4. Metaverse Sneakers, Nike RTFKT Acquisition, Adidas NFTs, Big Tech Metaverse Threat, $100M Blockchain Gaming Fund
In this episode, Nike purchases virtual shoe company RTFKT that makes NFTs and other products for the metaverse, NFTs launched by Adidas Originals after the company buys a plot of land in The Sandbox, the founder of The Sandbox says big technology companies are a threat to the metaverse, Gala Games and C² Ventures launch a $100M fund for blockchain gaming, and so much more!
Transcript
From the boardroom to the metaverse, this is the meta business podcast. I Paul Dawalibi. The
Unknown:master of the metaverse will lead you through the biggest business stories in the metaverse. Join us
Unknown:as we break down the news and trends from the C suite lens, bringing you insights, analysis and
Unknown:discussion that you can't find anywhere else. Every single week. Welcome to metta business.
Unknown:Welcome to episode four of the metta business podcast. I am Paul master of the metaverse
Unknown:Dawalibi. I'm joined today by my friend my co host, Jeff the juice Cohen. None other than Jeff
Unknown:the juice Cohen I should say, Jeff, you're like you're famous. Now I have people telling me how
Unknown:much they love the juice is everything I ever wanted.
Unknown:For those of you guys who are new here, just a little reminder, because the podcast is new. What
Unknown:we do here is we cover all the biggest stories that intersect the worlds of business and what
Unknown:we're calling the metaverse or people are calling web three. So real focus on the business news and
Unknown:stories coming from the metaverse and web three worlds and everything that intersects sort of
Unknown:blockchain and gaming. So if this is what you're interested in, you're in the right place. And we
Unknown:welcome you, Jeff, we've got a ton of news to cover this week, some some holdover themes from
Unknown:last week. So there's, you know, similar players in the news this week. And and I think we should
Unknown:start with maybe I don't know if this is the biggest news this week, but I thought it was the
Unknown:most interesting. And the picture
Unknown:here is definitely the most interesting. Let me let me share this screen here. For those who are
Unknown:watching. If you're listening to this, I'm sorry, you don't get to see this. But, but this is Nike
Unknown:in the news. And, and the headline here was Nike just bought a virtual shoe company that makes NF
Unknown:T's and sneakers for the metaverse. The company is called. I'm gonna pronounce it. It's not the way
Unknown:it's spelled. It's called artifact. Er, but it's spelled RT fkT. They make shoes too except they
Unknown:only exist digitally. These are NF T's. They are digital shoes that are designed to be worn
Unknown:digitally in the metaverse.
Unknown:Jeff, what do you make of this acquisition? I guess what are some of the big thoughts? This is
Unknown:Nikes. First, you know, we talked about Nike land last week. But this is the first acquisition I
Unknown:think that they've done that touches the metaverse, right like they they have done some
Unknown:things that are more web three. They're more Metaverse related.
Unknown:But this is the first sort of acquisition Nike has made Is this a sign of the times that Nike is
Unknown:making acquisitions in this space? I think yeah, I mean, it's it's it's very interesting. And you
Unknown:know, who would have thought that when when sort of Metaverse kind of started becoming a big
Unknown:buzzword that one of the kind of most forward leaning companies in this space of the non
Unknown:endemics, I would say, has really been Nike. And they were pretty early with the roadblocks. Nike
Unknown:landed now they're really taking a big step with this, this artifact acquisition. And it's
Unknown:impressive the pace at which they've moved for such a large company to be innovative, and be
Unknown:entering the space. And I do feel a bit vindicated. I think we talked about this actually,
Unknown:on the last on the last podcast how, you know, I think I had made a comment, how what they were
Unknown:doing with Nike land was very interesting, but I would get more excited when they started kind of
Unknown:positioning it as Hey, rather than have it be a virtual space where we do brand advertisements and
Unknown:try to sell physical shoes in the in the IRL world. Have it be Hey, we're just trying to sell
Unknown:you digital shoes. I kind of thought that was where this was headed eventually. I didn't think
Unknown:that it would be six days, kind of after I said that. So I guess kudos to me for calling out here.
Unknown:Some of your prognostications skills are rubbing off on me, potentially. But yeah, I mean, I think
Unknown:this is a really interesting acquisition, for sure.
