Episode 26

full
Published on:

23rd May 2022

26. Military Metaverse, a16z Games Fund One, Blockchain Gaming Report

In this episode, we discuss the United States military building its own metaverse, Andreessen Horowitz creating a $600 million fund to invest in gaming, Kevin Lin's Metatheory raising $24 million, DappRadar releasing another Blockchain Gaming report, and so much more!

Episode 26 Keywords: United States, military, metaverse, Andreessen Horowitz, a16z, $600 million fund, investing, gaming, Kevin Lin, Metatheory, $24 million fundraise, DappRadar, Blockchain Gaming report

Transcript
Unknown:

Welcome to the metaphysics podcast. The

Unknown:

Metaverse and web three are bringing about the biggest

Unknown:

revolution since the internet itself. With your hosts Paul the

Unknown:

prophet Dawalibi And Jeff the juice Cohen. We will be bringing

Unknown:

you the latest Metaverse, business news and insight into

Unknown:

what it all means. The meta business podcast starts now.

Paul Dawalibi:

From the boardroom to the metaverse. This

Paul Dawalibi:

is the meta business podcast. I am Paul the profit that will

Paul Dawalibi:

lead me I'm joined today by my friend and co host, Jeff, the

Paul Dawalibi:

juice Cohen. For those of you who are new here, welcome to the

Paul Dawalibi:

official podcast of the metaverse. What we do is we

Paul Dawalibi:

cover the most pressing, Metaverse, topics and news of

Paul Dawalibi:

the week, we look at all of it through a business and C suite

Paul Dawalibi:

lens, we dissect, we analyze the business implications of

Paul Dawalibi:

everything happening in this amazing industry. For our

Paul Dawalibi:

regular listeners. Thank you guys for tuning in every week.

Paul Dawalibi:

Thank you for all the love the five star ratings and reviews.

Paul Dawalibi:

If you haven't yet, go leave a review on the podcast. But more

Paul Dawalibi:

importantly, Go share it, send it to a colleague send it to a

Paul Dawalibi:

friend. We really appreciate it. This is how we grow or maybe

Paul Dawalibi:

post it on your LinkedIn or on your socials, an episode that

Paul Dawalibi:

you particularly liked. That always helps. And we appreciate

Paul Dawalibi:

it. Jeff, how you doing this week?

Jeff Cohen:

Dude? Good. Doing good. Good. As always, it's nice

Jeff Cohen:

when the lights still light out when we record which as we get

Jeff Cohen:

later into the year it gets, you know, it's nicer out. So that's

Jeff Cohen:

positive. How about you?

Paul Dawalibi:

It's been crazy. I think you and I have

Paul Dawalibi:

commiserated. But I feel like this is maybe the busiest time

Paul Dawalibi:

of year and like the conferences are back. And so there's a lot

Paul Dawalibi:

of people going to conferences and a lot of like networking

Paul Dawalibi:

that's happening. And I just feel like it's extra busy, like

Paul Dawalibi:

the business world is sort of getting back to normal is what

Paul Dawalibi:

it feels like. And obviously that has an impact, right? Like,

Paul Dawalibi:

it's just means more opportunity to see that. Plus, this industry

Paul Dawalibi:

is crazy. Because every week the numbers get bigger, the stories

Paul Dawalibi:

get bigger. So let's jump in. Jeff, because we've got we've

Paul Dawalibi:

got some really good ones here this weekend. As always, let's

Paul Dawalibi:

start with something a little while and what I don't know if

Paul Dawalibi:

I'd call this light, but it's you know, maybe less businesses

Paul Dawalibi:

just open. Maybe that's it. But the headline here I really liked

Paul Dawalibi:

this headline. It's the US military building its own

Paul Dawalibi:

metaverse. Defense tech companies have latched on to the

Paul Dawalibi:

metaverse hype, but what they're building will be a far cry from

Paul Dawalibi:

metas virtual world. Now, it goes on to tell the story about

Paul Dawalibi:

you know, fighter pilots basically strapping on to AR

Paul Dawalibi:

headsets and doing missions like refueling missions and things

Paul Dawalibi:

like that, on like this mix of augmented reality AI, video game

Paul Dawalibi:

graphics, or fighter pilots to practice dogfighting against

Paul Dawalibi:

virtual opponents, for example. So they're using Metaverse

Paul Dawalibi:

related ideas to augment military systems, right, whether

Paul Dawalibi:

that's AR or VR, or AI, or some mix of all of the above, which

Paul Dawalibi:

is sort of what the the article dives into here. I mean, we

Paul Dawalibi:

don't necessarily need to touch on the specifics here. But I'm

Paul Dawalibi:

curious. What do you make of a military Metaverse, right? A

Paul Dawalibi:

Metaverse created purely for either like WarGames practice

Paul Dawalibi:

call it or to augment the capabilities of an actual

Paul Dawalibi:

military.

