen:Yeah, no, I do agree with that. I actually think it's interesting that you're
Jeff Cohen:talking you kind of right there, just at the end, sort of separated the marketing to people in the
Jeff Cohen:metaverse versus actually being kind of present in the metaverse. Do you? Do you see that as a big
Jeff Cohen:distinction? Or is that just something that popped into your head?
Paul Dawalibi:It's, uh, you know, I know I'm gonna get comments from people saying it's like,
Paul Dawalibi:purely semantic but like, McDonald's having a presence in the metaverse is a marketing
Paul Dawalibi:activation, right? Like, they're not doing it to Sell Burgers in the metaverse. They're doing it
Paul Dawalibi:to, you know, expose the brand to more people. So it is a little bit of just like us twisting
Paul Dawalibi:language. But I think I genuinely do believe you're either there for commerce, or you're there
Paul Dawalibi:for marketing like an exposure. And, and for McDonald's. They could probably miss the entire
Paul Dawalibi:boat on the Commerce piece. And be fine. I think if they miss the boat entirely on the marketing
Paul Dawalibi:piece and the exposure piece that that's where I worry.
Jeff Cohen:Yep. It's almost as simple as your brands that are selling the avatars and brands
Jeff Cohen:that are selling to people, right. So if you're selling stuff in the real world, it's on the
Jeff Cohen:people. If you're selling stuff in the metaverse to be consumed in the metaverse avatars, I think
Jeff Cohen:that will be an interesting distinction for brands as they enter the metaverse to kind of parse out
Jeff Cohen:what their strategy is.
Paul Dawalibi:Yeah, and and, you know, because a lot of, as we've seen, there's a lot of crossover
Paul Dawalibi:too, right? Like Nike can sell a physical good, and the digital good. They can sell a good to a
Paul Dawalibi:real human being and to an avatar. And so that strategy between that sort of, are we doing
Paul Dawalibi:commerce or are we doing marketing, I think becomes an interesting conversation and seeing
Paul Dawalibi:where all these brands land. I agree will be interesting to watch. Let's talk about Jeff, let's
Paul Dawalibi:move on to the game that I think almost everyone listening or watching this show probably is aware
Paul Dawalibi:of and that's Grand Theft Auto and Grand Theft Auto was in the news because their parent company
Paul Dawalibi:sort of made a statement about the NFT opportunity. So the headline here is Grand Theft
Paul Dawalibi:Auto game publisher, highly convinced and this is in quotes by NFT opportunity. Take two's
Paul Dawalibi:optimistic view on the opportunity in NF T's also comes with caveats and caution around the crypto
Paul Dawalibi:sectors. Speculative side and they have a quote from our friend Strauss Zelnick, who by the way
Paul Dawalibi:was on the business of esports podcast. If you're don't know about the business of esports podcast,
Paul Dawalibi:you should go check out that episode with Strauss Zelnick, who was amazing. But he said he was
Paul Dawalibi:quoted in this article, he says, we're highly convinced there's an opportunity for NF T's to fit
Paul Dawalibi:with take two's offerings in the future. He says, We believe in rare goods, we believe in
Paul Dawalibi:collectibles. The concern we have is that there's speculation going on. We want to make sure that
Paul Dawalibi:consumers always have a good experience every time they engage with our properties. And losing money
Paul Dawalibi:on a speculation is not a good experience. So we're going to stay away from speculation. Stress,
Paul Dawalibi:easily one of the most well respected people in all of gaming take to has been a very massively
Paul Dawalibi:successful company, obviously, Jeff, what do you think of stress is very concise take here on NF
Paul Dawalibi:T's and games? Well, I
Jeff Cohen:think he's pretty spot. So first of all, you'll never hear me say bad thing about
Jeff Cohen:stress. I feel like he he's pretty spot on about about most things he gives things on, and
Jeff Cohen:obviously a very well respected person industry. I think he's I think he's right here. I mean, it's
Jeff Cohen:very obvious. Gamers are willing to buy digital items they see value in digital goods,
Jeff Cohen:collectibles, scarcity, these are things that are economic certainties. And I think he's right about
Jeff Cohen:the fact that right now, the NFT market, and then of the gaming market, there's a ton of
Jeff Cohen:speculation. And to his point, speculation is great when you're the person who buys low and
