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Weekly News #159: Xbox Game Pass Miss, Chipotle & EDC Roblox, FaZe SPAC, Mixer Failure, Movie Theater Esports, Tencent Metaverse, Sony Patents, GameStop Web3
Episode 15929th October 2021 • Business of Esports • Paul Dawalibi
00:00:00 01:32:33

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In the latest weekly news and podcast after-show (sponsored by YouGov), we discuss Xbox Game Pass missing its target, a virtual Chipotle and EDC coming to the Roblox metaverse, FaZe Clan securing a $1 billion public valuation, Ninja explaining why Mixer failed, the League of Legends World Championship being broadcast in European movie theaters, Tencent launching a game studio to enter the metaverse, Sony patenting technology that will change the way we stream, GameStop getting involved in the Web3 gaming space, and so much more!

Transcripts

Paul Dawalibi:

From the keyboard to the boardroom, this is the business of esports.

Paul Dawalibi:

As the profit of esports I rely on trustworthy and meaningful data every day. Data from a research

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partner YouGov offers the most complete view of esports fans and gamers in the world, providing

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context to who they are, what they think the brands they buy, and things they do. You guvs

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connected insights and Research Services informed strategy at every level. If you're a team, a

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brand, agency or rights holder, you should be talking with you gov. Their partners measure and

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maximize ROI and are telling compelling stories with data visit you

Paul Dawalibi:

gov.com/gaming-esportstolearnmorefromthekeyboardtotheboardroomthisisthebusinessofesportsweeklynewsshowiamyourhostpauldawalibiand I'm joined today by my friends and CO hosts

Paul Dawalibi:

Lindsey the boss POS Jeff the juice CO and Jimmy burrata and Jimmy Mondal. For those of you who are

Paul Dawalibi:

new to the weekly news show welcome. What we do here is we cover the most pressing gaming and

Paul Dawalibi:

esports topics and news of the week. We look at everything through a business and C suite lens, we

Paul Dawalibi:

dissect, we analyze the business implications of everything happening in the industry. And the best

Paul Dawalibi:

part about this live stream is we get to do it live with you guys. You get to ask questions,

Paul Dawalibi:

challenge us get in our faces, all the things that make this live show that much more fun and

Paul Dawalibi:

interesting. And I know so many of you are lurking in and watching without saying anything. You're

Paul Dawalibi:

welcome to do so. But we encourage you guys to get involved. Encourage you to ask questions. It makes

Paul Dawalibi:

it so much more fun. How is everyone doing this week? Lindsay, you first? You're muted.

Lindsay Poss:

I know. Sorry. I'm doing so well. Recovering from our past weekend spent in Austin

Lindsay Poss:

and in Vegas. It's been a lot of fun. Yeah, today was a good good lazy day.

Paul Dawalibi:

I don't know if I can say the same about lazy day. But it is interesting to be back.

Paul Dawalibi:

Jeff, you look you look not tanned. What's going on?

Jeff Cohen:

I know as the lighting somehow i i You know, spent the weekend in Austin. So I was out in

Jeff Cohen:

the sun as you're well aware. I'm good. This is better than last week. Last week, I was stuck in

Jeff Cohen:

the chat comments, you know, like like the rest of our viewers and was furiously typing away. Because

Jeff Cohen:

I had so many things I wanted to say and talk about. So I'm glad to be back here on in the

Jeff Cohen:

booth.

Paul Dawalibi:

I'm curious for everyone who was at esports Business Summit last week, and we were at

Paul Dawalibi:

the f1 race in Austin over the weekend. Any big gaming takeaways. Let's start with that any

Paul Dawalibi:

industry takeaways for you guys?

Jeff Cohen:

From the f1 race?

Paul Dawalibi:

Well, look, there were a lot. I mean, there were a lot first of all, a lot of

Paul Dawalibi:

streamers at that race. So we know, we we connected with s fan and alinity who were

Paul Dawalibi:

streaming from, from the race. We didn't meet up with courage JD who courage was at the race. Also,

Paul Dawalibi:

he posted that he was there. And they had an entire f1 esports activation, which we did. We

Paul Dawalibi:

took a bit of footage and will probably publish it somewhere on one of our you know, social accounts

Paul Dawalibi:

in some capacity. But they had a whole activation there, right people racing in full blown sim

Paul Dawalibi:

setups with fan attack gear and you know, the full blown racing seats and everything right, like it

Paul Dawalibi:

was a proper sim rigs setup. And people racing that No. So there were definitely like, elements

Paul Dawalibi:

of gaming and esports at the race that I had not seen, really anywhere else. Curious if you guys

Paul Dawalibi:

have any takeaways from all this?