Jeff Cohen:

Yeah, well, technologically, I mean, the

Jeff Cohen:

military has a long kind of history of being pretty early

Jeff Cohen:

and building stuff. I mean, they, you know, the early

Jeff Cohen:

internet, I believe, was developed by the military. You

Jeff Cohen:

know, there's many other things that ended up being consumer

Jeff Cohen:

technology that actually started in the military. So maybe

Jeff Cohen:

there's some element of that here, although, I feel like

Jeff Cohen:

they've basically taken something that's already been

Jeff Cohen:

going on for a while, which is kind of like using gaming as a

Jeff Cohen:

as almost like a practice for, for military activities, and

Jeff Cohen:

just really transformed it with the word metaverse. Like, you

Jeff Cohen:

know, everything that we described there, like not

Jeff Cohen:

practicing dogfighting, stuff like that is all stuff that is

Jeff Cohen:

really already happening. And to me, it doesn't really rise to

Jeff Cohen:

the level of being called a Metaverse because I think one of

Jeff Cohen:

the big areas for something to be a Metaverse at least in my

Jeff Cohen:

mind, is the social, which I don't this doesn't really seem

Jeff Cohen:

to have that. And also having an economy where it's like, people

Jeff Cohen:

will have a sense of self and a sense of actual you know,

Jeff Cohen:

there's actual commerce going on with goods and services and

Jeff Cohen:

money. Trent transfer hands, like in this example, I don't

Jeff Cohen:

really see any of those things happening. So to me at least,

Jeff Cohen:

this is just then putting a different coat of paint on

Jeff Cohen:

something that maybe is already happening. But yeah, I'm curious

Jeff Cohen:

how you how you interpreted? Yeah.

Paul Dawalibi:

The military doing anything in this space, I

Paul Dawalibi:

think is interesting. Your insight. In the beginning there

Paul Dawalibi:

was spot on it was almost the take I was gonna make, which

Paul Dawalibi:

was, you know, DARPA and the military created web 1.0 Why

Paul Dawalibi:

should we not assume that they may be the creators or the you

Paul Dawalibi:

know, the one have the biggest drivers of web three. So that

Paul Dawalibi:

this to me makes sense. Obviously, your point also,

Paul Dawalibi:

we've seen a lot of existing technologies just being

Paul Dawalibi:

leveraged in military, sort of in military circles or in

Paul Dawalibi:

military scenarios. I've I always try and take it to the

Paul Dawalibi:

extreme here. Right. And I think the conversations most fun at

Paul Dawalibi:

the extreme. And one argument I've made, I don't think I've

Paul Dawalibi:

made it on this podcast. I definitely made it on the

Paul Dawalibi:

business of esports podcast is that I believe at some point,

Paul Dawalibi:

soldiers, especially call it Air Force, but I think all soldiers

Paul Dawalibi:

eventually will be operating in some kind of metaverse. In other

Paul Dawalibi:

words, their existence will be in a virtual world, they will

Paul Dawalibi:

pilot craft in a virtual world, they will run around in a

Paul Dawalibi:

virtual world, there will be a real life sort of robotic

Paul Dawalibi:

unmanned version of whatever they're doing in the real world,

Paul Dawalibi:

but in their minds in the soldiers. Perception, they're

Paul Dawalibi:

operating in a metaverse. Right. And that, and that soldiers will

Paul Dawalibi:

be could end up being part time right where I could come home.

Paul Dawalibi:

And instead of driving for Uber, I log into the military

Paul Dawalibi:

metaverse. Right? I fly a couple of missions, which just so

Paul Dawalibi:

happened to be the there has to just so happens to be a real

Paul Dawalibi:

world drone equivalent, right? Some kind of UAV equivalent that

Paul Dawalibi:

I'm piloting. But for me, I'm coming in I'm playing a game.

Paul Dawalibi:

I'm operating in a Metaverse and and the real the messiness of

Paul Dawalibi:

the real world is sort of obfuscated, for me. I think

Jeff Cohen:

this is military, military to earn military term.

