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20. Metaverse Coke, Orphan NFTs, Axie $150M Bailout, F1 Delta Time Shutdown, Decentraland Sandbox Struggles
Episode 2011th April 2022 • META Business • Holodeck Media
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In this episode, we discuss Coca-Cola releasing a soft drink aimed at gamers and the metaverse, Ubisoft no longer making content for some games including no more NFTs, the shutdown of F1 Delta Time leaving people with worthless NFTs, Sky Mavis raising $150 million in a Binance-led funding round, Decentraland and Sandbox struggling with user acquisition, and so much more!

Episode 20 Keywords: Coca-Cola, soft drinks, Ubisoft, NFTs, NFT, F1 Delta Time, Sky Mavis, Axie Infinity, Binance, funding round, metaverse, user acquisition

Transcripts

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

Paul Dawalibi:

boardroom to the metaverse. This is the meta business podcast. I am Paul Dawalibi. I'm

Paul Dawalibi:

joined today by my friend and co host, Jeff the juice Cohen. For those of you who are new here,

Paul Dawalibi:

welcome to the official podcast of the metaverse. What we do here is we cover the most pressing,

Paul Dawalibi:

Metaverse, stories and news of the week but we look at all of it through a business and C suite

Paul Dawalibi:

lens we dissect we analyze the business implications of everything happening in this

Paul Dawalibi:

amazing industry. For our regular listeners. Thank you guys for tuning in tuning in every week. Thank

Paul Dawalibi:

you for leaving five star ratings and reviews on the podcast if you haven't already go do that it

Paul Dawalibi:

helps others to find the podcast and and subscribe, right follow the podcast whether you're

Paul Dawalibi:

on Spotify or Apple podcasts or Google Play or Stitcher wherever you get this podcast. Make sure

Paul Dawalibi:

to hit that follow or subscribe button so you get notified when a new episode drops and they drop

Paul Dawalibi:

every single week. Jeff How you doing this week?

Jeff Cohen:

Doing very good. I'm actually on vacation in Florida. You know so just came back

Jeff Cohen:

through the pool. I had a nice little island drink but nothing I'd rather be doing more than this.

Paul Dawalibi:

If I expect you to come back with us tanned as I was after my time in Florida so

Jeff Cohen:

but I golf yesterday I put on like 50 SPF but apparently I was not strong enough to

Jeff Cohen:

defeat the sun.

Paul Dawalibi:

I'm jealous. I'm jealous. The only golfing I can do in New York at the moment is is

Paul Dawalibi:

work virtual unfortunately. In the metaverse. There you go. I just want to mention Jeff, before

Paul Dawalibi:

we jump into our stories this week, I for our listeners who are really into crypto, obviously,

Paul Dawalibi:

you know Kryptos a big part of what we talked about here on this podcast because a big part of

Paul Dawalibi:

the metaverse I was on a podcast this week. It should it should be out by the time you guys hear

Paul Dawalibi:

this. The future of money podcast which is very much focused on the crypto space. But the

Paul Dawalibi:

conversation was all around the intersection of gaming and crypto and Metaverse and things like

Paul Dawalibi:

that. So definitely go check that out the future of money podcast. The episode should be out by the

Paul Dawalibi:

time this drop. So curious what you guys think of that discussion. It's a little bit more crypto

Paul Dawalibi:

focused. Jeff, let's jump into the topics this week. Let's start with something fun as we you

Paul Dawalibi:

know often do, and this is Coca Cola news. We wouldn't expect maybe to have Coca Cola Metaverse

Paul Dawalibi:

news, but we do and the headline here is Coca Cola launches its latest weird soda flavor in the

Paul Dawalibi:

metaverse. So they announced this new flavor. It's from their Coca Cola creations department. It's

Paul Dawalibi:

apparently inspired by gaming and it's called zero sugar bite. For those watching this and not

Paul Dawalibi:

listening. You can see the image of the can it's sort of purplish it looks pixelated. The the

Paul Dawalibi:

interesting part here is this is going to appear or it has launched first in the metaverse

Paul Dawalibi:

specifically fortnight. And it's only coming in physical form in May so call it about a month from

Paul Dawalibi:

now. And the flavor the real life flavor is supposedly going to be or at least coke has

Paul Dawalibi:

described it as the flavor of pixels. I have two questions on this one. How would you rate Coca

Paul Dawalibi:

Cola sort of entry into the metaverse because I think this is one of the first times I've heard

Paul Dawalibi:

about them doing something like this. And second of all, well, how do you feel about this sort of

Paul Dawalibi:

strategy of Metaverse launch first, then real life launch second.

