Episode 16

full
Published on:

14th Mar 2022

16. Man City Metaverse, Web 3 For Normies, Limewire NFT Marketplace, Immutable $200M Funding

In this episode, we discuss Manchester City building the metaverse's first soccer stadium, Dapper Labs making Web3 technology approachable for "normies," Limewire repurposing itself as an NFT marketplace, Immutable achieving a $2.5 billion valuation after closing a $200 million funding round, and so much more!

Episode 16 Keywords: Manchester City, metaverse, soccer stadium, Ethiad Stadium, Dapper Labs, Web3, Limewire, NFT, NFT marketplaces, Immutable, valuation, funding rounds

Transcript
Unknown:

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. From the boardroom

Paul Dawalibi:

to the metaverse. This is the metal business podcast. I am Paul Dawalibi. I'm joined

Paul Dawalibi:

today by my friend and co host, Jeff, the juice Cohen, those of you who are new here, welcome to

Paul Dawalibi:

the official podcast of the metaverse, what we do is we cover the most interesting topics and

Paul Dawalibi:

stories from 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 amazing industry. For those of

Paul Dawalibi:

you who are new here, welcome. If you haven't yet, make sure you subscribe to the podcast, go on

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Spotify, Apple podcast, Google Play, wherever you listen to this, hit the subscribe or follow

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button. It'll alert you when a new episode drops. And leave a review. If you love the content, leave

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a review five star rating and review that really helps others to find the podcast. Jeff, how you

Paul Dawalibi:

doing this week?

Jeff Cohen:

I'm doing well. I'm doing well. You know not not as good as last week. You know, at

Jeff Cohen:

this time last week, you were scrambling around the office trying to assemble the studio. So we

Jeff Cohen:

could record our live stream, which should we do after we record this that should should of course

Jeff Cohen:

check out but yeah, you were scrambling around trying to set it up because we Lindsay, our other

Jeff Cohen:

co hosts, you know on the business of esports live stream and I surprised Paul and showed up at his

Jeff Cohen:

office basically last minute that hey, let's record this all in person. So Paul scrambled

Jeff Cohen:

around for about an hour while Lindsay and I ate pizza. And then we got it done. And it was

Jeff Cohen:

awesome.

Paul Dawalibi:

It was a lot of fun. I will say I got to admit it in the moment. It wasn't fun

Paul Dawalibi:

scrambling. But the end result was fun. And I've got so much feedback from viewers saying like it

Paul Dawalibi:

was the most fun podcast, it was so much more like animated and like everyone was more aggressive,

Paul Dawalibi:

right? Because when you're in the same room, there's there's not this physical barrier. It

Paul Dawalibi:

definitely was a lot of fun. I will say you know for those if you if you're a fan of this podcast,

Paul Dawalibi:

maybe you discover this because you're you know, an enthusiast around what's going around on around

Paul Dawalibi:

the metaverse or you're looking to learn. We also do this other podcast called the business of

Paul Dawalibi:

esports, which you should go check out which is more gaming focused gaming and esports focused and

Paul Dawalibi:

met a woman which is a podcast focused entirely on highlighting and elevating women within the gaming

Paul Dawalibi:

and Metaverse industry. So definitely go check out subscribe to all three metal business met a woman

Paul Dawalibi:

in business of esports I promise you will love all the content. Jeff, let's let's jump into some news

Paul Dawalibi:

here because I think there's I love when we've gotten to the point here where we're starting to

Paul Dawalibi:

get some recurring themes, right and some some discussion that I think gets deeper and deeper

Paul Dawalibi:

every time we revisit, but also just some cool news stories. And I like I think we always try and

Paul Dawalibi:

start with with a fun story. And this one, obviously you flag this caught my eye. Big big

Paul Dawalibi:

name in Metaverse news and a very big headline and the headline here is Manchester City to build

Paul Dawalibi:

Etihad Stadium in the metaverse so the celebrated soccer team has begun the initial stages of

Paul Dawalibi:

building its iconic home stadium in the metaverse so fans can be part of live and recorded matches

Paul Dawalibi:

around the world. They're going to build this virtual replica of their stadium at TED stadium.

Paul Dawalibi:

It'll be the team central hub in the metaverse. They signed a three year agreement with Sony,

Paul Dawalibi:

who's going to provide it says virtual reality to experts to use Image Analysis and skeletal

Paul Dawalibi:

tracking technology. So fans should be able to enjoy games and watch games in this what they call

Paul Dawalibi:

immersive Metaverse setting. I will just read the quote because I think it's interesting the quote

Paul Dawalibi:

here from the Chief Marketing Officer at Man City says the whole point we could imagine him having a

Paul Dawalibi:

Metaverse is you can recreate a game, you could watch the game live your part of the action in a

Paul Dawalibi:

different way through different angles. And you can fill the stadium as much as you want. Because

Paul Dawalibi:

it's unlimited. It's completely virtual. Where would you rank? So I feel like we're going to need

Paul Dawalibi:

some kind of, of ranking system like a board right where this is like pure metaverse. And like on one

Paul Dawalibi:

end of the scale, and on the other end of the scale. It's sort of like not the fake meta versus

Paul Dawalibi:

the wrong term, but like a small step and a big step. Metaverse, right? Yeah. Where are you

Paul Dawalibi:

putting this? And is this just glorified VR that We're calling Metaverse like, do you like this?