Jeff Cohen:sells high, but it's not as great of an experience for the people who buy high and sell low. So I
Jeff Cohen:think it's a smart way of saying, hey, there's a lot of froth in the market right now, we see that
Jeff Cohen:there's something here, but we're not going to be the ones diving in at first sticking your neck out
Jeff Cohen:and kind of ruining the experiences that we've tailored to consumers currently. I think it's very
Jeff Cohen:similar to what we saw with EA. I think Strauss maybe said it a little bit more diplomatically and
Jeff Cohen:intelligently, then that Andrew Wilson did. And, you know, he didn't have to walk back prior
Jeff Cohen:comments, because I know we covered Andrew Wilson, EA CEOs take on last week's episode. So I think
Jeff Cohen:he's right here. It is interesting to juxtapose it versus Ubisoft, which I know is probably the next
Jeff Cohen:thing we're talking we'll talk about, but I don't know if there's anything more. I mean, I agree
Jeff Cohen:with Strauss. I don't know if I can add even more to that.
Paul Dawalibi:I mean, the question I have for you is, is this first of all? Well, first question, I
Paul Dawalibi:think you're the one who told me on their earnings call. Correct me if I'm wrong that Strauss didn't
Paul Dawalibi:make one mention of anything. metaverse.
Jeff Cohen:I did in fact, I tweeted that actually at Jeff Cohen. 23. Give me a Yeah, I made sure I
Jeff Cohen:did Ctrl F on the transcript before I tweeted it just to make sure I wouldn't look like an idiot.
Jeff Cohen:No mention of the word Metaverse, which was pretty striking versus the last couple of earnings calls
Jeff Cohen:that Activision EA, you know, Facebook, obviously, you know, analysts asking people talking about it.
Jeff Cohen:No mention of it. I don't know if that is maybe just a signal of where we are in the hype cycle. I
Jeff Cohen:think Facebook's earnings and then subsequent drop, even though it really had nothing to do with
Jeff Cohen:Metaverse, maybe put a little bit of a damper in the buzzword. I think you have a little bit of
Jeff Cohen:fatigue from people that are have jumped in with two feet, maybe? I don't know, what do you make of
Jeff Cohen:that was just a coincidence?
Paul Dawalibi:No, because I take that and I put it together with this article. Right? And I'm
Paul Dawalibi:going and then the EA conversation we had last week and there's sort of this pattern now it seems
Paul Dawalibi:to me of maybe most of these gaming companies really don't have any strategy or any, like any
Paul Dawalibi:view whatsoever on where this is going and what they should be doing about it. Like what I'm
Paul Dawalibi:seeing is a lot of very well constructed sound bites that say a whole lot of nothing. Again, I
Paul Dawalibi:have the most massive respect for Strauss you know, a friend of the podcast like I think it's
Paul Dawalibi:this was just a really an he is tremendously good at this. Like this was an incredibly polite and
Paul Dawalibi:diplomatic way of saying basically nothing, right? Because the truth seems to be that almost every
Paul Dawalibi:single one of these gaming companies and I'll throw even Activision Blizzard in there, right?
Paul Dawalibi:That even the ones who gave a lot of lip service to the word metaverse. Most of them really don't
Paul Dawalibi:know what they're doing. And I don't mean that they they're not smart. I mean, most of them have
Paul Dawalibi:not formulated any kind of strategy around NF T's or the metaverse or how this affects and plays
Paul Dawalibi:into their business, short term or long term
Jeff Cohen:on NF T I think on NF T's you're absolutely right. metaverse. Depends how you
Jeff Cohen:define Metaverse, because, you know, you could argue some of them are doing a lot of the things
Jeff Cohen:you would do for them, like Grand Theft Auto Online, basically created 95% of what I would
Jeff Cohen:consider a Metaverse 510 years ago. So like that, I don't know if I would necessarily agree with the
Jeff Cohen:NF T's part, I think people got blindsided by it a little bit. I mean, I think NF kind of web three
Jeff Cohen:gaming and ft gaming is really probably less than a year from a year old in terms of coming into the
Jeff Cohen:mainstream, like, maybe over this past summer, people really started talking about Axi infinity
Jeff Cohen:and the ability, like played around kind of crept into the mainstream consciousness. So in the span
Jeff Cohen:of, you know, massive triple A publisher, and kind of like, how much these guys have going on. That's
Jeff Cohen:a pretty short period of time to like, that's like one or two board meetings, you know what I mean?