Jeff Cohen:

I'll give one takeaway. That's not exactly that. But I think just the experience of

Jeff Cohen:

f1 and how much it's grown. I mean, I saw I think it was something like 400,000 people were at the

Jeff Cohen:

race this year versus something like 200,000 in 2019. So basically doubled in two years, I think

Jeff Cohen:

largely due to the power of the Netflix show and kind of the creation of that content and the

Jeff Cohen:

phenomenon that Netflix and really a well tailored content And story plot around a sport can can do.

Jeff Cohen:

And that just leads me to think of maybe what some esports are doing well, some esports are not doing

Jeff Cohen:

actually most are not really doing that. Well. And we've had this conversation in the past about kind

Jeff Cohen:

of like, should the should he be esports? Who more like the WWE? You know, that's not a perfect

Jeff Cohen:

example with with with f1. But I think just creating more narrative and just doing content

Jeff Cohen:

really well is something that esports should do well, but I don't think a lot of the league's

Jeff Cohen:

particularly some of the league's that we like to talk negatively about a lot have done it. Well so

Jeff Cohen:

far. So that's my

Paul Dawalibi:

my take. I mean, it's a great point, which is, like f1 has exploded in

Paul Dawalibi:

popularity in North America, and geography where it was previously not that popular, right. f1 was

Paul Dawalibi:

much bigger in Europe than it was in North America. And then Netflix makes this show guys

Paul Dawalibi:

survive. And all of a sudden, everyone's an f1 fan, right? Everyone's a Max Verstappen fan.

Paul Dawalibi:

Everyone's a Lando Norris fan. Almost no one's a Lewis Hamilton fan. But, but like, but But you get

Paul Dawalibi:

this phenomenon of like, a ton of new fans coming into the sport. Can esports do this? Or is it just

Paul Dawalibi:

like, do we think that it's something about f1 specifically that allowed for this phenomenon to

Paul Dawalibi:

happen, right? It's, it's big dollars, it's, you know, billions at stake. It's these 20 year old

Paul Dawalibi:

drivers. Like, as I'm saying it I'm going wait a second, like esports sorta has some of the same

Paul Dawalibi:

elements? Is it like can esports Do this? Do you guys I'm curious. The rest of you, do you think

Paul Dawalibi:

esports can have its drive to survive like moment.

Lindsay Poss:

I mean, the reason why I started watching drive to survive and became extremely

Lindsay Poss:

into f1 was all the drama behind it. And drama is something that we've talked about on this show

Lindsay Poss:

before like drama, personalities, interpersonal conflict, kind of like building up that team

Lindsay Poss:

rivalry, that individual rivalry, all of that stuff. And that kind of backstory is lacking in a

Lindsay Poss:

lot of esports spaces. So I think if if there's some way to bring that to light or to create that,

Lindsay Poss:

or to show what's happening behind the scenes like that, then yeah, I totally think it could have a

Lindsay Poss:

similar moment to f1.

Jimmy Mondal:

Exactly. And I think like esports has had a series of smaller, not necessarily as

Jimmy Mondal:

big as I find. I remember when seven days out premiered on Netflix, that was a huge, because it

Jimmy Mondal:

had one about following a CLG I believe and double lives team right after, you know, he a huge

Jimmy Mondal:

tragedy, it struck his family and they were entering like worlds playoffs or something like

Jimmy Mondal:

that. And I remember a huge influx of fans coming into the scene, but not to the scale of the f1

Jimmy Mondal:

series. But I totally I totally think it can because exactly, it has all the same elements, it

Jimmy Mondal:

has all the same big money behind it. It's just a matter of now finding the correct personalities to

Jimmy Mondal:

center around on the right game, really. And I think that's really like League of Legends is like

Jimmy Mondal:

a tad too hard to understand for the normal person I believe. And so that's why I think like even

Jimmy Mondal:

though that episode was really good, and brought a lot of people into the space, people were also

Jimmy Mondal:

like, that's fucking hard, man. That's complicated. Like, I'm gonna stay away from that.

Jimmy Mondal:

But that was a good episode of that show, you know. So like, one one step lower, maybe like a

Jimmy Mondal:

Call of Duty or something or like something Counter Strike related, something a little more

Jimmy Mondal:

easy to understand. And I think we're gonna have that watershed moment.