Paul Dawalibi:

I'm curious. Your thoughts?

Jeff Cohen:

Yeah, I, I'm on the fence here. And, you know, I hate to do this and play sort of both

Jeff Cohen:

sides because I am, I am the juice and I like to have this persona where you know, regardless of

Jeff Cohen:

how strong I actually feel, I like to go all in on one side or the other, usually just whichever side

Jeff Cohen:

the opposite of the person who just spoke is a Mister Mister devil's advocate in that way. But

Jeff Cohen:

I'll sort of give give both sides here. I mean, on one hand, I like the fact that a they're

Jeff Cohen:

experimenting with this, I think, you know, whenever you're a brand and you're getting into a

Jeff Cohen:

new space, and you're innovating, cool, I think that's we should be supporting that we should be

Jeff Cohen:

plotting that. I also like the fact that it's adding accessibility, right if your man city, and

Jeff Cohen:

vs. Man City or man Yeah. Man City, no, you know your team like Man City, and you have literally

Jeff Cohen:

hundreds of millions of fans around the world. Many, many, many of them have never been and

Jeff Cohen:

probably will never get the opportunity to go to your amazing cathedral of a stadium. With

Jeff Cohen:

Metaverse, you now give them the opportunity to do that. Maybe they increase the fan hood, they go

Jeff Cohen:

and now they want to buy a jersey because they went and felt like they were really part of the

Jeff Cohen:

team. So from that respect, I like it. It's cool. It's accessible. It's forward thinking. What I

Jeff Cohen:

don't like about it is pretty much everything else. And kind of what you just talked about where

Jeff Cohen:

I don't know, it's just it's a novelty thing. And maybe people do it once. And it's a cool thing to

Jeff Cohen:

have done. But I don't see this as replacing the experience of going to a football stadium in real

Jeff Cohen:

life. And I don't even think it's particularly exciting in the sense of it doesn't seem to me to

Jeff Cohen:

be bringing more to it. One of the things we've always come back to when we're talking about the

Jeff Cohen:

metaverse and digital worlds is we're always somewhat bearish about creating real world

Jeff Cohen:

experiences in digital space. They get to the metaverse, we'll have aspects of that. But there's

Jeff Cohen:

just something that's not that exciting about walking around the digital shopping mall, or

Jeff Cohen:

digital supermarket or digital soccer stadium because we can do those things in real life. One

Jeff Cohen:

of the great things about games is you can do and experience things that you can't do in real life.

Jeff Cohen:

So put me in the action make me the view of the ball make me you know, fly above the stadium in a

Jeff Cohen:

you know, in a helicopter or something? Like, those are the kinds of things that I think would

Jeff Cohen:

be more interesting to me. But yeah, I mean, that's kind of both sides. Where do you fall?

Paul Dawalibi:

Yeah, I mean, I'm curious. This, I was gonna say the same thing about flying over.

Paul Dawalibi:

It's funny, you said that, but like, I'm curious how true like this replica is gonna be because

Paul Dawalibi:

they talk about they're taking dimensions of the stadium, the whole bit like, does that mean? Some

Paul Dawalibi:

people will actually have to sit in the bleachers, right? Like, like, Will everyone be able to occupy

Paul Dawalibi:

the best seat in the house? Or are they going to fill this Metaverse version of their stadium the

Paul Dawalibi:

same way they feel the physical version, and some people are gonna have good seats and some are

Paul Dawalibi:

gonna have horrible seats. Like I'm trying to put like this scale together where one is like, um,

Paul Dawalibi:

put on VR goggles to go shopping at Walmart in virtual reality, right? That's like, the we'll

Paul Dawalibi:

call it how Metaverse see is something right? The Metaverse see scale. You've got one, which is

Paul Dawalibi:

shopping at Walmart and VR on one end.

Jeff Cohen:

So basically doing experiences you do in real life, but just in a virtual world,

Paul Dawalibi:

right. And like 10 is and not just replicating virtual, like real life, like the most

Paul Dawalibi:

mundane of real life experiences, right? Like shopping at Walmart. And 10 would be like, the

Paul Dawalibi:

oasis from Ready Player One, right? Like something like that. So you know, you've got this how

Paul Dawalibi:

Metaverse see is something, where would we where would we put this? It feels a little bit like a

Paul Dawalibi:

two or three maybe right? Depending on the execution. I just think it's such a missed to your

Paul Dawalibi:

point, right? Like, where's the flying above the play? And I would argue why if we're making the

Paul Dawalibi:

audience, if we're putting the audience in the metaverse, why not the players too, right? Like

Paul Dawalibi:

why don't we put them on omni directional treadmills with VR headsets, and they're no longer

Paul Dawalibi:

playing in real life? They're playing in a virtual, you know, metaverse. Also, why are we

Paul Dawalibi:

limiting this to just the the people in attendance and watching? It doesn't go far enough. I think

Paul Dawalibi:

this, you know, on this scale, anything below a five feels like we're not moving the ball forward.