Paul Dawalibi:

It's true. It's a great, it's actually great. A

Paul Dawalibi:

great if we're fighter earn or something like that, right. But

Paul Dawalibi:

yeah, but if we take this even to a larger extreme, eventually,

Paul Dawalibi:

maybe there's a universe there's some outcome here some future

Paul Dawalibi:

where the real world piece of it doesn't even exist. Were wars

Paul Dawalibi:

are fought entirely meta versus, with some agreed upon rules. And

Paul Dawalibi:

there's no loss of actual life, or or equipment at all. Right,

Paul Dawalibi:

that it's all it's all happening in virtual worlds, where there's

Paul Dawalibi:

some agreement in terms of, you know, here are the here are the

Paul Dawalibi:

ground rules.

Jeff Cohen:

Yeah, I mean, I think if we take things to the

Jeff Cohen:

logical extreme, where people are spending a lot of their time

Jeff Cohen:

or much of their time in these virtual worlds, and come to, you

Jeff Cohen:

know, value their self in that world and their possessions in

Jeff Cohen:

that world as much as they do their their physical self. Yeah,

Jeff Cohen:

I think it does sort of stand to reason that maybe there will be

Jeff Cohen:

factions, fights wars, then you come to more of like an

Jeff Cohen:

existential question. Like, what happens if you die in the

Jeff Cohen:

metaverse like, do you? Do you? Are you dead from that Metaverse

Jeff Cohen:

forever? Like, can you just relog in like, what what exactly

Jeff Cohen:

happened there? You know, that's an interesting one question.

Paul Dawalibi:

So yeah, I'm sure stuff we'll touch on, over and

Paul Dawalibi:

over, as, you know, people start thinking through these things

Paul Dawalibi:

and building these things. But I this is one to watch. Right? The

Paul Dawalibi:

the military always at the cutting edge, always one of the

Paul Dawalibi:

biggest drivers of new tech. So anytime they're doing something

Paul Dawalibi:

I think people need to sort of take notice. Let's talk about

Paul Dawalibi:

another big driver of tech and innovation. And that's

Paul Dawalibi:

Andreessen Horowitz, the fabled VC firm. I believe that either

Paul Dawalibi:

the biggest or second biggest in the world at this point, like

Paul Dawalibi:

early stage VC, maybe only second to Sequoia but Andreessen

Paul Dawalibi:

Horowitz launching a $600 million gaming fund, this

Paul Dawalibi:

announcement being made today, in fact that they were recording

Paul Dawalibi:

and what they're saying it's the they're calling the fun games

Paul Dawalibi:

fund one very creative name. It will focus on a mix of game

Paul Dawalibi:

studios, gaming infrastructure companies, and consumer gaming

Paul Dawalibi:

software providers similar to discord and Twitch that support

Paul Dawalibi:

gaming ecosystems and communities. Now, the fund has

Paul Dawalibi:

like a ton of investments in gaming stuff already. They've

Paul Dawalibi:

invested in x infinity le X infinities maker sky, Mavis,

Paul Dawalibi:

they've invested in Roblox they've invested in Oculus,

Paul Dawalibi:

they've invested in Zynga. Right, they have a huge number

Paul Dawalibi:

of existing investments in in gaming companies, but now they

Paul Dawalibi:

have a dedicated fund for this. And And what's interesting about

Paul Dawalibi:

this, I think, at least, Jeff, but I want your thoughts. I'm

Paul Dawalibi:

sure it was somewhere in the announcement. I had didn't read

Paul Dawalibi:

the official announcement from Andreessen Horowitz, but it's

Paul Dawalibi:

most definitely not blockchain gaming focused, right? It's not.

Paul Dawalibi:

They didn't say this is a blockchain gaming fund. And

Paul Dawalibi:

we're only going to do blockchain games. This is very

Paul Dawalibi:

much games in general, which I would argue is sort of out of

Paul Dawalibi:

fashion these days, right? Like, we do the business of esports

Paul Dawalibi:

podcast and we do this podcast. And there's a lot more news

Paul Dawalibi:

about blockchain gaming blockchain game developers

Paul Dawalibi:

raising money than there are traditional studios raising

Paul Dawalibi:

money. But what do you make of the focus? And what do you make

Paul Dawalibi:

of Andreessen sort of carving this out as its own fun?