Jeff Cohen:

I actually I like it. I mean, that was one of the things I was gonna point out. I mean, I

Jeff Cohen:

think the I liked the strategy of kind of melding the digital to the physical we. We've talked about

Jeff Cohen:

this in many episodes in the past, like I think that is a really creative way to do it. I think

Jeff Cohen:

it's interesting that they're kind of using Metaverse that are Metaverse to be synonymous with

Jeff Cohen:

with fortnight here, I'm sure you know, the folks that epic are probably happy that branded in that

Jeff Cohen:

way. And they you know, we might push back a little bit but I guess it's fair to say that

Jeff Cohen:

fortnight is a Metaverse currently and arguably maybe even the most the most developed at this

Jeff Cohen:

point. So I think it's a good it's a good brand activation. I've no idea what the flavor of pixels

Jeff Cohen:

tastes like. But

Paul Dawalibi:

that's except to find out. We'll find

Jeff Cohen:

out that's that's pretty cool. The other one interesting connection here. I know that

Jeff Cohen:

the executive that went over from Coca Cola to Zynga to actually be their head of like blockchain

Jeff Cohen:

gaming kind of meta verses are actually came from Coca Cola. I believe his name is Matt Wolf. So I

Jeff Cohen:

wonder if he, you know, had any hand in this before he kind of left Thursday. about maybe a few

Jeff Cohen:

months ago. It's just an interesting tidbit.

Paul Dawalibi:

What do you think is the benefit of the metaverse launch? Before the physical launch?

Paul Dawalibi:

Do you think this is pure? I mean, obviously, it's marketing, right? Like, that was the strategy. We

Paul Dawalibi:

they want to reach a very specific audience or demographic. And, you know, the metaverse slash

Paul Dawalibi:

fortnight audience, probably they felt was the right fit for this product. I mean, that seems,

Paul Dawalibi:

right.

Jeff Cohen:

I think yeah, I think you sort of hit the nail on the head there. It's you're trying to

Jeff Cohen:

hit a target demographic, and you need to meet them where they are and where they are is in

Jeff Cohen:

Metaverse in gaming in games. So it makes a lot of sense, right? It's gonna build up a little bit of

Jeff Cohen:

hype, I think, because it's a little bit unique in the sense of digital to physical, I think you'll

Jeff Cohen:

have people kids kind of buzzing about this a bit. And then they'll all try it when it comes out, you

Jeff Cohen:

know, will end up being a one hit wonder kind of thing where it's a they try it once and then they

Jeff Cohen:

never try it again. Or do they actually like it stick around that obviously remains to be seen.

Jeff Cohen:

But I think this will do very well. Actually.

Paul Dawalibi:

I agree. There's a there's like a concept here that I think so many people or brands

Paul Dawalibi:

miss and this is more of a personal anecdote, but as a longtime gamer, I could probably make a list

Paul Dawalibi:

of 100 things I wish I could have from the digital worlds transported into the physical real world,

Paul Dawalibi:

right? Like, there's probably 100 things that I would I would kill to have, and maybe not all

Paul Dawalibi:

drinks but you know things in games items and games things that have meaning because we I played

Paul Dawalibi:

the game and I use game and Metaverse quite interchangeably here because that's really how

Paul Dawalibi:

they're using it with fortnight one last thing on this I thought was interesting is it said epic was

Paul Dawalibi:

not really involved in the activation Which to me that that feels like a step forward. It's sort of

Paul Dawalibi:

glossed over in the article but it's it says specifically Coca Cola stresses this was a

Paul Dawalibi:

creative build done without official sponsorship from Epic or fortnight and I think that's kind of

Paul Dawalibi:

cool right if the platforms are now sufficiently open sufficiently easy enough for you know a

Paul Dawalibi:

totally call it non endemic brand like Coca Cola to go in and and build something and obviously

Paul Dawalibi:

they did it with an agency I'm guessing or something like that, but they built something on a

Paul Dawalibi:

platform that without any support essentially from Epic or fortnight directly.