Lindsay Poss:

Oh, I? Oh, I was just gonna say really quick. I totally disagree with that in the

Lindsay Poss:

context of f1. Because that's a super complicated sport. And it like, Well,

Jimmy Mondal:

ultimately, it's racing. And it's who you know, there's places you finish and

Lindsay Poss:

League of Legends as a team battle.

Jimmy Mondal:

But I feel like even that concept is more far fetched than at race. You know what I

Jimmy Mondal:

mean? I think at its base level, because f1 is obviously very complicated with like, you know,

Jimmy Mondal:

you can go so far in depth, but at its base, I think it's still a lot simpler than League of

Jimmy Mondal:

Legends, but maybe it's because I'm so in depth and like so intertwined into it already, and I

Jimmy Mondal:

wouldn't be able to tell.

Paul Dawalibi:

Let me just read the Bruno's comments here. BRUNO says, Hi, guys. Listen, I was

Paul Dawalibi:

to the podcast. First time catching the live show. Great to be here. Bruno, great to have you. And

Paul Dawalibi:

thank you for listening to the podcast. I hope you'll have fun here. Bruna says f1 really tried

Paul Dawalibi:

to adapt its rules to make the races more interesting as well. For a few years. The races

Paul Dawalibi:

were very boring. No. overtakes best car would win all races. I mean, Bruno, your points a good one.

Paul Dawalibi:

To be fair, nothing f1 has done has solved any of those problems. Overtaking is still really hard.

Paul Dawalibi:

DRS has helped a little bit and the best car still does win basically all the races. So I mean,

Paul Dawalibi:

there's a reason Hamilton has seven champion drivers championships. It's not not because he was

Paul Dawalibi:

in the worst Car. However, they are they are making efforts. And we'll see next year if that

Paul Dawalibi:

some of the bigger efforts to to increase overtaking do pay off because they are making the

Paul Dawalibi:

biggest changes ever, basically in the last decade. Next year. So we'll see, we'll see if that

Paul Dawalibi:

does pay off. Having said that, I just want to come back to the esports. Thing. To me. esports

Paul Dawalibi:

has always been to clinical. And I think that's part of the problem, because when you're so

Paul Dawalibi:

clinical, you don't get the drama, right. There's just, there's not nearly enough trash talking.

Paul Dawalibi:

There's not nearly enough sort of teams hiring personalities over sort of talent. And, and I just

Paul Dawalibi:

think the thing f1 Has that esports doesn't and I don't know if esports can solve for this is f1 has

Paul Dawalibi:

drama, because you're talking about a sport where literally anyone with a driver's license

Paul Dawalibi:

technically can do this, right? So with massive accessibility in some, in some ways, yes, you need

Paul Dawalibi:

money to be able to move up the ranks and drive, you know, f1 At some point, but fundamentally,

Paul Dawalibi:

driving is a relatively accessible skill. It's not as accessible as esports. But it's relatively

Paul Dawalibi:

accessible. The fact that you only have 20 drivers, like this is the it's like, imagine the

Paul Dawalibi:

NFL if it was only one team or right like the the amount of pressure it puts on these people, the

Paul Dawalibi:

amount of celebrity it puts on those 20 people the amount of drama, I think it creates, because it's

Paul Dawalibi:

only between 20 people I think elevates all of it. And I don't know how esports solves for that. But

Paul Dawalibi:

I think it is too clinical in some ways and lacks a bit of the character. You know, ahead of you

Paul Dawalibi:

guys, for anyone who watched. I mean Verstappen called Louis like a stupid idiot, right? Like, and

Paul Dawalibi:

this was this was news, this became news, right and gave him the finger in a $12 million Formula

Paul Dawalibi:

One car. Like, I feel like esports could use a little bit of that character to create some of the

Paul Dawalibi:

drama that then creates the storylines. Jimmy you were gonna say something?

Jimmy Baratta:

Yeah.

Paul Dawalibi:

Oh, which Jimmy doesn't matter, either one.

Jimmy Baratta:

Yeah, I mean, I get the comparison. Or like Jimmy Mondal, his point about, I don't

Jimmy Baratta:

know, the ability to understand f1 as just like a fan of watching a race and see us going fast, kind

Jimmy Baratta:

of, I don't want to dumb it down too much. But it kind of reminds me of just like an entry level

Jimmy Baratta:

esports fan understanding Rocket League, because they understand the concept of soccer, right?