Unknown:Let me let me just I want to bring up sort of two things that were in this article that I want to
Unknown:push a little bit. So first of all, it says that the company claimed in February, they did a
Unknown:collaboration with teenage artists. Ferocious, not ferocious. Ferocious, to sell real sneakers paired
Unknown:with virtual ones. And they managed to sell supposedly 600 pairs slash NF T's in just six
Unknown:minutes, netting over 3.1 million, which is, you know, nothing to nothing to scoff at. Right.
Unknown:That's a substantial amount of revenue in six minutes of time. What's interesting, though, is
Unknown:that in this article, they mentioned that I'll read you precisely what they say. He says it's not
Unknown:clear if any of these digital items are worth as much
Unknown:Now, looking on open sea and nifty gateway, I see a number of them are either listed for or have
Unknown:recently sold for less than their original prices. And so sort of interesting data point here that
Unknown:the NF T's that were sold as part of that February sort of drop,
Unknown:have not appreciated in value. Now, that's not, you know, that's obviously hasn't been the case
Unknown:with the entire market, there's plenty that have appreciated in value substantially. But I also
Unknown:find it interesting that it doesn't mention what the value of the physical sneakers have done.
Unknown:Because if you look at the physical sneaker market, right, just about anything limited edition
Unknown:has shot through the roof in terms of price over the last couple of years, right? The sneaker
Unknown:markets, maybe the only other market, other than NF Ts and crypto. But as seen, and maybe luxury
Unknown:watches that have seen such a massive, you know, appreciation in value. I guess I have a question
Unknown:here. Is this the perfect intersection of physical and digital Right? Like are sneakers, the holy
Unknown:grail for NF T's in your mind because of the hype around the physical product also? Or does that not
Unknown:matter? And is the proof that the NFT the NFT versions of the physical shoes have not
Unknown:appreciated in value? Right? It is? I don't see what I'm saying. They're the perfect, I don't
Unknown:think they're perfect. I mean, I think for me, the most interesting digital goods are ones that have
Unknown:use like in games, like I'm not sure cosmetics, you know, cosmetics clearly have value in games
Unknown:that's been proven time and time out with with cosmetic economies and games. However, I think,
Unknown:you know, digital items like swords or guns that have actual power within games and can can kind of
Unknown:help you win, I think will always be potentially more interesting and hold more value. However, I
Unknown:do think you may bring up a great point just in terms of the sneaker culture. Like I think it is
Unknown:one of the few items where you have like baseball cards, watch it, like it's one of the things that
Unknown:people actually collect, just to collect. So I think that that's why the the fact that the value
Unknown:of these initial drops have, you know, the ones that came out in February dropped off, it doesn't
Unknown:concern me that much. Because these can fluctuate in prices. And there are probably people that are
Unknown:buying these as collector items, not necessarily a speculation that kind of a speculative hype mania.
Unknown:So I do think that the fact that they're it's a it's a sneaker
Unknown:collaborate collaboration probably actually does add a little bit of value there.
Unknown:How much one sort of one final thought on this? How much do you think
Unknown:the investors in artifact play into this exit here? Right? Like, again, I'm trying to what I'm
Unknown:trying to do a separate hype, from underlying sort of interesting businesses from you know, any other
Unknown:factors that maybe we're considering, right? Because I think part of our job with this show is,
Unknown:in the time we're living in now is separating the hype from the genuinely interesting and good
Unknown:businesses and opportunities. So that people can think critically about what they're reading about
Unknown:and listening to right. Like, fundamentally, I think that's one of our jobs. And
Unknown:when you look at the list of investors in artifact, right, Andreessen is the first investor.
Unknown:Yeah. And recent, maybe the best venture investors on the planet like other than, like, you know, I
Unknown:would put Sequoia and sort of them in, in a, in a very small group at the very top. And Andreessen
Unknown:probably more active in the gaming space than just about anyone else. So far from the big the big
Unknown:VCs, I, you know, not the pure, not counting the pure play,
Unknown:you know, VCs? Is it? Is this exit a function of, it's a it's an Andreessen company, and they're
Unknown:just really good at manufacturing exits, or do you think this is truly Nike?