Paul Dawalibi:

We're not you know, this is sort of a brand activation, more than actually getting us closer

Paul Dawalibi:

to capital T capital and metaverse. The Metaverse, right.

Jeff Cohen:

I would agree with that.

Paul Dawalibi:

It's funny though because Man City, you know, soccer. What do you think was the

Paul Dawalibi:

impetus for Man City to do this? Right. You're in the you're in the boardroom of Man City. Is it

Paul Dawalibi:

Just Is this a marketing exercise? You think?

Jeff Cohen:

I think it is. And I actually, as you were scrolling I caught, I think it looked like

Jeff Cohen:

they had a sponsorship with tezos blockchain company. So, you know, as we know, there's a ton

Jeff Cohen:

of overlap between sports fans, Blockchain enthusiast, and people who are interested in

Jeff Cohen:

Metaverse kind of, you know, all three of them kind of overlap. Overlap a ton. I said interlab.

Jeff Cohen:

That's not even a word. So yeah, they have this partnership with with tezos. So

Paul Dawalibi:

and well, it was it was actually Manchester United that had the tezos partnership

Paul Dawalibi:

that they mentioned, which is the rival right, so maybe they

Jeff Cohen:

wanted to maybe they wanted to one up the rival then. Yeah. Which it seems like they

Jeff Cohen:

did, because this is way cooler than just a simple partnership. But I think

Paul Dawalibi:

you're right, like, it doesn't hurt anyone. Right. And there is an accessibility play

Paul Dawalibi:

here of getting more fans. You know, some people may say, does that mean it will cannibalize the

Paul Dawalibi:

real life version, right? If we replicate real life experiences in the metaverse one for one? Is

Paul Dawalibi:

there cannibalization? That's going to happen with the real life experience?

Jeff Cohen:

That's a good question. I mean, I think the answer would be no, at least at this

Jeff Cohen:

stage, I think what you're doing is expanding, you know, it's like saying, hey, basketball games are

Jeff Cohen:

on TV. Does that mean that people never want to go to basketball games again, and in some instances,

Jeff Cohen:

maybe it cuts down to man a little bit, but overall, it grows the pie in terms of people

Jeff Cohen:

viewing the sport and overall, you know, these are for profit companies, you know, overall dollars

Jeff Cohen:

that come to the to the organization are clearly higher, you know, having the broadcast, right. So

Jeff Cohen:

I think it would be very similar to that, in the sense that it grows the amount of people that can

Jeff Cohen:

engage with your families for sorry.

Paul Dawalibi:

Um, all right, let's move on. Let's talk about dapper labs in the news. And I think

Paul Dawalibi:

this is an interesting story. It's the headline here. I've never thought I would see this word

Paul Dawalibi:

actually, in a headline, especially from a pretty mainstream magazine, like Fast Company says how

Paul Dawalibi:

dapper Labs is making web three safe for normies. With help from the NBA UFC in LaLiga. The

Paul Dawalibi:

pioneering pioneering company behind crypto kitties, an NBA Top Shot won't rest until 3

Paul Dawalibi:

billion people are customers. So basically, this is talking about, I'll just summarize. It's a bit

Paul Dawalibi:

of a puff piece. But they're talking about how dapper labs who's the company behind crypto

Paul Dawalibi:

Kitties and NBA Top Shot is really focused on making web three, specifically, the buying of NF

Paul Dawalibi:

T's so much more accessible for Call it what they call normies, like, just normal everyday people

Paul Dawalibi:

who aren't hardcore crypto enthusiasts or hardcore techies. And the idea is they want to introduce

Paul Dawalibi:

the idea of collecting these scarce digital assets to millions or billions of people. Right, that's,

Paul Dawalibi:

that's part of the vision for the company. Do you buy this, Jeff? Like, do you think this is a

Paul Dawalibi:

reasonable approach to the sector?

Jeff Cohen:

I mean, 100, I think I think when you think about it, you know, whether they will

Jeff Cohen:

eventually ultimately be successful, is up in the air, you could argue they already have been, I

Jeff Cohen:

mean, one of the in the last year, one of the most successful, if not the most successful kind of NFV

Jeff Cohen:

projects, or NFV things has been was NBA Top Shot, you know, it brought probably several million

Jeff Cohen:

people into the ecosystem that were sort of first time, crypto, you know, engagers, if you will.