Jimmy Baratta:

Totally different esport and traditional sport, very similar fundamentals, or at least like I can

Jimmy Baratta:

grasp, from a beginner perspective, that that entry level understanding, what I was gonna say

Jimmy Baratta:

was, you know, what the Netflix show did for Formula One, in terms of the storytelling in the

Jimmy Baratta:

drama to Lindsay's point, which I also appreciate, I think that's just really compelling

Jimmy Baratta:

storytelling. I think if you have a crew, you know, and you're just capturing a ton of content,

Jimmy Baratta:

at the end of the day, you'll be able to shape that narrative. And I think I told you guys, when

Jimmy Baratta:

I when I, you know, when we were hanging out with each other last week, I really respected Red Bulls

Jimmy Baratta:

ability to take control of that narrative to participate from season one, understanding that

Jimmy Baratta:

this could be big and being like, hey, these guys are telling our story, no matter what. So for

Jimmy Baratta:

involved, and if we give them access, and if we, you know, talk about our company's philosophy, or,

Jimmy Baratta:

you know, you know, our, I don't know, just, you know, about the race or whatever else is going on

Jimmy Baratta:

there, you know, that content is there, and that narrative is there. So, I think esports can

Jimmy Baratta:

capture on a similar strategy, it's really more about creating more content, right? We have so

Jimmy Baratta:

many tournaments, so many sports that are going on so many teams that are involved. What Netflix did

Jimmy Baratta:

was capture that content, and then tell a great story. And so what we you know, we've seen a lot

Jimmy Baratta:

of how to get better at Roblox right, or fortnight, competitions, or teams doing, you know,

Jimmy Baratta:

this and that, what we haven't seen, which, you know, is something that we are doing at holodeck,

Jimmy Baratta:

but that a lot of companies aren't, is that I think that behind the scenes, capturing content

Jimmy Baratta:

around events, or around companies and people and figuring out I think different ways to tell that

Jimmy Baratta:

story that aren't just shoutcasters announcing the tournament, right but that are you know, we don't

Jimmy Baratta:

really focus on the drama, but maybe we should, but yeah, it's kind of my two cents on it.

Paul Dawalibi:

One is, uh, sorry, I'm late. I know you guys are waiting for me wanting every week we

Paul Dawalibi:

wait for you. Wait says drive to survive wasn't on my radar. I'm gonna have to watch it now based on

Paul Dawalibi:

your discussion alone. Wait, it's the best show on Netflix. It's single handedly increased F one's

Paul Dawalibi:

viewership in North America by like 50% I think year over year. So it is unbelievable success.

Paul Dawalibi:

Just a very well done show. Guys, I just want to tease the podcast this week we had Marius Dominika

Paul Dawalibi:

on the podcast, who's an esports lawyer based in Vancouver, Canada, Vancouver, Canada, with Segev

Paul Dawalibi:

LLP had lots of insight into the legal side of gaming, obviously, some of the things he was

Paul Dawalibi:

looking out for. We did cover a couple of stories with him, because I thought there were some

Paul Dawalibi:

interesting legal angles, or at least implications. And I will just share those here two

Paul Dawalibi:

seconds, and if you guys want to get into them happy to, but the first story that we discussed on

Paul Dawalibi:

the podcast with them was sorry, hang on, should have shown the screen. The first one we discussed

Paul Dawalibi:

was this article about guild esports, terminating their FinTech partnership over delays and payment

Paul Dawalibi:

issues. So if you remember, a year ago, they announced a 3.6 million pound deal sponsorship

Paul Dawalibi:

deal, but they never named to the sponsor? Well, as it turns out, we still don't know the name of

Paul Dawalibi:

the sponsor. But this deal is being cancelled because evidently the sponsor didn't pay and never

Paul Dawalibi:

did anything. It seems. So we discussed that and why, for example, guilty sports didn't sue why

Paul Dawalibi:

they're just canceled agreeing to cancel it, why they're not going after the company for that 3.6

Paul Dawalibi:

million pounds. So there was an interesting legal discussion there.