Jeff Cohen:Like, there are quarters like that's, that's a very short period of time to formulate an entire
Jeff Cohen:kind of strategy. And there's something I was thinking when you were talking, I'm curious, do
Jeff Cohen:you equate this like, was there a similar thing with esports, maybe 10 years ago, where the
Jeff Cohen:attitude toward from publishers was like, we know, this is a thing. It's interesting. We're following
Jeff Cohen:it. But we don't really know exactly how we're going to be involved, what we're going to do, but
Jeff Cohen:we know it's important, and we're there, but we, besides that, we don't know what we're doing.
Jeff Cohen:Because to me, it kind of feels similar.
Paul Dawalibi:I agreed, I think super insightful. And, and I would I would extend that to just not
Paul Dawalibi:just esports, right, like every fledgling tech related kind of industry feels like they have a
Paul Dawalibi:moment like this where everyone recognizes there's something there. I guess what bothers me is it's
Paul Dawalibi:it's a little bit of just the lip service, right? Like the the statements that say nothing, I just,
Paul Dawalibi:I'm a I'm a as the Prophet, I'm the truth teller, in my mind, I would much rather them and I know
Paul Dawalibi:this would never happen to Jeff, the IR guy would never allow this to happen. But like, I'd love the
Paul Dawalibi:CEO to come out and be like, Look, we know this thing's interesting. We have no clue what we want
Paul Dawalibi:to do with it yet. Right? Like, yeah, come back to us in two years, and maybe we'll have a good
Paul Dawalibi:strategy. And I know that like, but that'll never happen. You'll never hear that. No. But that would
Paul Dawalibi:make me happy. Because I do think that's sort of what's being said here. Just reading between the
Paul Dawalibi:lines. Yes, that
Jeff Cohen:is 100%. The translation. A lot better.
Paul Dawalibi:The way stress said it did sound a hell of a lot better. I want to end here on two
Paul Dawalibi:stories, I want to put them together. And I just think indicative of, again, the massive
Paul Dawalibi:opportunity that's being presented in this space right now. The first one here, gala games to
Paul Dawalibi:expand NFT offerings with $5 billion. It says here in the article since its launch in 2019 Gala
Paul Dawalibi:games, has been growing steadily, the platform has 1.3 million monthly active users has sold 26,000
Paul Dawalibi:and fts. The firm in this $5 billion in the $5 billion, they're going to assign here to these
Paul Dawalibi:expansion efforts. 2 billion is going to be on gaming, 1 billion on music, 1 billion on movies,
Paul Dawalibi:and the remaining 1 billion on the gala theme park and fts. Aside from the 2 billion budgeted for
Paul Dawalibi:gaming, the firm also launched $100 million gaming fund with C two ventures, and they're going to
Paul Dawalibi:invest in new blockchain games. So I just want to park that for a second, by the way Snoop Dogg is
Paul Dawalibi:gonna miss out on this story. Like we could certainly have done the whole episode, which means
Paul Dawalibi:then there was another story, which, you know, had we not read that one first would have just also
Paul Dawalibi:been eyewatering. And this one is Sequoia makes a big bet on web three leading $450 million
Paul Dawalibi:investment in polygon blockchain. And for those that don't know, polygon is a blockchain network
Paul Dawalibi:that serves as a support layer to Aetherium. It says here polygon wants to become a decentralized
Paul Dawalibi:version of Amazon Web Services. And obviously, it has attracted here, Sequoia, maybe one or the
Paul Dawalibi:other than Andreessen Horowitz. Those two are maybe the biggest names in all of venture capital.