Jeff Cohen:

Now, a big part of that was the fact that they, you know, and they even say in the article, one of

Jeff Cohen:

the things that I thought was pretty interesting was that in the branding for NBA Top Shot, they

Jeff Cohen:

didn't really emphasize crypto, they didn't really emphasize the blockchain, it was sort of, hey,

Jeff Cohen:

this is an easy user experience, you use a credit card, you can buy these things with that you don't

Jeff Cohen:

need to create five different wallets and stuff and stuff, like the user experiences for many NFT

Jeff Cohen:

games. You know, that just creates a really friction for experience and that people generally,

Jeff Cohen:

you know, tap out of, I think they even said there were some points in the article, maybe you could

Jeff Cohen:

search for it, where they were talking about how, at one point there was only 2% of people that were

Jeff Cohen:

trying to buy items, were able to buy items. Maybe it was when they had their prior game crypto

Jeff Cohen:

kitties. Basically highlighting when you have a bad user experience, you know, you you basically

Jeff Cohen:

you lose a lot of people within maybe you could read that book. Yeah, no, the quote is, we

Paul Dawalibi:

were seeing close to a 2% conversion rate from someone clicking on I want

Paul Dawalibi:

this cat to being able to buy the cat,

Jeff Cohen:

which is that was their prior game. So they were the people behind crypto kitties, which,

Jeff Cohen:

you know, was was really the first big NFT launch back in 2017. That effect I think at one point

Jeff Cohen:

there were like 30% of the usage on on the Ethereum blockchain was crypto kitties, which is

Jeff Cohen:

just insane, but the quote here is saying how the conversion rate from people who said yeah, I want

Jeff Cohen:

to buy this cat to actually buying it was 2%, which is, you know, anyone knows e commerce

Jeff Cohen:

shockingly bad. Like, no, that's horrible. And that's because you needed to download a meta mask

Jeff Cohen:

wallet, you need to put cash in, you know, ether in that wallet, then you'd have to buy it. So what

Jeff Cohen:

they did with the flow blockchain is, you know, it's they have a noncustodial or custodial Wallet.

Jeff Cohen:

So people don't need to kind of control the crypto themselves, which is something that many crypto

Jeff Cohen:

enthusiast I know have pushed back on the flow blockchain, which is the blockchain that dapper

Jeff Cohen:

Labs has built themselves and which is what MBA Top Shot is built off of. And they're now trying

Jeff Cohen:

to get, you know, more games and companies to build upon. I know that was a problematic thing

Jeff Cohen:

for many like hardcore crypto people. But for normal, quote, unquote, normies, as this article

Jeff Cohen:

said, I think that that's a really important part of the equation. So yeah, I think I think the

Jeff Cohen:

mission is the right mission, I think it's the right way to go about it. And to some extent,

Jeff Cohen:

they've already succeeded, it will be interesting to see what sort of the follow up as a Top Shot,

Jeff Cohen:

because, you know, the volume, the GMV volumes, in terms of secondary trading market for that game

Jeff Cohen:

have gone down, call it 90% From the peak. So it's definitely you know, tailed off, it'll be

Jeff Cohen:

interesting to see what they follow it up with.

Paul Dawalibi:

It's a it's a fascinating story that 2% statistics really telling I definitely

Paul Dawalibi:

points to a, an accessibility problem, right, like an ease of use User Experience problem. I think

Paul Dawalibi:

the issue I have with these stories, this theme of story is it feels like user experience and

Paul Dawalibi:

accessibility has become a crutch for people in this industry. Like it's, it's the distraction. If

Paul Dawalibi:

we only solve the user experience in the accessibility, billions we'll be buying NF T's

Paul Dawalibi:

and, and, you know, four second clips of people doing a dunk and right like, it's only because

Paul Dawalibi:

it's complicated that we don't we only have a few million, right. Like, if it was only easier, we

Paul Dawalibi:

could get billions and billions of people. And I, my frustration is this crutch takes away from

Paul Dawalibi:

having a legitimate conversation around. What is the true size of this market, right for pure

Paul Dawalibi:

digital colop collectibles, which is what dapper labs does, right? I don't think there's any

Paul Dawalibi:

utility to any of these things. It's

Jeff Cohen:

so they're, so I was gonna say Antarctica off. I mean, they. So right now, I

Jeff Cohen:

mean, I'm a Top Shot is pure digital collectibles, but one of the things they're trying to do and a

Jeff Cohen:

lot, you know, it's kind of ties into, you know, web three gaming is they're trying to build like

Jeff Cohen:

either a fantasy sports platform or something where you could then use some of these things in

Jeff Cohen:

games. And the question I was gonna pose to you is like, How realistic is that? Can you do that

Jeff Cohen:

without just making it be? Entirely pay to win? Like, do you think that's an ecosystem? Where,

Jeff Cohen:

like, does fantasy sports work when you can own the assets? It kind of inherently,

Paul Dawalibi:

when I mean, I could just buy all the best players? No. And then, I mean, this is a

Paul Dawalibi:

problem with that whole space in its entirety. But like, I just, I want to come back to the fact that

Paul Dawalibi:

we lose sight of maybe there are other variables here, right? And because everyone has zeroed in

Paul Dawalibi:

on, you know, and everyone thinks they're very clever, and I hear it all these, you know, panels

Paul Dawalibi:

and whatever, oh, it's user experience, it's, you know, and the meta masks thing is always the one

Paul Dawalibi:

people go to right. It's like meta masks. So I kind of feel bad for the guys that meta masks,