Unknown:Internally having a very clear vision around where they want to go with the metaverse with digital
Unknown:goods within fts. And this is just part of their roadmap, and we're probably going to see two or
Unknown:three sort of big plays from Nike going forward. Yes, this is sort of an interesting kind of bigger
Unknown:question about about venture capital. I mean, did Are you are you asking did Andreessen pick a good
Unknown:company that did well, and then had an exit because entries, it's good to pick companies or
Unknown:get Andreessen, like hype up and trick Nike into buying this company that they invest in? I think I
Unknown:didn't use that former, you know, rather than the latter, but that's, that's, I guess, a venture. A
Unknown:bigger broader question. I'm venture capital.
Unknown:No, but my
Unknown:meaning is Andreessen the signal that led to this, like, it's an Andreessen company, so, you know,
Unknown:it's got to be good, or something. Yeah. I think that's always the case. There's some validation
Unknown:and they have a network and network of, you know, strategics and bankers that they work, so it is
Unknown:very if you're an Andreessen backed company,
Unknown:You're going to get certain opportunities that maybe a smaller company or someone with smaller,
Unknown:less known backers are afforded the opportunity to to be involved with. What What I'm interested to
Unknown:see, I didn't really see where, you know talked about they're developing virtual shoes, but didn't
Unknown:talk about what platforms it was developing for. Is it just Roblox? Is it any game? Because it gets
Unknown:back to what we talked about last episode with interoperability? And it's not clear to me yet
Unknown:exactly. Where you can wear these shoes. You know, it's not as though is it only a Nike land on
Unknown:Roblox is it? Hey, at some point, they want to be able to put shoes in any video game, anything
Unknown:developed on unity, like, I'd like to understand a little bit more about the strategy of where you
Unknown:can actually buy and wear the shoes. Well, that that brings up a whole other interesting sort of
Unknown:conversation, because from my understanding, and from what I read,
Unknown:you can't actually wear these digital shoes anywhere yet, right? They are supposedly
Unknown:developing for these platforms. But today, all you can do is sort of have it in your wallet.
Unknown:Right? It goes directly in your meta masks wallet or whatever.
Unknown:What that tells me and also the fact that the company was founded in 2020 is, you know, this is
Unknown:a really fast acquisition, right from startup to acquisition, in essentially a year
Unknown:is incredibly quick. And then the products not fully fleshed out, which, again, I come back to
Unknown:sort of, does Nike. Is Nike strategy really fully fleshed out here? Or is this like, Oh, my God, we
Unknown:need to make a play. Everyone's doing stuff here. Right? Let's let's make a big splash. Let's
Unknown:they're doing shoes. It makes sense for us, even though, you know, although, again, they had 3
Unknown:million in revenue from that one drop. So, you know, the company's new, but I guess the third
Unknown:option, the third potential option is that it's a little bit of an aqua hire. I don't think he's
Unknown:feeling panicked. If anything, Nike has been very early to this. So I don't think this is a scenario
Unknown:where we're sitting two years now. And everyone has a metaphor strategy. And everyone's on third
Unknown:base, and you know, someone like pick a different company, and McDonald's, for example, just comes
Unknown:out. It's like, Oh, my God, we need to, like we're three years behind. We need a metaphor strategies,
Unknown:like go by whoever will take our money. That's not this because Nike is we just talked about at the
Unknown:very beginning. I mean, they are incredibly early to this. So it's possible given how early stage
Unknown:this is. This could be an aqua hire, could be Hey, we like this team. We want to bring them in and
Unknown:kind of help they can help shape our Metaverse strategy. So if I had to guess, you know, it is
Unknown:probably a bit of that. Jeff, can we contrast this with sort of the second story here, but I really
Unknown:want to lump it in sort of with the first story and and that is Nikes major competitor, right. So
Unknown:we've got Adidas here with a with a story of their own with a play of their own and the headline here
Unknown:was adidas Originals launches NF T's and buys a plot in the sandbox metaverse. The article goes on
Unknown:to say that adidas Originals will launch their first NF T's as they dive into web three in the
Unknown:metaverse.
Unknown:That's going to be a commercial part of the metaverse. They're going to market their digital
Unknown:and physical products. And they're going to be inspired by this collection is going to be
Unknown:inspired by and presented in partnership with NFT leaders, such as board a yacht club G money, and
Unknown:the team behind the punks comic. All the NF T's are on sale. As of today, actually, the day we're
Unknown:recording the 15th. And buyers will receive exclusive access to adidas Originals experiences
Unknown:and products. So I see a distinct difference here in approach and strategy. Right? Adidas
Unknown:not acquiring a company, right? Launching a collection with an existing platform with sandbox.