Jeff Cohen:

That's actually an incredibly good point. I didn't catch that when I read the article

Jeff Cohen:

because I now that you mentioned that probably is the most important or most interesting thing about

Jeff Cohen:

this entire activation and it is it's a bit odd that they wouldn't have you know, Coca Cola is a

Jeff Cohen:

big brand Yeah, maybe they just didn't want to pay epic but how did they even get it in the game that

Jeff Cohen:

is just in creative mode where anyone can kind of create something

Paul Dawalibi:

I suspect that's what they did yeah, it says it's a custom Island

Jeff Cohen:

built yet anything in otherwise right like not in the main game

Paul Dawalibi:

right obviously not but in created it says it was a custom Island built in fortnight

Paul Dawalibi:

creative. So look, I think it's cool. I'm not even a huge fortnight player, but I can't wait to try

Paul Dawalibi:

this you know, this pixel flavored cola and I feel like this is one you buy and leave on the

Paul Dawalibi:

bookshelf behind you sort of as a as a souvenir as a collectible also.

Jeff Cohen:

So the question is before we move on, now do you think that they will do this in other

Jeff Cohen:

meta versus slash should they like if they're putting it in fortnight, your question not that

Jeff Cohen:

hard to probably also put a Coca Cola mode in the same thing in Roblox in decentraland, and sandbox,

Jeff Cohen:

whichever other Metaverse is you want to say? Why wouldn't they do that?

Paul Dawalibi:

I think the I think to your first comment, which I think was spot on it the the

Paul Dawalibi:

target demographic has to fit here. And fortnight feels sort of right Roblox I feel they may have

Paul Dawalibi:

come under the gun of like selling sugary drinks to like minors kind of thing because Roblox has

Paul Dawalibi:

this perception of being younger sandbox and decentraland I just don't think are large enough

Paul Dawalibi:

audiences for Coca Cola to care right that's part of the problem if you're Coke you need you need a

Paul Dawalibi:

massive audience to move the needle cuz selling you know 1000 more cans of Coke doesn't doesn't do

Paul Dawalibi:

anything so fortnight feels like it was spot on in terms of the choice both in terms of demographic

Paul Dawalibi:

and perception and size and all those good things so no, I don't think they need to do anything

Paul Dawalibi:

beyond this. I think this is a good sort of tip like a toes in the water kind of activation let's

Paul Dawalibi:

move on. Because Jeff we have a lot to get to here and I at least two there's two stories here that I

Paul Dawalibi:

want to talk about back to back because I think they are definitely related. And the first one the

Paul Dawalibi:

headline here is Ubisoft ends, Ghost Recon breakpoint updates working on NF T's for other

Paul Dawalibi:

titles. So Ubisoft no longer making contents for content for Ghost Recon breakpoint, including the

Paul Dawalibi:

NF T's. What they're saying is the servers for breakpoint and wild lands will continue to be

Paul Dawalibi:

maintained. But there's no more updates to the game. When Ubisoft was asked whether this includes

Paul Dawalibi:

the game's NF T's, they received a screenshot from the Ubisoft courts website, confirming this to be

Paul Dawalibi:

the case. So any players who claimed their first digit, which is Ubisoft term for an NFT, they say,

Paul Dawalibi:

Ubisoft says you own a piece of the game and have left your mark in history, even though we could

Paul Dawalibi:

argue I think the argument here is going to be what use is that NFT now that the game basically

Paul Dawalibi:

is is shut down, now, it hasn't shut down completely, you know, they're still gonna maintain

Paul Dawalibi:

the servers, a game that has shut down completely is f1 delta time. So this is the second story that

Paul Dawalibi:

I want to put these back to back. And the headline here is owners left with worthless NF T's after f1

Paul Dawalibi:

delta time racing game shuts down. So this is a game that was released in 2019. It was played earn

Paul Dawalibi:

theory and based NF T's and you paid for these NF T's there was things like tires, cars, helmets,

Paul Dawalibi:

etc. And, and all of these items now, essentially, I assume will be worthless because the game won't

Paul Dawalibi:

exist to use them in. That's that's the question I have for you here. Jeff, what happens to these

Paul Dawalibi:

ecosystems to these games played earn? Or in the case of Ubisoft not played earn? Right? This was

Paul Dawalibi:

just, you could get your end game items as NF T's essentially what happens when these games shut

Paul Dawalibi:

down? And what do you make of these two stories? Like, should we be ringing alarm bells? Or is this

Paul Dawalibi:

is this nothing burger kind of story?