Paul Dawalibi:

they're literally the industry punching bag for like, describing something complicated. Maybe

Paul Dawalibi:

there are other issues, like maybe 3 billion people don't want, you know, a virtual basketball

Paul Dawalibi:

card, like maybe they don't want that. And, and so are like, and maybe maybe they do I'm not I'm not

Paul Dawalibi:

taking one side or the other is just the crutch here allows everyone to avoid the conversation of

Paul Dawalibi:

you know, are there other underlying are there demand problems? Like, is there not enough benefit

Paul Dawalibi:

to the end user? Is that benefit not communicated clearly enough? Right? Like, there's all kinds of

Paul Dawalibi:

other potential business issues that stops you from getting to that 3 billion kind of owner mark,

Paul Dawalibi:

that aren't related to, like complication of the platform?

Jeff Cohen:

I agree. I mean, I, I do agree on that. And I don't think that 3 billion people will

Jeff Cohen:

want, you know, to buy digital collectibles. But I think the hope is, well, I know it from the

Jeff Cohen:

article and just in general, I think it's Hey, you know, 3 billion people are coming into this

Jeff Cohen:

ecosystem and they're, you know, some of them will want digital collectibles, someone wants digital

Jeff Cohen:

art. Some will want digital games, some will want, you know, fantasy sports on the blockchain,

Jeff Cohen:

someone betting on the blockchain, someone wants, you know, yada yada yada. I think that's the

Jeff Cohen:

that's the vision. And I do like, you know, what you are saying is correct that accessibility is it

Jeff Cohen:

is necessary, but not sufficient, like something could be super accessible and the greatest user

Jeff Cohen:

experience in the world. But if it's not interesting and not fun as an entertainment

Jeff Cohen:

product, it doesn't matter. Like at all.

Paul Dawalibi:

Let me ask maybe a stupid question, because I consider myself a dumb one on this here.

Paul Dawalibi:

Like, what? What is the total addressable size of this market? For something like NBA Top Shot,

Paul Dawalibi:

right? Would it not just be the total addressable market size of basketball trading cards? Like why,

Paul Dawalibi:

why, why? What is the strength of the argument that says, more people will care to buy this than

Paul Dawalibi:

cared to buy physical trading cards?

Jeff Cohen:

I think I'm struggling to find a really great example. I feel like like the nature

Jeff Cohen:

of digital, there are the benefits you like that things went from analog to digital, and the market

Jeff Cohen:

size was way bigger, you know, than people expect. But you could say, hey, you know, at the end of

Jeff Cohen:

the day, like strategy games are really just board games. Like, why why is mobile strategy like a $50

Jeff Cohen:

billion category when like, you know, board games are like a bit. We're never bigger than a billion.

Jeff Cohen:

So I think it's hard to always make that analogy, but I definitely see.

Paul Dawalibi:

Alright, let's, let's move on here. We've got an interesting fundraising story here

Paul Dawalibi:

and then actually let them before we get to the fundraising story. This one is sort of a recurring

Paul Dawalibi:

theme of NFT marketplaces, piggybacking on nostalgia, I guess, I don't know what the what the

Paul Dawalibi:

play is here. But this is Limewire in the news, and I guarantee like 80% of our audience probably

Paul Dawalibi:

has no clue what Limewire is.

Jeff Cohen:

That's the oldest I've ever felt.

Paul Dawalibi:

But the headline, your Limewire is back as an NFT marketplace. It's, again, I'm

Paul Dawalibi:

looking at the sub headline, it's designed to cater to folks who don't have any crypto. So like

Paul Dawalibi:

Limewire, which was, you know, at the college, early days of the internet was a name that was

Paul Dawalibi:

very well recognized, right? focused on music and you know, streaming music, mostly illegally, if I

Paul Dawalibi:

remember correctly.

Jeff Cohen:

It didn't illegal but

Paul Dawalibi:

they're coming back as an NF T marketplace. They're relaunching as a main, what

Paul Dawalibi:

they call I'm quoting here, mainstream ready digital collectibles marketplace for arts and

Paul Dawalibi:

entertainment, initially focusing on music. So the backers believe it'll be a place for artists and

Paul Dawalibi:

fans to create and sell digital trinkets. Without the technical hurdles of the current NFT

Paul Dawalibi:

marketplace. Obviously, they want to target this at musicians and NFT newbies. And they're, they're

Paul Dawalibi:

using this, I guess, in the style chick brand. You know, we saw we talked about the GameStop. One.

Paul Dawalibi:

How do you rank this against that? If you do, or what are the thoughts on 100 More marketplaces

Paul Dawalibi:

banking on the stellar?

Jeff Cohen:

So my first thought is that I don't really understand why they're, they're going after

Jeff Cohen:

kind of non crypto enthusiast. Because if I were to think, you know, just about Limewire, I mean,

Jeff Cohen:

it was a peer to peer file sharing technology, it was a little bit in the gray, you know, like the

Jeff Cohen:

dark web gray area, to some extent, like, I have to imagine that there's a pretty big overlap

Jeff Cohen:

between people who use Limewire very actively and people are into crypto just feels like it's that

Jeff Cohen:

kind of, you know, computer cell, you know, Dark Web type people are at least early adopters of

Jeff Cohen:

crypto, that's obviously not the case more. So that that part was a little bit confusing to me.