Unknown:And also partnering with other sort of creators and artists. And if the creators and artists in
Unknown:the space, right so very much it seems a more community and sort of I'll call it a less
Unknown:aggressive approach and that they're, you know, working with the existing players. They're Nike
Unknown:seems to have a clear vision in terms of like, we want to buy and do something. I don't know if you
Unknown:see it that way. Or if you don't see a difference between the two approaches here. And which one do
Unknown:you think is the right one, I guess? Yeah, no, I think you you summed up the differences decently
Unknown:well. It feels like Nike has sort of taken the first they're a little maybe a base or two
Unknown:ahead of Adidas. I'm not sure I necessarily understand the why by the sandbox land. Like I you
Unknown:know, I
Unknown:Still and again maybe it's
Unknown:you know my naivete towards sandbox and kind of I just feels to me like there's a little bit of if
Unknown:you build it they will come strategy and sandbox where I if I'm, if I'm a brand right now I'm going
Unknown:to the platform, Roblox where I know there's 50 million users daily active users rather than going
Unknown:to sandbox which, you know, I am not sure if we have an up to date daily active user account, but
Unknown:I'm sure it's, you know, a fraction of what of what robots is. So I'm not sure the concept of why
Unknown:go pay to buy this land, which we know actually isn't really that cheap. Clearly, for someone like
Unknown:Adidas, it's, it's it's kind of pennies on the dollar, but it's in the millions of dollars, like
Unknown:why go buy land there, when you could kind of do what Nike did, and create something in robots
Unknown:where I think there's just more people in the environment. So to me, I take Nike strategy also,
Unknown:you know, I like the idea of selling the actual virtual goods, you can you can, you could wear in
Unknown:different games, eventually. I'm not sure what the deal is, it seemed more like they're, they're
Unknown:selling NF T's like digital art versus, you know, actual things you can play in video games. This
Unknown:brings up an interesting business model question I've got for you, Jeff, which is,
Unknown:do you how critical Do you think it is? So we talked about Nike, we talked about Adidas, how
Unknown:critical in your mind, is it to pair a physical good with the digital good? Like, is this? Is this
Unknown:something that do you see this as sort of a short term trend that eventually goes away? When people
Unknown:recognize the value the pure value of the digital goods and you don't need? Like? Is the physical
Unknown:good a crutch? Or is it brilliant sort of marketing? Is it like, how do you see the
Unknown:connection between those two things? And do you feel it's necessary for success? It's definitely
Unknown:an early stage thing. I think you'll hate my answer a little bit, because it sort of depends on
Unknown:where we are in sort of the entrance into the metaverse, right? If you take the the sort of
Unknown:where we're all headed is we're going to spend most of our time in some sort of digital
Unknown:Metaverse, and our digital avatar will become kind of that representation of ourselves will become as
Unknown:important, if not more important than our physical in real life representation of ourselves, you'll
Unknown:start to see less and less of the physical being tied to the digital because the digital will be
Unknown:all that sort of matters or be more important. However, right now, I think we are a long way from
Unknown:that. So I do think you know, with a lot of this, there is some element with with any sort of luxury
Unknown:goods and I will say NF T's they function right now kind of as luxury goods, a lot of people are
Unknown:buying these things. So they can make it their Twitter profile, or they can tell people about it
Unknown:or be part of a club. So there is a lot of this conspicuous consumption when you're dealing with
Unknown:these things. So I think tying a physical good to it saying like, hey, look, you have those cool
Unknown:shoes, like, oh, wow, you bought that NFT. And like, you're one of those people that bought that.
Unknown:It's a conversation starter. You know, like I bet Jimmy, you know, our mutual friend and colleague,
Unknown:Jimmy from the live stream on in the podcast. He's the kind of guy that I could see buying, you know,
Unknown:something like that and wearing those shoes. I don't know if you, you agree on that, or my whole
Unknown:point. But yeah,
Unknown:yeah, I, you know, a big part of me, wants to believe that it's, it's sort of a transitory kind
Unknown:of crutch, right like that. There's some concern that people won't. And I don't mean, like a lot of
Unknown:the people listening to this and watching this, all understand the value the future importance of
Unknown:NF Ts and crypto and blockchain and all these technologies and how, you know, I think everyone,
Unknown:for the most part, who listens to this has really bought into a certain vision of the future. But
Unknown:for the mass for the, for the masses, right for the mainstream, who are still somewhat skeptical,
Unknown:who maybe don't understand the value of, of, you know, ones and zeros of a totally virtual product.