Jeff Cohen:

Why was that? What was the? Well, you

Paul Dawalibi:

have to tune into the podcast to find out

Jeff Cohen:

what was surprising to me. Um, a few lawyers a few weeks late, so I'll be listened to

Jeff Cohen:

that, like on Thanksgiving. The interesting to me, I mean, we do these sports being a public company,

Jeff Cohen:

it's like, Isn't there some risk to them? I mean, announcing a deal and kind of like never getting

Jeff Cohen:

paid and not doing the deal, it sort of opens up a little bit of risk to them, in terms of if there

Jeff Cohen:

was people who bought the stock after, you know, after that was announced, and now I'm sure the

Jeff Cohen:

stock has gotten hurt based on you know, this is a pretty big chunk of their revenue, I would think

Jeff Cohen:

so. Yeah, great,

Paul Dawalibi:

great minds think alike. I also asked that question. So there, we do have that

Paul Dawalibi:

discussion on the podcast.

Jeff Cohen:

Stay tuned, I'll get loan soon. And just to be

Paul Dawalibi:

clear, the stock dropped 10% on this news, which is not insignificant. So. Yeah,

Paul Dawalibi:

it's good. It's good question. And it's, it's interesting also, that this is the last thing we

Paul Dawalibi:

talked about on the podcast, which is, will we ever know the name of this sponsor, this fin tech

Paul Dawalibi:

sponsor, right? Like, will they remain remain anonymous forever? Because in some ways, like, you

Paul Dawalibi:

hopefully don't want them doing more bad deals in the esports space.

Jeff Cohen:

Well, it's interesting, and I don't know, I didn't read the article, and I didn't see

Jeff Cohen:

the filing or anything like that. But the way this is written makes it seem like guilds sort of

Jeff Cohen:

terminated the relationship and you didn't get paid. But I guess the question could be, is it

Jeff Cohen:

possible that guild wasn't delivering what this FinTech company what was agreed upon in the

Jeff Cohen:

contract and thus, that's why the deal was terminated. And that's also why they're not suing

Jeff Cohen:

because they didn't you know, whatever, provide the amount of eyeballs they said they would or the

Jeff Cohen:

acid, you know, there's always two sides to any any divorce.

Paul Dawalibi:

It's possible. That's definitely not the statement that guild made guild made it

Paul Dawalibi:

very clear. They didn't pay. Let me just read Bruno's comments here because we are going to get

Paul Dawalibi:

to this brutal says How about the Faze clan spec news? is the ultimate hoodie or really worth a

Paul Dawalibi:

billion. Bruno, I promise you we are going to get into this today it's it's on the docket for the

Paul Dawalibi:

news we're going to discuss today and we're going to go in depth I think on this one because I think

Paul Dawalibi:

everyone has strong opinions on phase phases spec. One he says hoodie org lol Yes, that is. They are

Paul Dawalibi:

the ultimate hoodie. Org maybe then 100 Thieves, probably the ultimate hoodie. Org. But you know.

Paul Dawalibi:

Let me just tease this one last thing guys, and then we'll get into some new news. The other thing

Paul Dawalibi:

we talked about on the podcast, pokey main launching her own talent management and brand

Paul Dawalibi:

consulting firm called RTS and so had a good discussion on that. I had some very strong

Paul Dawalibi:

feelings on this one, which I encourage everyone to tune into the podcast to hear about I don't

Paul Dawalibi:

know if you guys have any thoughts on this or if you want to get into it if anyone in the chat

Paul Dawalibi:

wants to get into this but we did have a long discussion on this news on the podcast. Now, speak

Paul Dawalibi:

now or forever hold your peace. On he says Starcraft and Warcraft are RTS. Yes, this is true.

Paul Dawalibi:

That is yes, that is your consulting firm.

Jimmy Mondal:

That's the whole point of the brand. real time strategy game like that's that's the

Jimmy Mondal:

whole point, man.

Jeff Cohen:

There's like stress. It's not there like anyone's initials. It's like,

Paul Dawalibi:

there's no I'm pretty sure it's just, it's a play off of realtime strategy.

Jeff Cohen:

That's pretty good.

Paul Dawalibi:

It's a It's a clever name. I think he's pretty good.

Jimmy Mondal:

I think it's pretty good.

Paul Dawalibi:

I think it's a clever name. The name is the most clever part of this announcement.

Paul Dawalibi:

Yeah, also what I think okay, let's, let's move on. Let's do some new news, new news. In other

Paul Dawalibi:

words, news, that's not that we didn't cover on the podcast. And let's start with a bit of a

Paul Dawalibi:

surprising one. I promise guys, we're gonna get to phase. I just, it's, you're gonna have to stay

Paul Dawalibi:

tuned, we got to build. That's it. Right. And this one, this article, I think may surprise people.