Jeff Cohen:

It's interesting. Like, I don't know, when it's

Jeff Cohen:

important, it's important to note, and I think we did talk

Jeff Cohen:

about this last week that, you know, it is a watershed moment

Jeff Cohen:

for the industry that we're seeing venerable funds like

Jeff Cohen:

Andreessen Horowitz creating this large of gaming dedicated

Jeff Cohen:

funds. So we shouldn't really gloss over that, because that is

Jeff Cohen:

a massive milestone. I mean, you and I can still remember the

Jeff Cohen:

time, the times back when, you know, VCs wouldn't even touch

Jeff Cohen:

gaming, because they just viewed it as too hit driven. And it was

Jeff Cohen:

really viewed as a content industry and something that

Jeff Cohen:

didn't have much value or much long term value for VCs. So I

Jeff Cohen:

think that is pretty interesting to note. On the blockchain

Jeff Cohen:

piece, I have two theories. I mean, one, I was reading another

Jeff Cohen:

article where they were sort of asked about it, and they did

Jeff Cohen:

say, like, don't go look at it. So maybe, you know, it isn't

Jeff Cohen:

that they didn't break it out and note it. So maybe there's

Jeff Cohen:

one element where they're just lumping that in because the

Jeff Cohen:

article that I'm looking at here, which I think was from

Jeff Cohen:

games, B it says they're investing in kind of the

Jeff Cohen:

following themes, and they list game studios, games, and

Jeff Cohen:

consumer and then infrastructure. So it's possible

Jeff Cohen:

that they're just kind of lumping web three in with Game

Jeff Cohen:

Studios, then obviously, if it's an infrastructure thing, the

Jeff Cohen:

infrastructure, which I actually almost kind of like because it's

Jeff Cohen:

like, at the end of the day, I don't think we should

Jeff Cohen:

necessarily be looking at web three is this strange other

Jeff Cohen:

bucket, the best successful web three gaming studios are, at the

Jeff Cohen:

end of the day going to be game studios. So you know, I think if

Jeff Cohen:

you're looking at them as something different, you're

Jeff Cohen:

probably already looking through the wrong lens. However, I will

Jeff Cohen:

put on my tinfoil hat and say it. So that's one explanation.

Jeff Cohen:

That's probably the one that I think is the right one. But if I

Jeff Cohen:

put my tinfoil hat on, maybe it's possible that they didn't

Jeff Cohen:

mention it, because they're going to raise another fund

Jeff Cohen:

specific for blockchain. That's just my little tinfoil hat

Jeff Cohen:

theory. You know, I don't know what what you make that.

Paul Dawalibi:

But let me just throw this other story up,

Paul Dawalibi:

because in the same breath, they announced there was an

Paul Dawalibi:

announcement for Kevin lander, who was one of the cofounders of

Paul Dawalibi:

Twitch, his blockchain game studio meta theory, raising 24

Paul Dawalibi:

million and the rounds being led by Andreessen Horowitz right. So

Paul Dawalibi:

I think we can agree that Andreessen Horowitz as a fund,

Paul Dawalibi:

whether it's this games fund one or Andreessen as a whole, it's

Paul Dawalibi:

not like they're getting out of blockchain gaming as some as

Paul Dawalibi:

some kind of focus area. Clearly, they're still investing

Paul Dawalibi:

a ton of money in that area. What is what what I am curious

Paul Dawalibi:

about going forward? So definitely curious about your

Paul Dawalibi:

your tinfoil hat theory there, because that would be

Paul Dawalibi:

interesting, right, a second $600 million fund just for

Paul Dawalibi:

blockchain games? would probably be a mistake, I think, but

Jeff Cohen:

we've seen it. We've seen it with multiple other

Jeff Cohen:

funds. But I agree with your point of view mistake, but like

Jeff Cohen:

we have seen other funds do that. I think what I

Paul Dawalibi:

love from this is I'm curious how many existing

Paul Dawalibi:

funds that have said we're blockchain gaming funds, will

Paul Dawalibi:

all of a sudden pay bid back or to being just gaming funds,

Paul Dawalibi:

right. Like at some point, I think this separation between

Paul Dawalibi:

gaming and blockchain gaming has to your point has to go away

Paul Dawalibi:

because the most successful blockchain game studios will be

Paul Dawalibi:

game studios. So this differentiation has been always

Paul Dawalibi:

a little bit artificial. In some ways, it may even have held back

Paul Dawalibi:

blockchain games, because you're not thinking about the gaming

Paul Dawalibi:

first. And, and I wonder how many will pivot back and sort of

Paul Dawalibi:

copy Andreessen should Andreessen not come out with a

Paul Dawalibi:

separate blockchain gaming fund?