Unknown:Like it's most definitely an in an interesting crutch slash marketing tool, right? To say, look,
Unknown:you're gonna buy the NFT, but you're gonna get a physical pair of shoes. So the $1,000 or $2,000
Unknown:that you paid. There's not so bad, right? Like you could in your mind as someone who's maybe not knee
Unknown:deep in the space justify it. And so I do see it as kind of clever marketing. But I think for the,
Unknown:for the metaverse to truly be as transformational and revolutionary is I think you believe it will
Unknown:be an I believe it will be
Unknown:the physical, we can't be tethered to the physical in any way. Right? Like, we can't have the
Unknown:physical be part of that equation. You can't have the trappings of the physical world for the
Unknown:metaverse I think to be truly successful long term. We have to be able to digitize everything.
Unknown:Everything we do everything we wear everything we like the all the
Unknown:facets of humanity needs to be able to be virtualized, I think for this to work, and so
Unknown:that's fair, but you need to people need to adopt that. So if this is a way that gets people to
Unknown:start adopting that, I think, you know, we're so early in the game that it's, it is a good way to
Unknown:onboard people into this world of understanding these things.
Unknown:Um, oh, yeah. It's just does it teach the right thing? Right, does it? Is it the right message,
Unknown:which is like, it's, it shouldn't feel like just an add on. Right? It shouldn't feel like a bonus.
Unknown:Like the like the toy in the Happy Meal, right? Like, people need to believe this is the Happy
Unknown:Meal, not the toy in the Happy Meal.
Unknown:And so, you know, part of me loves it. Because I'm a I'm also a fan of, you know, we're the records
Unknown:is always better than the happy meal. So your analogy was a good one, but just backwards.
Unknown:Everyone bought the happy meal for the toy, not a toy.
Unknown:But let me just sort of it's a good sort of segue to this other article, also was sandbox article,
Unknown:where I'll just bring it up here, the co founder of the sandbox, Sebastian Borg, it Borg it
Unknown:basically threatened. He says big tech threatens open blockchain based metaverse. He says the
Unknown:decentralized Metaverse is his biggest consideration, and must be defended against big
Unknown:tech. The blockchain based video game platform is gaining widespread attention for its NFT virtual
Unknown:land sales, with some plots going for millions of dollars. So
Unknown:you know, in this, obviously, they name the meta, which is Facebook. Now they name Tencent, they
Unknown:NetEase right. Some of these very big tech companies that are building their own sort of
Unknown:Metaverse plays. I find it somewhat ironic that the sandbox, which is its own closed ecosystem,
Unknown:for the most part
Unknown:is sort of, you know,
Unknown:crying about about big tech.
Unknown:Is very Tim Sweeney. Right? Like cry Oh, no, these people are bad come to my version, which is like,
Unknown:pretty similar, but not owned by me, not them, so it's better.
Unknown:But
Unknown:the reason why I Liked this article is he's right, right? He's absolutely correct. The problem is,
Unknown:none of these players not meta not NetEase, not Tencent, not sandbox, not decentraland. Not like
Unknown:no one can make that argument with any legitimacy for the reason you just described. Right. Like,
Unknown:so. So who becomes?
Unknown:And there's an interesting philosophical business question here. Right? The internet had Defense
Unknown:Department beginnings, right. And being government word, were not necessarily driven by profit. And
Unknown:that sort of helped the adoption of certain standards.