Jeff Cohen:

I think I think it's definitely on the scale, you know, closer towards bringing alarm

Jeff Cohen:

bells. The only reason why I'd say maybe it's not a five alarm fire is almost because it was so

Jeff Cohen:

obvious that this was going to happen. Like the the sort of NFT aiders predicted this like very

Jeff Cohen:

clearly, you know, very early on because without true interoperability, where it's like, Hey, I

Jeff Cohen:

haven't gone and Ghost Recon Bay Point, that game shuts down, I just bring it to Call of Duty or I

Jeff Cohen:

bring it the battlefield or fortnight or whatever. Without that, which we're still a ways away from

Jeff Cohen:

that clearly. All you are still at the mercy of a publisher, when they shut down a game. Yes, you

Jeff Cohen:

still technically own NFT of the asset. But that asset is effectively worthless, because no one

Jeff Cohen:

would buy it because it's, again, not playable. Obviously, the negotiators are frequent, you know,

Jeff Cohen:

one there is still a playable game, they're just not having updates. So it's effectively a Dead

Jeff Cohen:

game. The other one is even more surprising, because that one is completely getting shut down.

Jeff Cohen:

And I do think it's interesting as an aside that they were they lost the license to f1. Pretty wild

Jeff Cohen:

considering Animoca brands, who's the publisher is a massive, you know, mega company in terms of

Jeff Cohen:

this, this space, like it's a little surprising that they weren't able to kind of pay up and keep

Jeff Cohen:

the license or what you make of that.

Paul Dawalibi:

I mean, I don't know if that part's surprising, because I'm sure the license is very

Paul Dawalibi:

expensive. And almost all these played are in games, even anything Animoca. Like they're still

Paul Dawalibi:

relatively niche, right? They're not, these are not massive games. In terms of player base. You

Paul Dawalibi:

know, I like your point on in some ways, this proves the point that I've been making, which is

Paul Dawalibi:

whether you call it played or earn played or any of these things, unless you have the play part.

Paul Dawalibi:

The second part doesn't doesn't matter, right. On the future of money podcast, which I talked about

Paul Dawalibi:

the beginning that I was on this week, I got asked what I felt about sort of played to earn models

Paul Dawalibi:

and things like that, and you guys on this podcast and heard my opinions on that. But unless the

Paul Dawalibi:

ownership breaks down the wall, the walled gardens of the publishers, to your point, what's the value

Paul Dawalibi:

add to the gamer? Is there any? Right? If portability is not, is not part of it? Then all of

Paul Dawalibi:

this is superfluous that doesn't, you know, makes no, there's no added value to the gamer. The

Paul Dawalibi:

question I have for you is will situations like this turn people off from these models? Or NF T's

Paul Dawalibi:

and games in general? Will it turn off gamers who will now reject everything because they think, you

Paul Dawalibi:

know, it doesn't matter? Or will the stories make gamers stop and think, Hmm, the publishers have

Paul Dawalibi:

way too much power. We need to challenge the walled gardens, right because now the walled

Paul Dawalibi:

gardens are that much more obvious in situations like this, where you own a feel you own something,

Paul Dawalibi:

and then shutting down the game makes that item you own worthless all of a sudden.

Jeff Cohen:

So what I hope happens is that it pushes the speculators out of the market. Like, I

Jeff Cohen:

don't know if it's going to change the opinions of gamers, because gamers would get upset, like,

Jeff Cohen:

let's say, you play Ghost Recon breakpoint, you're actually enjoying it. And they stopped putting out

Jeff Cohen:

updates. Granted, there stopped putting out updates, because not many people were playing, and

Jeff Cohen:

it was kind of a dead game to begin with. But there's probably, you know, 510 1000 people out

Jeff Cohen:

there that are like, kind of upset, maybe maybe less than that maybe there's 1000 people out there

Jeff Cohen:

that really make this game and there, it's that it's getting, you know, shut down. So you're

Jeff Cohen:

gonna, you were kind of going to have that anyway, what I think it might take out a little bit is the

Jeff Cohen:

speculative mania, where people were not even playing the game, just buying these assets to play

Jeff Cohen:

the metagame sort of to essentially gamble to invest, if you will, in these assets. Maybe that