Jeff Cohen:

And I think the reason why there was so much

Jeff Cohen:

emphasis on the separation that you know, at first is because it

Jeff Cohen:

helped these VCs a raise more money from, from their LPs. And

Jeff Cohen:

then also the game companies were incentivized to do it,

Jeff Cohen:

because they were getting higher valuations. So I'm sure it's

Jeff Cohen:

probably similar to, you know, when Free to Play mobile first

Jeff Cohen:

became popular, I'm sure if you were a mobile game company, and

Jeff Cohen:

you were going to raise your like for a free to play mobile

Jeff Cohen:

gaming developer now, like, you would never say you're just a

Jeff Cohen:

mobile game company. Right? You wouldn't you wouldn't

Jeff Cohen:

necessarily say what kind of what type of in your building.

Paul Dawalibi:

I also wonder if I mean, I'm sure that folks at

Paul Dawalibi:

Andreessen Horowitz, listen and consume our podcasts

Paul Dawalibi:

voraciously. But I think I said at one point that I believe

Paul Dawalibi:

there is a contrarian strategy here, because everyone is is

Paul Dawalibi:

like the the blockchain gaming space is so red hot. The deals

Paul Dawalibi:

are so ready to hot the valuations are so high, they're

Paul Dawalibi:

so competitive to get into. There's some like VC contrarian

Paul Dawalibi:

strategy that says, we're only going to invest in traditional

Paul Dawalibi:

games. And so maybe this is Andreessen just being really

Paul Dawalibi:

clever a year and going back to that, I don't know I have a

Paul Dawalibi:

funny feeling. This is just boarding more than anything and

Paul Dawalibi:

none of this was purposeful in any way. But you know, for them,

Paul Dawalibi:

they can cast a wide net because there are massive fun, right and

Paul Dawalibi:

not like they have no issues raising money. They don't need

Paul Dawalibi:

like some clever new strategy that I mean, they just hit up

Paul Dawalibi:

their LPs and the LPS will write whatever check they want. So I

Paul Dawalibi:

think we may be giving them a little bit too much credit here.

Paul Dawalibi:

It may just be,

Jeff Cohen:

this is what we do here. We dissect, we analyze.

Paul Dawalibi:

Let's dissect this next one. Jeff, this one,

Paul Dawalibi:

you flag this I thought it was super interesting blockchain

Paul Dawalibi:

games report from DAP radar. And I mean, we could probably spend

Paul Dawalibi:

an entire hour just on what's in here, but let me let me just

Paul Dawalibi:

read some of the take key takeaways that they had listed

Paul Dawalibi:

in the article. And then I know there's specific things you

Paul Dawalibi:

wanted to point out which which we'll talk about but some of the

Paul Dawalibi:

key takeaways it said. Despite the negative trend in the

Paul Dawalibi:

markets, Blockchain games continued to perform well, all

Paul Dawalibi:

time high in daily activity with 1.2 3 million

Jeff Cohen:

active wallets unique active, active wallets,

Jeff Cohen:

yes,

Paul Dawalibi:

interacting with Blockchain games in April. So

Paul Dawalibi:

that's that's monthly. splinterlands remains the

Paul Dawalibi:

leading blockchain game with an average of 350,000 daily, Unique

Paul Dawalibi:

Active wallets in April, and other sides, which is from UVA

Paul Dawalibi:

labs became the most traded virtual world project to date,

Paul Dawalibi:

with 723 million in sales. The UVA labs Metaverse projects

Paul Dawalibi:

surpassed decentraland and the sandbox all time trading volume

Paul Dawalibi:

in just two weeks. Investments keep pouring into the space four

Paul Dawalibi:

and a half billion raised by blockchain games and

Paul Dawalibi:

infrastructure projects in 2022, surpassing the 4.1 billion

Paul Dawalibi:

raised last year. So already by April, more money has been

Paul Dawalibi:

raised than the entirety of blast here, which is insane that

Paul Dawalibi:

the last point they make is the popularity of move to earn daps

Paul Dawalibi:

is on the rise. The number of GST, which is steppings utility

Paul Dawalibi:

token unique holders grew 350% from the end of March. We all

Paul Dawalibi:

know steppin had sort of a great launch and a lot of hype around

Paul Dawalibi:

it. But I don't know if you want to dig into any of these. Jeff,

Paul Dawalibi:

if there's other

Jeff Cohen:

things. There's, you know, one or two other things, I

Jeff Cohen:

guess, well, maybe one of the things I wanted to point out at

Jeff Cohen:

the end, but all of those are super interesting. I mean, the

Jeff Cohen:

first one on or if you want to scroll back up to them, I mean,

Jeff Cohen:

the I'm just I'm always interested when I hear you know,

Jeff Cohen:

kind of the daily active numbers in terms of Unique Active

Jeff Cohen:

wallets, because it's still so small and and it feels like

Jeff Cohen:

every time we say this, and I I apologize if we repeat ourselves

Jeff Cohen:

sometimes, but it's like 1.2 3 million is the entire total

Jeff Cohen:

world addressable market for blockchain gamers currently,

Jeff Cohen:

that is so so small compared to, you know, what's the number we

Jeff Cohen:

always throw out there 3 billion gamers, you know, severe or like

Paul Dawalibi:

100 million people playing pub, G mobile or

Paul Dawalibi:

Yeah, like,

Jeff Cohen:

I mean, we are orders of magnitude, you know,

Jeff Cohen:

kind of away from from that. And then the next one, your

Jeff Cohen:

splinterlands, the number one blockchain game currently

Jeff Cohen:

350,000 daily players like that. That is like not even a blip on

Jeff Cohen:

the radar. You know,

Paul Dawalibi:

what's funny about that one, when you

Paul Dawalibi:

remember when new world came out on the business of esports. And

Paul Dawalibi:

when it was on the decline, it was like hitting about 303, like

Paul Dawalibi:

400,000. And we're saying this game is Dead games totally dead,

Paul Dawalibi:

right, like 303 400,000 players, we were basically calling the

Paul Dawalibi:

game Dead.

Jeff Cohen:

So you know, it's wild. And obviously, the growth

Jeff Cohen:

trajectory is there. There's a reason why we're talking about

Jeff Cohen:

it. And again, I think the fourth bullet point here, where

Jeff Cohen:

we talked about the investment pouring into the space, we've

Jeff Cohen:

said it many, many times, you know, the games are coming when

Jeff Cohen:

there's that much investment, clearly, you know, clearly the

Jeff Cohen:

games will follow the, you know, the next thing I wanted to dig

Jeff Cohen:

into and get your opinion a little bit on is this other side

Jeff Cohen:

one? Yeah. Because I think it's a story that I don't know that

Jeff Cohen:

we actually covered that much, even though it was a massive

Jeff Cohen:

news announcement just around Hugo labs and and this launch of

Jeff Cohen:

the other side. You know, Metaverse platform. We talk a

Jeff Cohen:

lot on this podcast about sandbox at the central end. And

Jeff Cohen:

they've almost really established themselves as I

Jeff Cohen:

would say the really most mainstream blockchain specific

Jeff Cohen:

meta versus I think if we talk about meta versus more, more

Jeff Cohen:

broadly, I would put roadblocks, we would definitely put

Jeff Cohen:

fortnight maybe even like Grand Theft Auto called like there's

Jeff Cohen:

other quote unquote, meta verses that we would probably put ahead

Jeff Cohen:

of them certainly in terms of adoption. But in when we're

Jeff Cohen:

thinking about web three, Blockchain meta versus sandbox

Jeff Cohen:

decentraland are usually the first ones we talk about. So the

Jeff Cohen:

other side is as already exceeded them in terms of land

Jeff Cohen:

sales value, so does this put them into the driver's seat?

Jeff Cohen:

They clearly have a massive brand with with the board apes

Jeff Cohen:

like are they the the new, hot Metaverse, we're going to be

Jeff Cohen:

talking about on this show.

Paul Dawalibi:

I mean, why does this metric even that Enter

Paul Dawalibi:

though, right? That's the final part to me. I'd like, again, no

Paul Dawalibi:

one more bullish on Metaverse than I am. The question is, I

Paul Dawalibi:

don't really get this. I don't get the land sales being any

Paul Dawalibi:

kind of metrics of metric of success. Other than it's a it's

Paul Dawalibi:

a hype metric, right? It's, it's a, it's a reach metric. In other

Paul Dawalibi:

words, how many people knew about this? How hype were they?

Paul Dawalibi:

And how much and therefore, how much money they spend, but they

Paul Dawalibi:

haven't bought anything that does anything. And as far as I

Paul Dawalibi:

know, other side doesn't do anything yet. Right? Like,

Paul Dawalibi:

there's no, there's no reason to go to the other side.

Jeff Cohen:

And I'm not even aware of it exists, like, is it

Jeff Cohen:

a game, you could even go to? concept. It's an I take a pitch

Jeff Cohen:

deck, far as we could be totally

Paul Dawalibi:

wrong. I mean, and so you're generating all

Paul Dawalibi:

these trades and trading volume and like millions and millions

Paul Dawalibi:

changing hands. But you have nothing has been created here.