Unknown:Why is there a regulatory body in your mind that solves this problem? Do you think the big tech
Unknown:firms get together and solve it? Jeff, do you think you get guys? Sebastian here? I'm not sure
Unknown:the big tech firms getting together and solving it would would satisfy what he's saying. I do think
Unknown:at the core of this is his I think his premise is is a bit flawed. Like if you just pull up the
Unknown:headline, you know, he is the argument that he makes is almost impossible to dispute. The
Unknown:question that I guess I have for you is, does the eventual Metaverse as you envision it, or kind of
Unknown:the if we go call it nirvana? Metaverse, whatever the perfect Metaverse is, does it have to be open
Unknown:blockchain based like, it feels like there's a lot of people who are trying to push blockchain into
Unknown:the metaverse when to me it's like, they don't have to necessarily be related at all. You know,
Unknown:it's kind of the same thing where like, people would talk about cloud gaming, and always talk
Unknown:about subscription because it's like, well, that's how Netflix did it with Cloud street with with
Unknown:streaming like, just because something like for the metaverse, we don't necessarily need
Unknown:blockchain. I understand that having ownership of items of digital goods is important but like, I
Unknown:don't necessarily think that needs to be on an open decentralized ledger. I can have ownership of
Unknown:a good if it's in a database that's owned by Facebook, like I you know.
Unknown:Yeah. for all intensive purposes, for the artist. My is my point correct or or my off base there in
Unknown:your mind. I was with you right till the very end. So I think for the ownership of assets. Blockchain
Unknown:makes total sense, right? Because it's
Unknown:Like, if you buy a piece of land in Florida, right? That land sale gets recorded in a public
Unknown:ledger. That's, you know, the government here doesn't have to be on the blockchain. No, but
Unknown:meaning it's accessible by anyone, you know, the government's not gonna go out of business.
Unknown:You know, they're not going to disappear tomorrow. So there's certain safety and comfort that comes
Unknown:with a record being stored into decentralized way. If you're talking about the ownership of an asset.
Unknown:I think for the metaverse, capital M to happen in the way Sebastian, from the Sandbox is describing
Unknown:here, you really only need like open technology standards, right, agreed upon protocols and
Unknown:standards so that one can communicate with the other. And I don't think that necessarily at all
Unknown:has to be blockchain based at all right? Like that, to me is, if anything, I don't think
Unknown:eventually will be blockchain based. I think the the solutions there will just be agreed, agreed
Unknown:upon protocols, API Standards, whatever, right so that all of these meta different platforms can
Unknown:talk to each other and interact with each other. The bigger question I have from this article for
Unknown:you is, and I think no one's talking about it for whatever reason is, what is the business model
Unknown:that wins in Sebastian's vision of the metaverse here, right? So in this perfectly open,
Unknown:sort of standard, standardized Metaverse, right where big tech is not dominant. How does anyone
Unknown:make money other than through
Unknown:NFT? purchases? Right, like other than sale of cosmetics? Do we see new business models? Is it
Unknown:subscriptions is it I don't cosmetics? I mean, it could be it could be a you're the company and
Unknown:there's there's a whole rabbit hole we can go down with like Dows, and kind of how the lot of these
Unknown:Metaverse kind of blockchain plays are creating decentralized autonomous organizations and sort of
Unknown:giving power back to the people and like, maybe that is where all this heads to me that
Unknown:I'm not sure that that that we get that far. But but that is a rabbit hole, we can go down now or a
Unknown:different time. But potentially the way the way these companies make money is that just because
Unknown:they're here so early, they own so much the land they own so much of the stuff they own so much,
Unknown:they literally made the money that it's like, they just basically
Unknown:either rent the land to people, sell them more stuff, sell them things. So it's just like
Unknown:creating things within that. Because they were there early, they have all the stuff to begin
Unknown:with. And then you start parceling it out and you, you know, effectively get Fiat for giving them
Unknown:goods. But I'm not sure that it has to be a completely different business. Like I don't think
Unknown:it's a subscription model or anything like that.
Unknown:So you think business models just sort of translate over? You don't think we've seen
Unknown:completely new ways of thinking about how these how completely open meta versus make money?
Unknown:Why does that? Why would it be? I guess different because it's completely open. Like someone still
Unknown:has to, I guess the openness doesn't necessarily to me mean anything besides Hey, everyone like
Unknown:that ownership rather than being in a database owned by a company. It's in a database, or a
Unknown:blockchain not owned by anyone.