Jeff Cohen:

takes that out. I think if there's a fun game, and that has NF T's, it can, it can make the game

Jeff Cohen:

better. And I think does this is that was sort of your point, it has to start with it being a fun

Jeff Cohen:

game, or it's like I would have bought this asset anyway, even if it wasn't NFT. And the fact that

Jeff Cohen:

it's an NFT, maybe makes it slightly better, because I could trade it at some point, if I want

Jeff Cohen:

is we option out. But anything other than that is just speculation. So I love

Paul Dawalibi:

the insight on the speculators. But I want to come back to the original question I

Paul Dawalibi:

had, which is if you're a gamer, right? For the last 10 years, you have sort of accepted the fact

Paul Dawalibi:

that if I buy a skin in fortnight, I can't take it outside of fortnight and fortnight shuts down the

Paul Dawalibi:

$10 I paid for the skin goes away. Right. And everyone has accepted that, then there's, you

Paul Dawalibi:

haven't really heard a lot of complaints. It's just the nature of games in the gaming industry.

Paul Dawalibi:

And no one has complained by making these items, NF T's and allowing gamers to feel like they own

Paul Dawalibi:

something, which is the big sort of selling point of NF T's right now you own it. Do you think we

Paul Dawalibi:

will get more backlash in these situations? Do you think, again, the gamers will, will take that

Paul Dawalibi:

feeling of ownership and, and use it as a you know, like to go against the publishers

Paul Dawalibi:

essentially, right? Because now they feel like they own something. Whereas before I just bought

Paul Dawalibi:

this thing in game.

Jeff Cohen:

I think they absolutely, you know, you absolutely will see that, you know, as this

Jeff Cohen:

mindset gets kind of built out a bit more where it's like, Hey, I own this asset while you shut

Jeff Cohen:

down the game, but I own it, like you can't shut downs, it will feel a lot more of collective

Jeff Cohen:

ownership of a game by the community. And I think that's one of maybe the benefits of web three. You

Jeff Cohen:

know, but I still think we're sort of a long a long ways away from that. And even if that that

Jeff Cohen:

mindset is becoming the case, then what are they going to do you sort of said they'll accept less

Jeff Cohen:

from public but what would that even mean? Like they just stopped buying games that aren't web

Jeff Cohen:

three? Maybe that's the case but the game again the games have to be fun, like no one's gonna be

Jeff Cohen:

like well, I was gonna play Call of Duty but I don't own my assets. So I'm gonna go play like

Jeff Cohen:

some crappy web three game pretending

Paul Dawalibi:

I guess deep down my hope is that by taking away something that maybe now you feel

Paul Dawalibi:

you own more than you used to, gamers may start to put pressure on the developers to open the walled

Paul Dawalibi:

gardens to allow for portability of assets now how that happens like you're right like the how that

Paul Dawalibi:

actually happens. Your is complicated because will someone just stop buying Call of Duty if they

Paul Dawalibi:

don't allow you to take your the skin you bought their over to the next Rainbow Six game? Probably

Paul Dawalibi:

not. But I feel like we may at least hear chatter about it. And people may get vocal about it, if

Paul Dawalibi:

nothing else now, will that cause any real change? Probably not. But something has to break the

Paul Dawalibi:

walled gardens for NF T's and games to make sense. Something does

Jeff Cohen:

need to be fair, like, you know, a lot of the pushback from loot boxes, you know,

Jeff Cohen:

actually did work in many games have gotten rid of loot boxes, and I would say that is a direct

Jeff Cohen:

result of kind of the community backlash. So over time, with enough momentum, like gamers, voices

Jeff Cohen:

will sort of be heard the problem is right now gamers hate NFT. So, you know, on the side of NF

Jeff Cohen:

T's maybe not in the near term.