Paul Dawalibi:

Right. Like there's, there's no reason to do any of this other

Paul Dawalibi:

than? I don't know, again, it's other than sort of speculation

Paul Dawalibi:

on an asset that may in the future have value for an unknown

Paul Dawalibi:

reason to me, because it's not clear why any of these land

Paul Dawalibi:

parcels will have future value. You know, I think it's Warren

Paul Dawalibi:

Buffett, who said, you know, doesn't can't farm them. You

Paul Dawalibi:

can't, like they can't rent them out as though there's no like,

Paul Dawalibi:

yes, there's doesn't generate, it doesn't create anything new.

Paul Dawalibi:

It's just money changing hands. And so I'm bothered by this one,

Paul Dawalibi:

because who cares? Who cares what the land sales are? Right?

Paul Dawalibi:

If tomorrow decentraland creates some killer reason why millions

Paul Dawalibi:

of people need to go to decentraland to hang out there

Paul Dawalibi:

to do something there to whatever, right. All the land

Paul Dawalibi:

sale stuff doesn't matter anymore. Right? What's the

Paul Dawalibi:

brother project? The bottom of this one world wide web land?

Paul Dawalibi:

I've never even heard of these guys, right? Like, if tomorrow

Paul Dawalibi:

they figure out. You go there to browse the web in the metaverse.

Paul Dawalibi:

But it's kind of like, who cares? I mean, these are these

Paul Dawalibi:

are fake metrics. All they represent his hype,

Jeff Cohen:

player base numbers would obviously clear that

Jeff Cohen:

matters more relevant study. Yes. Yeah.

Paul Dawalibi:

The other the other piece that I think you

Paul Dawalibi:

brought up was this one, which I think is worth spending a minute

Paul Dawalibi:

or two on and for those of you are listening to this, which is

Paul Dawalibi:

most of you. This is a pie chart. And the headline of the

Paul Dawalibi:

pie chart says, Where are blockchain game investments

Paul Dawalibi:

going? So that 4 billion plus number, where's that all being

Paul Dawalibi:

directed towards? Where's it being focused the four and a

Paul Dawalibi:

half billion. And the way this pie charts broken out, I'll go

Paul Dawalibi:

from sort of most to least here, infrastructure number one 1.5 7

Paul Dawalibi:

billion, and that's 37% 37.3% of all the investment guild or

Paul Dawalibi:

incubator number two at 19%. Or point 8 billion investment firms

Paul Dawalibi:

18.1% or point seven, 6 billion game slash Metaverse projects.

Paul Dawalibi:

Ironically, in fourth place, 16.7%. Point 7 billion NF T's

Paul Dawalibi:

eight and a half percent point three, 6 billion. And then in in

Paul Dawalibi:

last last place here and pretty far away. Last place. Media

Paul Dawalibi:

point 2%. And point oh, 1,000,000,005.

Jeff Cohen:

Some? Well, so you sort of stole my take a little

Jeff Cohen:

bit with your you're just kind of your reaction there. Because

Jeff Cohen:

actually, it's something that what I brought this up at first,

Jeff Cohen:

I didn't even contemplate now that I'm thinking about it, it

Jeff Cohen:

sort of sticks out very clearly. Why, how is game number one?

Jeff Cohen:

Pretty important to build. I mean, infrastructure, yeah,

Jeff Cohen:

again, that could include, you know, various blockchains like

Jeff Cohen:

that's sort of important, like the pipes, what's actually being

Jeff Cohen:

built on that matters. But then you have guild I was shocked

Jeff Cohen:

that number two is guilds. I mean, that is effectively just

Jeff Cohen:

the financing structure a way to finance players into your game,

Jeff Cohen:

right? It's we talked about it as like, like banks entered

Jeff Cohen:

servitude. It's basically like FinTech for this game fi which I

Jeff Cohen:

think eventually gets, you know, if blockchain gaming is to

Jeff Cohen:

survive in any form, or fashion, this guild system probably is

Jeff Cohen:

going to have to go away. Because if I have to take out a

Jeff Cohen:

bank loan to start playing a game, like it's just a bad user

Jeff Cohen:

experience, like that is not a good strategy for user

Jeff Cohen:

acquisition for your game, like, hey, go take out a loan so you

Jeff Cohen:

could buy assets in my game. No, that's bad. And then the third

Jeff Cohen:

being investment firm. Kind of makes sense because of the way

Jeff Cohen:

these things have sparked up. It's basically just speculation

Jeff Cohen:

Then trading but like, come on investment firm like this is

Jeff Cohen:

about blockchain gaming, why isn't investments into

Jeff Cohen:

investment firms? That doesn't make sense. And then NF T's was

Jeff Cohen:

surprisingly, though, for some reason, I actually thought that

Jeff Cohen:

would have been higher just because of all the hype. But

Jeff Cohen:

yeah, that's

Paul Dawalibi:

just to date in 2022. Right. This is just

Paul Dawalibi:

literally in the first four months of the year.