Unknown:But I think like the the sort of basic economic tenets of like, buying and selling goods would
Unknown:still apply. I yeah, I mean, I've heard theory, I've heard a lot of people believe that it's still
Unknown:going to be like ad driven like most of the internet, right? But fundamentally,
Unknown:all the talk about NF T's and everything else is going to be dwarfed by the amount of advertising
Unknown:dollars, you know, that are going to be, you know, pumped into these new these new worlds. And I, you
Unknown:know, I could, I could make all of those arguments. I'm just curious. Everything, if we get
Unknown:to a world where everything digital, it's almost like, Who are you selling the at? You're selling
Unknown:ads to buy digital goods? Right? Yeah. Are you selling the ads to the owner of the platform,
Unknown:they're still someone's gonna buy the digital goods. So you have digital, you'll effectively
Unknown:have companies selling digital goods that I guess are advertising to, you know, whoever owns the
Unknown:platform. But in order for that, in order for it to be worth it for them to buy the digital ad,
Unknown:that would also have to be a digital economy based on buying and selling digital goods. You know?
Unknown:Yeah, no question. Right. But but the I also believe in this, we just talked about it, right.
Unknown:There's this sort of in between period, where no one's plugging in yet and spending seven days a
Unknown:week in a virtual world and living and working and operating in there, right. There's no reason why.
Unknown:If we believe a lot of attention is moving there that you can't your advertisers won't want to hear
Unknown:you're saying I 100% agree in the early days, you're right average
Unknown:will probably be a bigger driver. But if we get to this capital and Metaverse by definition,
Unknown:advertising couldn't be bigger than the, you know, the GDP of goods being sold like it just fair.
Unknown:Fair to make sense.
Unknown:Let's talk about one last story. One sort of another big story this week. And I feel like this
Unknown:is going to become a recurring theme. And I look, I think it's our duty to cover it also. And, and
Unknown:this is from VentureBeat and the headline here gala games and see two ventures c squared ventures
Unknown:launch $100 million fund for blockchain games. They've launched this 100 million dollar fund
Unknown:according failure called to accelerate the development of blockchain gaming. It's an alliance
Unknown:between gala games, the blockchain game company headed by Zynga co founder, Eric share Meyer, and
Unknown:a new crypto investment led by Charice sun, former head of blockchain investments for huobi.
Unknown:This is it says the fun comes after a whirlwind gala vers event over the weekend in Las Vegas,
Unknown:where gala Games announced game deals with will right, Peter Mullenix, Ember games, AMC and
Unknown:certain affinity.
Unknown:And so a lot of big names in here. I mean, Jeff, is this more of the same? Do you see anything
Unknown:unique here?
Unknown:I think you hit it with sort of the last sentence you threw in there in terms of a lot of big names.
Unknown:And that's that's kind of why I picked pick this story for us to talk about. Because frankly, like
Unknown:you said, there are, as we had predicted there, every week, there's three or four of these, hey,
Unknown:XYZ raises 100 million $200 million fund to invest in blockchain games, which great, that's awesome
Unknown:for the ecosystem. The interesting thing here was was the names of the people that are getting
Unknown:invested. I think we've talked a lot about this. It's been a recurring theme, how, you know, for
Unknown:blockchain gaming ecosystem to really grow and take off, you need more people who have experience
Unknown:building great games to actually come build great games that use blockchain as a mechanic, rather
Unknown:than as a crutch and kind of the whole point of the game. So the fact you see well, right, who,
Unknown:you know, correct me if I'm wrong, was created as a Sims very famous game designer. And the other
Unknown:guy forgot his name, but I think he was the watermelon guy behind fable.
Unknown:So, you know, these are kind of royalty items, you know, folks in the industry, I think that is a
Unknown:great sign.
Unknown:You know,
Unknown:it's this, this was an interesting story for me, and I didn't expect to see, I think we said on the
Unknown:last podcast, and everyone should go listen to previous episodes if you haven't caught up yet.
Unknown:But I think I mentioned on a previous episode, that we were gonna see at least three or four of
Unknown:these in the next few months, right like the the it was inevitable that I think we agreed that more
Unknown:and more of these were going to pop up what I find, and this is sort of my take on these
Unknown:blockchain based gaming Metaverse slash Metaverse fund slash slash Metaverse slash web three funds
Unknown:venture funds, is you end up with what happened to venture capital in Canada in like the mid 2000s.