Paul Dawalibi:

The headline here, Xbox Game Pass subscriptions, Miss Microsoft's target. What they're saying is,

Paul Dawalibi:

Game Pass, subscriber growth was up 37%. But the company had set a 48% growth goal that's over the

Paul Dawalibi:

last 12 months. And in the company's prior fiscal year, from mid 19, to mid 20, gamepass subs were

Paul Dawalibi:

up 86% exceeding a target of 71. So the most recent figure we have is there, they have 18

Paul Dawalibi:

million subscribers at 10 or $15 a month. But clearly growth is slowing. Right. So they they

Paul Dawalibi:

grew at a 38% rate versus the 48%. Goal. Any thoughts on why gamepass subscriptions may not be

Paul Dawalibi:

hitting Microsoft's own internal targets is is that has it been overhyped? I'm curious what you

Paul Dawalibi:

guys make of this? Should we all be writing off Xbox Game Pass now?

Lindsay Poss:

No, I wonder if it's a function of the supply shortages with the series X two people

Lindsay Poss:

just not being in tune with what Xbox is doing because they're still waiting for a console. I

Lindsay Poss:

like that's a really like minor thing. But I have a feeling that that's contributing at least

Paul Dawalibi:

I see some agreement. And we'll have chat likes.

Jeff Cohen:

That point makes a lot of sense. But I wonder, does it say in the article how their

Jeff Cohen:

hardware sales did because if their hardware hardware was below their expectation that it makes

Jeff Cohen:

perfect sense that, you know, so there they the way you would model it, right, they probably have

Jeff Cohen:

a hardware forecast, and then some sort of, you know, attach rate to that subscriptions. But I

Jeff Cohen:

thought I saw somewhere that hardware was kind of better than they expected. So I'm not sure if that

Jeff Cohen:

x

Paul Dawalibi:

there's nothing in this article on hardware, but I'm sure we could find data on did

Paul Dawalibi:

they meet their internal hardware goals? So

Jimmy Mondal:

sorry, no, you first you first. I could

Jimmy Baratta:

be way off here. But I kind of just feel like, their target was awesome. Like, what

Jimmy Baratta:

they hit was great. Maybe what what is this, they fell short of what was at 47%. I want to know what

Jimmy Baratta:

decision making went into that initial target. Because maybe it's a product of COVID like

Jimmy Baratta:

expectations against real world kind of resuming. And I just by that, I mean, when everything shut

Jimmy Baratta:

down, gaming obviously took off. And and perhaps this is some type of target that was set under

Jimmy Baratta:

those assumptions. And the real world and the way things started to play out this year with

Jimmy Baratta:

everything opening back up, you know, change things. So I just think that what they did manage

Jimmy Baratta:

to achieve was great. And I questioned the target itself. Not that it's an indication of things

Jimmy Baratta:

slowing down, but rather it's like, a more realistic baseline, if that makes sense.

Paul Dawalibi:

Keep in mind this was an internally set target. I so

Jeff Cohen:

I'm surprised we even know about it. Like it's Yeah, you don't usually hear like oh are

Jeff Cohen:

in

Jimmy Baratta:

because the numbers still great, because the numbers are like

Jimmy Mondal:

oh, look at that. Oh, we missed our Ah, stop. It's so tough. I also think like if

Jimmy Mondal:

they're probably measuring the Game Pass subscriptions for PC and the consoles separately,

Jimmy Mondal:

right. And so you're probably seeing, you know, whatever variants that you see in the console

Jimmy Mondal:

supply and demand doesn't probably line up with a PC part of it. And so I wonder if like a lot of

Jimmy Mondal:

the people that were going to get Game Pass on PC already have Game Pass. And so how many more like

Jimmy Mondal:

how can you reach more people at this point? Is i What, what I'm imagining what their next obstacle

Jimmy Mondal:

is? Because everyone I know that knows about Game Pass has Game Pass. And everyone that doesn't know

Jimmy Mondal:

about it doesn't have it. So I just wonder like if they're just missing reaching that last at that

Jimmy Mondal:

other bit of people, but

Paul Dawalibi:

Well, let me give you one more piece of information here which may answer that

Paul Dawalibi:

question. And I think this is most telling because you guys mentioned how do we even know this? I'll

Paul Dawalibi:

tell you how we even know this. It showed up in a filing right like obviously Microsoft a public

Paul Dawalibi:

company has to make filings and this filing was related to the CEO such an Adela as compensation.