Paul Dawalibi:

Let's let's talk about another game and game development studio man you know, making

Paul Dawalibi:

play darn games. So this one we actually touched on last week and the big xe infinity hack $650

Paul Dawalibi:

million dollar theft, basically on x infinity, but this story about sky Mavis, the parent company

Paul Dawalibi:

vaccine Finiti. Sky Mavis raises $150 million led by binance funds to be restored On the ronin

Paul Dawalibi:

bridge, so this is, you know, x infinity is announcing that they raised $150 million led by

Paul Dawalibi:

binance participation from big names, obviously Animoca brands, and recent Horowitz, dialectic

Paul Dawalibi:

paradigm. It says the round combined with Skye Mavis balance sheet funds will be used to ensure

Paul Dawalibi:

that all users affected by that hack that we talked about last week will be reimbursed. So

Paul Dawalibi:

they're going to make everyone whole supposedly. And they're saying their network will reopen once

Paul Dawalibi:

it's once it's undergone a security upgrade, and several audit audits which can take several weeks,

Paul Dawalibi:

and they're implementing rigorous internal security measures to prevent future attacks. So

Paul Dawalibi:

they're raising, they raised 150 million here, Jeff, and to cover a $650 million hole or $600

Paul Dawalibi:

million hole, whatever it was. So it means I guess there's a lot of money coming from the balance

Paul Dawalibi:

sheet here. Are you surprised by this? Like, what do you make of this financing, to basically cover

Paul Dawalibi:

losses from a hack?

Jeff Cohen:

I mean, it was an expensive, expensive mistake. I noticed they also didn't put any

Jeff Cohen:

valuation on the raise, I wonder if it was at the same as the last round? Or if they had to do you

Jeff Cohen:

know down round? Regardless, it's an expensive, inexpensive error. I will say good on them for you

Jeff Cohen:

know, I don't know if they had a choice, but they you know, the fact that they're reimbursing

Jeff Cohen:

everyone, I think this will probably help community sentiment to some extent. But it'll be

Jeff Cohen:

interesting to watch kind of how the I haven't looked at how the token price has reacted.

Jeff Cohen:

Because, you know, the funny thing about the play to earn games is that the price of the token

Jeff Cohen:

really impacts the amount of money you can make, which impacts the player base. So it almost, you

Jeff Cohen:

know, it can either be a virtuous cycle or death spiral, depending on that price of the token, the

Jeff Cohen:

price of the token is depressed, your earnings are lower. And if that's the reason why you're playing

Jeff Cohen:

the game, not because it's fun. Well, you don't have as much incentive to play the game. So that's

Jeff Cohen:

something to keep an eye on. But But yeah, to get back to this, I thought, you know, I read through

Jeff Cohen:

this, I think they did a pretty good job acknowledging, I think at one point in there, they

Jeff Cohen:

said, you know, in their efforts to move fast to get to the main screen and kind of build scale,

Jeff Cohen:

they may have cut some corners around security, which is a little bit of like a maybe too honest,

Jeff Cohen:

but I appreciate I did appreciate like that they were coming out with that. And, you know, at the

Jeff Cohen:

end of the day, they are startup despite the fact that they've raised a ton of money and whatnot.

Jeff Cohen:

They're not that old that it's, you know, hypergrowth type of company. So these things do

Jeff Cohen:

happen. But yeah, I thought that was interesting. Another thing that they talked about here at the

Jeff Cohen:

bottom, and the writing is really small. So maybe you could read some of these things. They they put

Jeff Cohen:

out some some pretty interesting little tidbits in this in this kind of financing note.

Paul Dawalibi:

Yeah, they say they have 2.2 million monthly active players, it's the axes the

Paul Dawalibi:

most played NFT game of all time. They've processed 10 times more all time volume than the

Paul Dawalibi:

second largest NF T game. There are 2.6 million people that own axes, which is four times more

Paul Dawalibi:

than the next largest NFT project, which is NBA Top Shot, and the ronin wallet has been downloaded

Paul Dawalibi:

3 million times. So you know, yeah, it's interesting numbers, and they're way bigger than

Paul Dawalibi:

the next best thing call it. But they're still relatively small. I mean, on a daily basis, more

Paul Dawalibi:

people log into a 15 year old game and World of Warcraft than play xe infinity. Like, we're still

Paul Dawalibi:

talking about really quite small numbers. If I'm an investor, and I'm filling the $650 million

Paul Dawalibi:

hole, I mean, now. Now the exit has to be that much bigger. Because I've committed even more

Paul Dawalibi:

capital to this. I'm curious if you think investors will ever see. I mean, early investors

Paul Dawalibi:

obviously have probably already seen a massive return on this. But what are the long term

Paul Dawalibi:

prospects look like for xe infinity in your mind or sky Mavis in light of you know, all this

Paul Dawalibi:

capital going to fill this hole?