Jeff Cohen:

Yeah. And then yeah, which I know you probably have

Jeff Cohen:

some thoughts on, given your

Paul Dawalibi:

thoughts. But look, I draw a couple of

Paul Dawalibi:

conclusions from this one, media massively overlooked

Paul Dawalibi:

opportunity. Why were the leaders in the space why we're

Paul Dawalibi:

doing what we're doing, why we're building what we're

Paul Dawalibi:

building? It's because almost no one's looking there. And they're

Paul Dawalibi:

missing the opportunity. They're missing the boat, because what

Paul Dawalibi:

are people going to do in these places is consume media of some

Paul Dawalibi:

sort. This means people want to talk about it. People want to

Paul Dawalibi:

know about it. People want to learn about it. Right? Like it

Paul Dawalibi:

feeds the rest, and it's massively. There's a massive

Paul Dawalibi:

amount of underinvestment. I don't even know if that's a word

Paul Dawalibi:

right. In that category. I think so. Definitely. Where I see

Paul Dawalibi:

opportunity is where a lot of people are not looking. I think

Paul Dawalibi:

this confirms my thesis in many ways. Same comment you had

Paul Dawalibi:

though, like the guild or incubator, being number two, is

Paul Dawalibi:

crazy. And this is, in my mind, the stupid money chasing short

Paul Dawalibi:

term profit without any concept of how do you build a

Paul Dawalibi:

sustainable long term business, right? It's like, easy money,

Paul Dawalibi:

plenty of people in the third world playing played our own

Paul Dawalibi:

games, let's exploit them with these guilds and incubated these

Paul Dawalibi:

guilds, we can make a quick buck. And then, you know, as

Paul Dawalibi:

these as the margins, essentially, as the Earn piece

Paul Dawalibi:

gets smaller and smaller, the more players you get in there,

Paul Dawalibi:

eventually it goes away, but you've made a quick buck in the

Paul Dawalibi:

meantime. So it's like typical short term investor thinking

Paul Dawalibi:

doesn't surprise me that it's number two. I do think games

Paul Dawalibi:

slash Metaverse, projects probably be number one. But I

Paul Dawalibi:

just the overall the other than the media piece being way too

Paul Dawalibi:

small. And that being a missed opportunity, I think most

Paul Dawalibi:

investors are just not seeing. It's that. It's like the gaming

Paul Dawalibi:

space. There's a lot of dumb money sloshing around going

Paul Dawalibi:

after either short term bucks, or not looking at the right

Paul Dawalibi:

things, right, just not not looking at the space in the

Paul Dawalibi:

right way. And maybe investment firm gives me some comfort, but

Paul Dawalibi:

a lot of the money coming in admits they have no clue. So

Paul Dawalibi:

let's try and give it to people who may have a clue. But there's

Paul Dawalibi:

a lot of like, have no clue which, which is what I saw at

Paul Dawalibi:

the beginning of the gaming space three, four years ago,

Paul Dawalibi:

when money started pouring into esports and gaming, huge amounts

Paul Dawalibi:

of investments. What was missing was the brains to actually

Paul Dawalibi:

invest it in the knowledge to actually invest it wisely. Were

Paul Dawalibi:

going through a similar cycle in my mind.

Jeff Cohen:

That's a fun charter. I'll be interesting to

Jeff Cohen:

watch. I think this report comes out monthly. So it'll be

Jeff Cohen:

interesting to track that. That was a fun one. I actually,

Paul Dawalibi:

definitely and I think the perfect to end on

Paul Dawalibi:

Jeff. As always, these fly by. Thank you guys. For everyone who

Paul Dawalibi:

tunes in every week. Don't forget, subscribe to the

Paul Dawalibi:

podcast, go subscribe to our brother and sister podcasts you

Paul Dawalibi:

want to call it that met a woman and the business of esports. If

Paul Dawalibi:

you love this kind of content, there's so much more content

Paul Dawalibi:

that we do every week. Go follow Jeff, on Twitter at Jeff Cohen

Paul Dawalibi:

23. He's got all kinds of great takes during the week that you

Paul Dawalibi:

know you crave from the podcast. You can get it on his Twitter

Paul Dawalibi:

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Paul Dawalibi:

Don't forget, send this podcast put it on your socials. Share it

Paul Dawalibi:

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Paul Dawalibi:

future is fun, guys. We'll see you 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