Paul Dawalibi:And so polygon raising 450 million. Jeff, maybe just your general thoughts on both of these
Paul Dawalibi:stories. I don't know if you want to start with the gala.
Jeff Cohen:I mean, that's a coil was the polygon one is interesting. I mean, they're doing great. I
Jeff Cohen:mean, they just hired Ryan White to kind of run their gaming, Polygon gaming business. It's pretty
Jeff Cohen:similar how they're trying both these companies are trying to attract games to be built on top of
Jeff Cohen:their platform. The goal one, I thought was a more interesting article. There's so little more
Jeff Cohen:numbers. But one thing, the first thing that kind of sticks out to me is just the amount of money
Jeff Cohen:flowing into this. The fact that it's 1 billion not 1 million, 1 billion with a B is going to be
Jeff Cohen:invested into gala theme park and fts. That is a mind blowing amount of I don't even know what a
Jeff Cohen:gala theme park NFT is, but I want to go start a company that builds them. Because there's a
Jeff Cohen:billion dollars being funded on these things. that's mind blowing. And I think I tweeted this
Jeff Cohen:saying like, would, too, with this much capital flowing into kind of the web three gaming space,
Jeff Cohen:you're bound to see a few mainstream hits in the next call it 18 months, the knock that we've come
Jeff Cohen:back to time and time again, with web three, gaming, Blockchain gaming is a games aren't fun.
Jeff Cohen:And that has largely been true. So far, with this much money coming into the space, someone's going
Jeff Cohen:to build a fun good game, where you're going to see a game that goes mainstream and blows up way,
Jeff Cohen:way on a way bigger scale than an xe currently, the second number that strikes me and terrifies me
Jeff Cohen:a little bit, when I'm thinking about this, is, if you scroll up a little bit for people watching, it
Jeff Cohen:said 1.3 million now this time, million with an M, monthly active users on the platform. Yeah, that
Jeff Cohen:is really, really, really low. If you think about the current, you know, smartphone, addressable
Jeff Cohen:market, there's like 7 billion people with a smartphone. And the amount of money that's being
Jeff Cohen:invested into mobile games right now is probably less than $5 billion in a year, maybe that that's
Jeff Cohen:a little bit off. But the point is, there's a ton of money chasing a market that currently just
Jeff Cohen:isn't that large. And I think we all are very bullish on it, and believe that the addressable
Jeff Cohen:market will dramatically expand. But right now, this is a really, really, really niche market. And
Jeff Cohen:there's going to be a lot of capital that's burn chasing, chasing this, because not every project
Jeff Cohen:can work. But the addressable market
Paul Dawalibi:isn't really that different here. I get they only have 1.3 million monthly active
Paul Dawalibi:users today. But is gala games total addressable market, any different than Zynga has total
Paul Dawalibi:addressable market? Or kings? total addressable market? Like, and I go back to your first point,
Paul Dawalibi:which is, you know, one day we're going to make a good game, or, or it will, the the industry is
Paul Dawalibi:going to prove one of my thesis I have, which is the as a function of being a, a blockchain based
Paul Dawalibi:game, they're fundamentally just glorified pyramid schemes. And that means you have to make a game
Paul Dawalibi:that allows for a pyramid scheme, and therefore the game may never be games may never be good,
Paul Dawalibi:right? Like, yeah, I would love for you to be right here, Jeff, and that it's just a matter of
Paul Dawalibi:someone being a little bit more creative. That gets a game to, you know, a billion users and, you
Paul Dawalibi:know, wow, kind of longevity and success. And, and then it's, it just so happens to be a blockchain
Paul Dawalibi:based game, and maybe gala games. This is where that $2 billion of investment in gaming goes, I
Paul Dawalibi:don't know, right to solve those problems. But I'm a bit of a skeptic here. Also, I just where I'm
Paul Dawalibi:not a skeptic, is I think the total addressable markets. No different, right? Well, anyone today.