Jeff Cohen:

But um, I had thought I was gonna hate this same way, hated GameStop. One. And I still do think I

Jeff Cohen:

hate this one. But I think it's interesting that there, folks, I think we had a long discussion

Jeff Cohen:

about kind of my view on virtualization and how, you know, all these NFT markets, were eventually

Jeff Cohen:

going to get a splinter into kind of verticalized deep marketplaces. So I kind of liked the fact

Jeff Cohen:

that they're focusing on music. And then if you play it through ly Meyer has a brand and music so

Jeff Cohen:

you know, to some extent, could they be the the NFT marketplace for music? I think I could buy

Jeff Cohen:

that. If we have the three we had blockbuster we had GameStop. And this one, I think I was fairly

Jeff Cohen:

bullish on GameStop. Relatively blockbuster. No, that was just a pure nostalgia play. I don't

Jeff Cohen:

really get it. This one. I think I could see, you know, the music argument makes a little sense.

Jeff Cohen:

Where it breaks down for me though, is why would someone buy an NFT of music like, we kind of move

Jeff Cohen:

past by music, right? Like everything streamed now, I'm not sure who wants to buy digital music,

Jeff Cohen:

I guess it's sort of like we that business model is correct. 20 years ago, if 20 years ago, you

Jeff Cohen:

were selling FTS of digital music. Like maybe I could see that being a better You know,

Jeff Cohen:

proposition for consumers, I just don't know if there's a market for buying digital music at this

Jeff Cohen:

point.

Paul Dawalibi:

It could be music related art, that but this, like, does this make you more convinced

Paul Dawalibi:

of this, like vertical verticalization of these NFT marketplaces? Like, are you more and more

Paul Dawalibi:

convinced that the end result the, the, you know, if we fast forward five years, there's, you know,

Paul Dawalibi:

two or three dozen big NFT marketplaces that all are massively sort of focused on one vertical,

Paul Dawalibi:

whether it's music or game or whatever, like,

Jeff Cohen:

I'm very I'm I'm highly convicted on that the only reason why I have a little bit of a

Jeff Cohen:

pause is that we're sort of going through the whole evolution in like, fast forward, we're

Jeff Cohen:

normally it's like the market starts small, you have one massive aggregator, like the open sea

Jeff Cohen:

becomes this dominant behemoth, which it sort of has, it has a massive amount of market share and

Jeff Cohen:

NFPs. But we're so early in the game, like, it feels like it needs to like become more of a

Jeff Cohen:

behemoth before it splinters off and gets nice. But I do think that that's where this added I

Jeff Cohen:

mean, look at what happened with eBay, Craigslist, like there's, you know, whole VC funds have been

Jeff Cohen:

created around like the the splintering of Craigslist, and all the different platforms that

Jeff Cohen:

have been spawned off the back of that. So I do think that's where this is headed. And it's

Jeff Cohen:

probably not a controversial take. That's why a lot of these things are getting funded. I'm sure

Jeff Cohen:

there's plenty of VCs that the same thesis, but yeah, yeah, you

Paul Dawalibi:

know, there's, it feels like there's gonna be some consolidation, right? I

Paul Dawalibi:

don't know if there's enough space for every single one of these very, you know, highly niche

Paul Dawalibi:

markets. And I, again, I worry about the intersection of the people who know the Limewire

Paul Dawalibi:

brand, and the ones who care to buy music related NF T's. I'm a little concerned that those two in

Paul Dawalibi:

the Venn diagram those two circles, while they do intersect, the intersection may be small. Because

Paul Dawalibi:

even I like, obviously, I remember the name Limewire. And I was around when it was popular the

Paul Dawalibi:

Napster days, because all those kinds of, you know, programs. But it doesn't like say much to

Paul Dawalibi:

me, I don't get warm and fuzzy feelings from the brand. That makes me absolutely want to go there.

Paul Dawalibi:

So it's an interesting play. It'll be interesting to see how it pans out. But let's, let's go to our

Paul Dawalibi:

last story here. Jeff, and this is a this is a big race, really big race and a huge valuation. The

Paul Dawalibi:

headline from coin desk is NFT platform immutable, raises 200 million at $2.5 billion valuation. It

Paul Dawalibi:

was the round was led by the Singapore sovereign wealth fund, Temasek and most of the fundings

Paul Dawalibi:

going to be used for global expansion. Now, there were other participants in the round, I'll just

Paul Dawalibi:

name some of them mirre asset power fi capital declaration partners, Tencent Holdings, a name we

Paul Dawalibi:

know well, from the gaming space, obviously, and immutable raised money, just back in September. So

Paul Dawalibi:

that would have been what, like six months ago at a $410 million valuation, so more than 5x 6x,