Jeff Cohen:

So I think it's important probably to maybe differentiate sky Mavis from xe infinity

Jeff Cohen:

obviously, Sky Mavis is the company that owns x infinity the game I'm fairly bearish on actually

Jeff Cohen:

infinity the game like I, you know, I do not think that they will see a massive return on that

Jeff Cohen:

specifically, and I'm sure that's not entirely worthy investors are, are kind of pinning their

Jeff Cohen:

hopes. I think the you know, the big hope is around kind of this road and wallet, this road and

Jeff Cohen:

bridge, sort of their side chain, if you will, not to get too deep into the crypto but, you know, and

Jeff Cohen:

I know we talked about this a little bit on the last podcast, I think that's kind of the picks and

Jeff Cohen:

shovels play where they're expecting people to use that wallet, other games to kind of enable to be

Jeff Cohen:

unable to use that wallet, which is why the hack in and of itself was so problematic, because, you

Jeff Cohen:

know, it kind of highlights, you know, the negative security aspects of that of that chain

Jeff Cohen:

that was sort of supposed to be a big, big part of that. investment thesis. The jury's definitely

Jeff Cohen:

still out on xe, I know they're they're coming out with kind of like a free to play version of the

Jeff Cohen:

game hoping to make the economy a bit less Ponzi ish. So we'll see once that comes out, we'll see

Jeff Cohen:

whether this can really kind of grow from 2 million da may use to, you know, 20 or 30 million,

Jeff Cohen:

which they really wouldn't need to to be kind of sustainable billion dollar franchise.

Paul Dawalibi:

Yeah, I just think with this misstep, the relatively small player base numbers,

Paul Dawalibi:

the fact that most of it's not in North America, right, you you tend to find the LAX infinity

Paul Dawalibi:

players in a lot of third world or developing countries. You know, the the fact that I don't

Paul Dawalibi:

think I've ever heard anyone say the game's really fun. I'm quite bearish on x infinity and even

Paul Dawalibi:

more. So now that I've like 100 seen $150 million raise just to reimburse, you know, people for this

Paul Dawalibi:

hack. I just don't see how xe infinity survives long term or it'll remain sort of niche long term.

Paul Dawalibi:

So I'm quite bearish on that. Let's there's a related story here, which I think is worth

Paul Dawalibi:

discussing, because it sort of ties into those last numbers we talked about at the end. And this

Paul Dawalibi:

was an article from coin desk, and I thought was interesting. And you had flagged it here, Jeff.

Paul Dawalibi:

The headline Metaverse major struggle as user base falls short of market expectations decentraland x

Paul Dawalibi:

infinity in the sandbox have larger valuations and fewer active users than non blockchain games. The

Paul Dawalibi:

the article actually goes in into some pretty good detail. And what it says is, in the past 30 days,

Paul Dawalibi:

number of xe infinities average daily users has dropped 30% from the previous period to about

Paul Dawalibi:

107,240. That's their average daily user Sandbox has fallen 29% to 1180. And decentraland, has lost

Paul Dawalibi:

15% to 978 users a day, on average. I was shocked at these numbers. Because if any of these were

Paul Dawalibi:

games on Steam, and you know, they mentioned this in the article, no one would ever be talking about

Paul Dawalibi:

them. Literally no one like there. There are games made by one guy in his dog, you know, in a few

Paul Dawalibi:

weeks that probably have larger player bases than some of these platforms. Maybe the decentraland

Paul Dawalibi:

and sandbox ones were the most surprising. What do you think is the crux of the the issue here with

Paul Dawalibi:

the daily active users? Like what? Why are they not seeing growth? They're given all the hype?

Jeff Cohen:

I mean, I think it gets into some of the stuff we talked about last week, when we were

Jeff Cohen:

discussing the fashion show, you know, in decentraland, where it just doesn't look that fun.

Jeff Cohen:

The world is not very populated. It's not, you know, HD graphics. It's a bad experience. It's

Jeff Cohen:

kind of buggy. Like, the question is whether that will remain the case? Or do we start getting

Jeff Cohen:

really, you know, to more of like Grand Theft Auto style, like meta versus where at least the

Jeff Cohen:

graphics are good, and it plays well. But yeah, I mean, it just shows when you it's almost like an

Jeff Cohen:

incredible to see the market cap of these coins fully diluted versus the player base, like you

Jeff Cohen:

pointed out less than 1000 people a day, that's probably

Paul Dawalibi:

get more attention than decentraland that sandbox combined.