Jeff Cohen:So I think you're right, in terms of the total addressable market, if you define it as
Jeff Cohen:gamers, then yes, but the question is, do you define the addressable market as anyone who
Jeff Cohen:theoretically could go play a game on this, or anyone who's on the platform currently? Because if
Jeff Cohen:I, if I were to ask you, if you were a Roblox developer, what is your addressable market? Would
Jeff Cohen:you say, well, there's, you know, 12 billion people on the earth. So technically, they all
Jeff Cohen:could play Roblox games. Or would you say, well, Roblox has 50 million? Da us? That's what the
Jeff Cohen:addressable market is.
Paul Dawalibi:I mean, that's different. You see my Gala. Because, yeah, I see your point. But gala
Paul Dawalibi:here actually develops games, right? They're not, they're not necessarily just the platform for
Paul Dawalibi:other people to develop games, right. So that, to me, the 1.3 million is across all the games that
Paul Dawalibi:they've produced and distributed. I think it's it's not unreasonable to define the total
Paul Dawalibi:addressable market for gala games as whatever the total addressable market is for mobile gaming.
Paul Dawalibi:Right, like it made their own mobile games fundamentally, you know, the fact that they're
Paul Dawalibi:blockchain based games in the background and you need a crypto wallet when you sign up. Doesn't to
Paul Dawalibi:me change really the total addressable market that drastically so I think it's an interesting point,
Paul Dawalibi:that the number is low. But obviously, the billions that are being spent is because they
Paul Dawalibi:think this essentially consumes mobile gaming. That's That's my guess. Right? That has to be part
Paul Dawalibi:of the thesis here. Yeah. And I would argue, with part with the polygon story that's got To be part
Paul Dawalibi:of sequoias thesis as well right that whatever people are going to build on polygon has a total
Paul Dawalibi:addressable market that is far beyond the narrow scope of web three as it stands today or crypto as
Paul Dawalibi:it stands today now yeah person they chose to go to go help manage that that's a different that's a
Paul Dawalibi:different issue. But this is you know, to me this is two totally different plays right polygons and
Paul Dawalibi:infrastructure play gal is much, much more b2c Where I'm amazed with gala frankly, and I
Paul Dawalibi:surprised surprised you didn't you jump on this because I thought you'd be bothered by this is
Paul Dawalibi:like the billion dollars on music and the billion dollars on movies. When you're fundamentally sort
Paul Dawalibi:of you're I mean, you're called gala games you're a gaming company they
Jeff Cohen:clearly say You know, I can't take all the I can't take all the good the good juicy
Jeff Cohen:things
Paul Dawalibi:but you know, maybe they're gala games is just there's a learning here that maybe
Paul Dawalibi:every game developer should be opening their eyes to right like maybe Activision Blizzard should
Paul Dawalibi:have a a an equal like a proportionately large budget for for music and movies based on their IP
Paul Dawalibi:in the same way gala games has allocated you know 40% of this $5 billion dollars to those two things
Paul Dawalibi:I think is interesting so maybe they're just ahead of the curve and and and if the blockchain base
Paul Dawalibi:games are leading the way in some of these things that to me makes me makes me less skeptical at the
Paul Dawalibi:very least right Jeff like cuz we complain all the time Activision Blizzard should be making movies
Paul Dawalibi:and TV shows. And now you've got a blockchain based gaming company that budgets $2 billion for
Paul Dawalibi:this stuff. I knew a great article if we didn't applaud it and say, you know, good job, or at
Paul Dawalibi:least a nice, good, good for you to try.
Jeff Cohen:No, no arguments for me hear.
Paul Dawalibi:That brings us Jeff to the end of the podcast. I feel like that flew by. For those
Paul Dawalibi:of you who are enjoying it, please go leave a review on Apple podcasts on Spotify, Google Play
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Paul Dawalibi:your friends. We really appreciate it. Of course. We appreciate you listening watching, but we want
Paul Dawalibi:to grow it as big as possible. Jeff, thank you as always, and see all of you guys next week.
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