Paul Dawalibi:

right 6x increase in valuation in six months. And that was a $60 million raise. So you know,

Paul Dawalibi:

hundreds of millions of dollar raised massive increase in the valuation. They develop two

Paul Dawalibi:

popular NFT games. According to this article, God's unchained and guild of Guardians, I don't

Paul Dawalibi:

play either. But they also created immutable x, which is a layer to NFT infrastructure platform

Paul Dawalibi:

for businesses to build games, marketplaces and applications. Here's my question for you. This is

Paul Dawalibi:

primarily sort of a blockchain based gaming play their their platform and infrastructure play. I'm

Paul Dawalibi:

sure the VCs and the investors in this we're very interested in that. But all we have to go on

Paul Dawalibi:

today, I think is are these two games that they have out? Were like, I feel like triple A game

Paul Dawalibi:

studios, building games for PCs that are massively multiplayer, triple A graphics, right, like, would

Paul Dawalibi:

struggle to spend and I'm exaggerating, but would struggle to spend $200 million right on a game.

Paul Dawalibi:

Where does immutable put all this capital? Right? Because these are relatively simple games in the

Paul Dawalibi:

grand scheme of game development. Where does all this go in your mind, Jeff, that's what worries me

Paul Dawalibi:

here.

Jeff Cohen:

It's yeah, it's it's it's a little bit of a conundrum. There's so much capital flowing

Jeff Cohen:

into the space. I mean, I imagine And most of that goes to building infrastructure building out

Jeff Cohen:

their, their, you know, Blockchain solution, or literally their blockchain. I do know, they also

Jeff Cohen:

were the ones actually that I think Gamestop partnered with, you know, to do sort of what

Jeff Cohen:

they're doing. So there, there's a little bit deeper than just, you know, some of these games.

Jeff Cohen:

Also, I think that God's unchained even though I haven't played it, I do know, it's, I think it's

Jeff Cohen:

one of the more popular kind of of these NFT games. So maybe they do have have some sort of

Jeff Cohen:

secret sauce here in terms of they're going to be the winning platform to build games on. I know,

Jeff Cohen:

there's, you know, we every week, we seem to be talking about a different blockchain, whether

Jeff Cohen:

it's, you know, flow from dapper labs Elana, or polygon, which obviously hired Ryan Wyatt, former

Jeff Cohen:

head of YouTube Gaming and kind of gaming luminary. So there's a lot of people going after

Jeff Cohen:

this same prize, I would love to, you know, to understand a little better maybe this is a

Jeff Cohen:

homework assignment for me, but just what the value proposition is for developers on each

Jeff Cohen:

different blockchain? Because they can't all win, right? We're not eventually I think, you know,

Jeff Cohen:

there will be a one or two maybe standards. And if you think of these and maybe this isn't even the

Jeff Cohen:

right analogy, that's like almost gaming engines, or game organ platforms. There's not that many out

Jeff Cohen:

there. You know, if we think about traditional gaming, right, yeah. Unity Yep. Unreal Engine

Jeff Cohen:

side, maybe there's two or three others that sort of have a small bit of market share. And then on

Jeff Cohen:

the the kind of platform side, you have, obviously the consoles if PC, and then you have kind of

Jeff Cohen:

mobile, like does blockchain be just become like that fifth or fourth platform? And then if it is

Jeff Cohen:

like, Is there room for 10? of them? Is there room for three of them? Is there room for two of them?

Jeff Cohen:

Is there room for one of them? I don't have a great view or thesis on that Sunday, I had to do

Jeff Cohen:

more thinking or work on I'm curious if you have been.

Paul Dawalibi:

I feel like there are more platforms than there are actual games, or

Paul Dawalibi:

applications for these timers. That are literally if you look at the the ecosystem, right now you

Paul Dawalibi:

have more choice. If you're a developer of blockchain based games, there are more you have

Paul Dawalibi:

more choice in terms of platform than competition in terms of games. And I feel like at some point,

Paul Dawalibi:

we reached saturation. And at some point, we need to see $200 million. And we've seen raises right

Paul Dawalibi:

in game developers raising huge amounts of money to build blockchain based games or play to earn

Paul Dawalibi:

games. But where are the games? Right? Like, lots of interesting platforms? Where are the great

Paul Dawalibi:

games, seems to be that that piece of the equation still is very much missing, in my mind. And so I'm

Paul Dawalibi:

a little worried, right, that everyone's building these fabulous palaces, with no one to live in

Paul Dawalibi:

them. And, and they're very expensive palaces, right, those two and a half billion dollar

Paul Dawalibi:

valuation, I don't know how you justify a six times increase, other than maybe competitive

Paul Dawalibi:

pressure to get into the deal. If you're an investor, like, where's the justification that

Paul Dawalibi:

this company has increased six times? Over six months, right? What have they done in six months

Paul Dawalibi:

to justify that massive increase? When again, they're not the only game in town, there are other

Paul Dawalibi:

platforms that do exactly this. And it's not like there's 10,000 developers all wanting to make

Paul Dawalibi:

games. And there's so much demand for these platforms. I would rather see the games drive sort