Jeff Cohen:

It's mind blowing good for them forgetting you know, they've sort of captured this

Jeff Cohen:

site marketing Zeitgeist The fact that we're even talking about it like, it's insane how well the

Jeff Cohen:

numbers are. It all comes

Paul Dawalibi:

back to. And again, I feel like so much of the industry misses this. The core of the

Paul Dawalibi:

metaverse has to be gaming. It has to be it has to the origin the foundation has to be gaming has to

Paul Dawalibi:

be games and fun games. And people have to have a reason to go play them and spend their leisure

Paul Dawalibi:

time there. Like meta verses will never exist if there's no purpose to being in the metaverse

Paul Dawalibi:

Right. And, and I think this has always been the struggle of a decentraland or a sandbox, which is,

Paul Dawalibi:

why am I there? And why should I go there? What is there to do there? Right with World of Warcraft, I

Paul Dawalibi:

can tell you exactly what there is to do and why you should go do it and why it's enjoyable. With

Paul Dawalibi:

Grand Theft Auto, um, Grand Theft Auto numbers would would put all of these to shame, right? And

Paul Dawalibi:

I could argue that's way more of a Metaverse than decentraland is you have user generated content.

Paul Dawalibi:

You have entire economies and ecosystems you have, you know, people with real avatars that they care

Paul Dawalibi:

about. All these elements exist in games already. I'm not sure we needed to reinvent them. We I

Paul Dawalibi:

think we needed to grow on top of them. Or at least mimic them because that's not what

Paul Dawalibi:

decentraland and sandbox are doing. They're not sound like they said, Wow, that's a great game.

Paul Dawalibi:

Let's go make a great game but allow it to be so much bigger and more open. And so this kind of

Paul Dawalibi:

proves. I don't know. I don't know what I don't think we will be talking about those plot these

Paul Dawalibi:

platforms in the next five years. I really don't think the metal the metaverse, capital T capital M

Paul Dawalibi:

or any Metaverse is the good ones. The successful ones are going to grow out of games and we're

Paul Dawalibi:

already seeing it with fortnight with Roblox, right maybe Minecraft to a lesser extent. We're

Paul Dawalibi:

already seeing these grow out of games. I'm not sure they found the killer app for their

Paul Dawalibi:

platforms. Maybe they will. I don't know if you have thoughts on that. Do you think they find a

Paul Dawalibi:

killer app that reverses this?

Jeff Cohen:

It would have to be a fun game. Like you said. I mean, you know, some of the stuff was

Jeff Cohen:

like, one off events like fashion shows stuff like that, like movie premieres, concerts. They could

Jeff Cohen:

do it but other meta verses are doing it better because the people are there like a concert in

Jeff Cohen:

fortnight is gonna get much better attendance than a concert in decentraland or sandbox. So they'll

Jeff Cohen:

see little spikes but yeah, I don't know. I agree with you. I think right now I'd have to say I lean

Jeff Cohen:

bearish to very bearish on these these sorts of Metaverse, platforms that seem to be just almost

Jeff Cohen:

like marketing wrapped up in a different, you know, bow like it just not just to be clear,

Paul Dawalibi:

not bearish on Metaverse at all. I'm just saying where what the origins need to

Paul Dawalibi:

where it needs to start from to achieve massive scale doesn't feel like one of these platforms.

Paul Dawalibi:

Yeah. Jeff, that that wraps up this week's podcast. I mean, we we flew through those stories

Paul Dawalibi:

of time always flies. Thank you. Of course. As always, thank you guys, for tuning in every week.

Paul Dawalibi:

Just a reminder, make sure you follow subscribe the metal business podcast. Go check out that

Paul Dawalibi:

future of money podcast I was on this week. Make sure you follow and subscribe to our sister

Paul Dawalibi:

podcast the metal woman podcast which is all about gaming and Metaverse, but highlighting women in

Paul Dawalibi:

the space and some of the really amazing things they're doing. And this this drops every single

Paul Dawalibi:

week guy so let us know how you're loving the podcast. Let us know anything you want to see

Paul Dawalibi:

different. Any suggestions for new stories, make sure you're sending them to us. Make sure to

Paul Dawalibi:

follow Jeff juice on Twitter Jeff Cohen 23. And don't forget guys, the future is fun. We'll see

Paul Dawalibi:

you next week.

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