Unknown:And let me explain what happened in Canada in the mid 2000s. With venture was you had the government
Unknown:that essentially seeded a half dozen private venture capital funds, right. And that went and
Unknown:raised money. So you had you ended up having six funds in in a certain area and a certain geography
Unknown:in Canada, that we're all doing tech, and that we're all managing 50 to $150 million, right. And
Unknown:the result of that was for the next 10 years, or the next five years, every single half decent tech
Unknown:company that came out of Canada would raise a round, and have every single one of these funds
Unknown:invested in their round, right? Like, because to put together you know, 5 million or $6 million
Unknown:round, you would need a million from this guy and a million from that guy. And, you know, always
Unknown:three to four out of the six funds would be in every single deal. decent deal, right? And I feel
Unknown:like the gaming funds went down that path. Now the blockchain based gaming and Metaverse funds are
Unknown:going down this path where they're still as for all the excitement and hype and my conviction that
Unknown:this is the future, there's still a limited number of good deals. And every single one of these
Unknown:funds, they're all going to be in the exact same deals, right? And so if you're an LP, and you're
Unknown:looking at the space like
Unknown:that none of them start to feel or look any different is my concern, right? Like, but if the
Unknown:question I have, I guess, Paul, then if you're an LP, if it's it sounds like then the answer is you
Unknown:can go to any of them or none of them. But like wouldn't it still be better if you want exposure
Unknown:to go to any of them? So I guess I don't understand from an LPS perspective, why is that
Unknown:bad? But how do you make
Unknown:How do you make that decision? Right? When they all look the same feel the same for the most part,
Unknown:are invested in the same deals, or just betting on the space right?
Unknown:In or not. I mean, I get your I see your point that you'd like someone to be differentiated and
Unknown:better. But I guess if it's such a niche where it's like they're all the same, then the answer is
Unknown:zero or one question like, then you can make a choice if you want in or out. But your overarching
Unknown:point is you'd rather like bigger funds come in and kind of have, you know, just more players like
Unknown:is that is that kind of what you're doing? More players, players of varying size, right? Not just
Unknown:all 100 million dollar funds, but some 50 and some 500, right, so that you can see companies through
Unknown:their lifecycle, but also just like innovation, because I think with Metaverse, web three, all the
Unknown:themes we discuss, there's a lot of opportunity, I think, to think different about how venture is
Unknown:done, whether it's more of a venture studio model, whether it's, you know, part of 10% of your fund
Unknown:is direct investments in, you know, crypto assets themselves or something, you know, something
Unknown:that's anything that's different or innovative, I would love to be able to, to I would love a story
Unknown:that comes out and talks about that, even if it's just part of the storytelling because all of them
Unknown:are starting to feel way too similar to me. And
Unknown:again, I don't know if that's just because there's so much hype that
Unknown:everyone jumps in without sort of thinking through completely the model, right? If you can go raise
Unknown:100 million and just by saying your blockchain based gaming venture fund, right, like, why make
Unknown:the extra effort? Yeah.
Unknown:But I do think I do think it's something to watch like if we start seeing for more funds like this
Unknown:all exactly the same.
Unknown:I think we need to have a sort of a serious discussion as an industry to say, what does that
Unknown:mean for the companies in this space? So I was gonna say then we should start a blockchain gaming
Unknown:company.
Unknown:That's true. That is the lesson here.
Unknown:Man that went fast that flew by Jeff we. That's that's all we have for this week. Guys. Just two
Unknown:reminders. These episodes come out every single week they drop every Monday or Tuesday. Right now
Unknown:is the schedule we're going with. Also, if you love like Metaverse themed content, make sure to
Unknown:check out our sister podcast met a woman hosted by Lindsey poss who
Unknown:is a co host on the business of esports which is maybe how you found this podcast. If you didn't
Unknown:find this podcast or business of esports definitely go check out business of esports Jeff
Unknown:and I make some great content there especially the Wednesday night 8:30pm live stream 8:30pm Eastern
Unknown:Time Live Stream, but we're gonna continue to put out meta business podcasts every single week,
Unknown:Jeff, thank you as always, everyone loves the juice. Everyone. Thanks everyone here in the juice
Unknown:every single week. And feedback. Yeah, love. We'd love feedback on how you guys are liking the show.
Unknown:And we will see you next week.
Unknown:Thanks for watching this episode of meta business. Make sure to subscribe to the podcast on Apple
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