Paul Dawalibi:

And Game Pass subscriber growth is one of the many Trix it's the short list of performance goals for

Paul Dawalibi:

Satya directly. So he has to hit certain growth goals for X Basques Xbox Game Pass, and that that

Paul Dawalibi:

obviously has a direct impact on his compensation. It's the only I'm going to just say this, I'll

Paul Dawalibi:

read this directly. It's the only pure gaming metric listed in his payment plan, and sits

Paul Dawalibi:

alongside other priority targets, including number of LinkedIn sessions, and the usage of Microsoft

Paul Dawalibi:

Teams. So when you talk about like strategic priorities, Game Pass is literally up there, like,

Paul Dawalibi:

not even right up, it's up there, at the very

Jeff Cohen:

top of it. Honestly, it Paul, that's a great point, I think that of you for taking this

Jeff Cohen:

story entirely. That point you just made matters so much more is more so much more interesting than

Jeff Cohen:

the number versus what the internal target is, particularly now that I know that it came from

Jeff Cohen:

something like a proxy like that, where a lot of times that internal goal, like to hit certain

Jeff Cohen:

payment metrics is not what the forecast is, or not what you know, it's like, this would be a

Jeff Cohen:

stretch target. And if we hit 50% of it, you get 50% of the pay. If you hit 100% of it, you get x.

Jeff Cohen:

So like, it's not like this was what they expected. And then they did way worse. But I think

Jeff Cohen:

it's really interesting one that it's even in there at all. So it shows there is obviously a

Jeff Cohen:

real buy in from the board level Microsoft to do gaming, which maybe shouldn't be shocking. But

Jeff Cohen:

that's still, I think, important for a company that the size and scale of Microsoft. And then the

Jeff Cohen:

point you made about it being the only gaming related metric, like how wild is that you would

Jeff Cohen:

think that number of X boxes sold, or total revenue of the Xbox, they don't they don't care. I

Jeff Cohen:

mean, division doesn't matter. They just care about Yep, they care about subscriptions and Game

Jeff Cohen:

Pass. So that that is really a very interesting fact, back there.

Paul Dawalibi:

I agree. I think that's maybe the most interesting and it, you know, I sort of I

Paul Dawalibi:

tried to mislead you guys. And I asked at the beginning, you know, is game past like dead?

Paul Dawalibi:

Right? Can we? Oh, my God with the growth is slowing. But I would not be surprised? No, but now

Paul Dawalibi:

it all sort of makes sense in the context of spending, you know, $8 billion on Bethesda where

Paul Dawalibi:

if Game Pass really is the strategic sort of priority. The more the more exclusives they have,

Paul Dawalibi:

the more studios they own. The beefier that product becomes the more compelling the value

Paul Dawalibi:

proposition becomes like, I wouldn't be surprised if and they already offer this right. You can buy

Paul Dawalibi:

an Xbox today with an all in price that includes Game Pass. I wouldn't be surprised if that becomes

Paul Dawalibi:

the only way to buy an Xbox period. Like the product just becomes essentially a subscription

Paul Dawalibi:

service where they send you the hardware no different than Verizon sending you a modem. I

Paul Dawalibi:

don't know. Let me just read some of them and get caught up here when he says I'm Korean so

Paul Dawalibi:

automatically a master of Starcraft and other RTS Yes, funny. If you're not, I believe they disown

Paul Dawalibi:

you or they deport you or something. Stewart says not so sure about the logo, though. While the RTS

Paul Dawalibi:

logo was was okay. There's nothing. Nothing special about it. Nothing. Alex says of course

Paul Dawalibi:

it's slowing. We can't get our hands on next gen. Which was Lindsay's comment and Bruna says can't

Paul Dawalibi:

grow more because people can't find consoles to buy. Yeah, there's definitely supply chain

Paul Dawalibi:

problems. Stewart says Surely it's because of Nintendo entering the space. Yeah, somehow I don't

Paul Dawalibi:

don't think that's the case. Versus Game Pass should be a good driver of Xbox sales akin to

Paul Dawalibi:

exclusives for PlayStation. There's a lot of good games coming out and lined up to come out on Game

Paul Dawalibi:

Pass. Agreed. 100%. And I also find like for me, at least, I'll try a game on Game Pass. And

Paul Dawalibi:

realize like, I'm so glad I got it through Game Pass because now I probably never would have

Paul Dawalibi:

bought it right. I'm so glad I didn't spend $60 on that. Briana says, but even PC, it's been hard to

Paul Dawalibi:

get parts true, which also would affect Game Pass subscriptions. So Adam says Xbox all access