Paul Dawalibi:

of some of the the news around these platforms, right? I want to see a big successful game, say,

Paul Dawalibi:

we used immutable, and you should too, right? Like, in the same way with Roblox, you get these

Paul Dawalibi:

stories of you know, this 16 year old developers making like 300 grand a month. I just don't see

Paul Dawalibi:

that as much here. And I assume that's because it's not happening. But that that's, you know,

Paul Dawalibi:

that's where I have concerns. I think it's also just it means, you know, Blockchain based games

Paul Dawalibi:

played around games are here to stay when you have this much money invested at these kinds of high

Paul Dawalibi:

valuations. You know, something like immutable is not going anywhere tomorrow. There's real

Paul Dawalibi:

conviction that the ecosystem is going to fill out and people will develop for this platform.

Jeff Cohen:

So yeah, your point is a good one. I think it does highlight to me probably just how

Jeff Cohen:

early we are and you know, you and I, we've been talking about this for a number of months but it's

Jeff Cohen:

still you know, to use the the tried and true you know, famous baseball example I don't even think

Jeff Cohen:

we're in the first inning here. Like we haven't even gotten to the starting line up the race. And

Jeff Cohen:

and maybe that's what it is. But the question I guess pose back to you is when does it really

Jeff Cohen:

become concerning? I think, you know, this all let's call it the last year really started getting

Jeff Cohen:

piped up, then you had the VCs, notice they start funding these things, then these things start, you

Jeff Cohen:

know, I think a lot of this money will probably go to developers, right? So all these blockchains

Jeff Cohen:

have, effectively VC arms. They're funding developers is a great time to be a blockchain

Jeff Cohen:

gaming developer, you name your price. I mean, it's just insane. But then these guys have to go

Jeff Cohen:

make a game, which in triple A world that could take two or three years, this is obviously not

Jeff Cohen:

gonna be that. So maybe it's called a year. But when do we, my point is, there's a lot of lead

Jeff Cohen:

time. So when do we really start getting concerned where it's like, hey, there's 100 of these games

Jeff Cohen:

actually coming out? Not white papers, not discord servers, like real games that people are playing.

Jeff Cohen:

And it's just like, this stuff isn't very good. Like when where are we on that curve?

Paul Dawalibi:

Well, so your I like your baseball analogy. So let me run with it. If we're in the

Paul Dawalibi:

first inning, what has happened is we're in the first inning. And everyone has built massive

Paul Dawalibi:

stadiums, right? Like everyone has just built these most palatial massive stadiums. But there's

Paul Dawalibi:

no one in the seats yet. Right? And so by the second 13, and if there's no one in the seats, you

Paul Dawalibi:

might go okay, you know, no big deal was slow burn, right? Like, if we're halfway through the

Paul Dawalibi:

game, and there's no one in the seats. I think this is when you start to worry. What is that in

Paul Dawalibi:

terms of years? I think you have to look at sort of a game lifecycle, right. So what's the average

Paul Dawalibi:

time to develop a triple A game? I don't know, three years, maybe four years, something like that

Paul Dawalibi:

these days, right? It's getting longer and longer. Let's say it's three years, even three years, we

Paul Dawalibi:

don't have a fortnight type breakout, Blockchain based game or play to earn game if we don't have

Paul Dawalibi:

that level of hit. I think in three, four years, then I think alarm bells need to start ringing

Jeff Cohen:

hotter, but that's a lot more runway than I thought you're gonna give it like, month

Jeff Cohen:

like I was thinking, like a quarter to like, three, four years. Yeah. I mean, if we don't have

Jeff Cohen:

a hit, and then yeah, like, go home like it's over? Yeah, I was thinking about the summer.

Paul Dawalibi:

I mean, I can almost guarantee that will not happen. Like that, to me those short term

Paul Dawalibi:

like, there's just there's nothing on the horizon that makes me believe they have figured out how to

Paul Dawalibi:

make fun games, given the constraints of blockchain based or played around games like that.

Paul Dawalibi:

I am not convinced at all that it's even possible yet. And so in the short term, I just don't think

Paul Dawalibi:

anyone's gonna figure it out. Well, the long term, I might argue that people are going to figure it

Paul Dawalibi:

out. I just, you know, when people say like, if you said by the summer, I would take that bet all

Paul Dawalibi:

day long, like no chance by the summer. That that's our time, Jeff. Wise by as always, just a

Paul Dawalibi:

quick reminder, to our listeners, make sure you subscribe, leave a five star rating and review if

Paul Dawalibi:

you love the podcast, tell your friends, send it to your friends even better. Share the link with

Paul Dawalibi:

them so they can enjoy the podcast as well. We really appreciate you guys tuning in every week.

Paul Dawalibi:

Jeff, thank you as always, and we will see you all next week.

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About the Podcast

META Business
From the metaverse to the boardroom...
Meta Business tackles the most important Metaverse industry news. Business experts dissect and discuss all of the hottest topics and happenings, from a unique C-suite perspective.

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Paul Dawalibi