Paul Dawalibi:

requires a credit check. So I doubt it'll be the only way to buy. I mean Adam there's just so many

Paul Dawalibi:

ways around this like you know, there's a lot of FinTech companies and there's no reason Microsoft

Paul Dawalibi:

can do this like affirm and things like that that bypass the whole sort of credit check and still

Paul Dawalibi:

have monthly essentially it's they're they're lending you consumer credit, but they do it

Paul Dawalibi:

without the credit check. I wouldn't be surprised if Microsoft figures that out also. Like you buy a

Paul Dawalibi:

peloton and not need a credit check on a monthly payment oh and says Hey everyone a bit late but

Paul Dawalibi:

I'm here own welcome. Alright, let's let's move on guys. That was Microsoft. We're going to get to, I

Paul Dawalibi:

promise we're going to get to FaZe Clan. We're going to talk about FaZe Clan, but we're going to

Paul Dawalibi:

start with some a little more minor story first and this is Chipotle. Chipotle in the news.

Paul Dawalibi:

Opening a virtual restaurant in Roblox giving away a million dollars in free burritos. So, basically,

Paul Dawalibi:

it's just as the headline says there's a every day after 6:30pm Eastern time the first 30,000 fans

Paul Dawalibi:

who dress their avatars in a Chipotle inspired costume and visit the chipotle virtual restaurant

Paul Dawalibi:

cashier get a code for one free burrito in real life. So it's the first 30,000 every day until

Paul Dawalibi:

Halloween. So they're saying in total, they're going to give away a million dollars of free

Paul Dawalibi:

burritos.

Jimmy Mondal:

Bottle make tears My question

Paul Dawalibi:

for you guys, does this mean Chipotle? is officially the first Metaverse

Paul Dawalibi:

restaurant is that like are we is we okay to call this I don't know what do you guys think about

Paul Dawalibi:

this? We seem to be fans of every Roblox activation. What do you guys think of this one?

Jeff Cohen:

I like it. I mean, I went back and forth as I as I often do, it probably should have

Jeff Cohen:

gotten second because I could have just taken the other side of it. But we're the reason why I tell

Jeff Cohen:

you the reason why I like and the reason I don't the reason why I like it is because it tied it

Jeff Cohen:

into the real world. Right? So you go you visit in Roblox you get the coupon or whatever your your

Jeff Cohen:

get your free Chipotle. So this is all this is like the classic esports and gaming pitch right?

Jeff Cohen:

For brands. It's you bring in a new, younger digital native customer that probably wasn't

Jeff Cohen:

eating at Chipotle, probably wasn't watching TV commercials where I see a Chipotle every 10

Jeff Cohen:

seconds when I'm watching like Seinfeld, or like, you know, whatever, 60 minutes on Sunday that I'm

Jeff Cohen:

sure no, you know, Gen X, Gen Z or is doing. So I like that. The reason why I was a little bit

Jeff Cohen:

skeptical before I thought about the tie into the real world was just the one thing that I get I am

Jeff Cohen:

not, or I don't think it's necessary. I'm not excited about in the metaverse is food. Like you

Jeff Cohen:

don't need the one of the benefits. Digital, you don't need to eat in the digital world. Like I

Jeff Cohen:

just valued like going to a digital restaurant and pretend eating.

Jimmy Baratta:

I'm not a breath of the wild or rush

Paul Dawalibi:

store like

Jeff Cohen:

any value.

Jimmy Mondal:

Cooking like it not necessarily entire restaurant integrations but like, you know,

Jimmy Mondal:

down the line would forget, like Uber Eats integrations naturally in games, you know what I

Jimmy Mondal:

mean? Like, that's

Paul Dawalibi:

your we need delivery services in virtual worlds.

Jimmy Mondal:

No, but that's what I mean. Like you get you can like while you're in base, right? Say

Jimmy Mondal:

you're playing an MMO or something, right? You're in base with the rest of your team. You're like, I

Jimmy Mondal:

let me place an order real quick in the in the in the thing? You know, I don't know.

Paul Dawalibi:

I see. I see. That's like metaphors. You're right there. Hold on. I let me

Paul Dawalibi:

just understand Jimmy's use case here. There's some case where you're in, you're playing WoW,

Paul Dawalibi:

you're in the middle of a raid. Right? But you haven't had dinner. And it just so happens that

Paul Dawalibi:

wow has decided to put a Chipotle booth in the middle of in the middle of the dungeon. So that

Paul Dawalibi:

you have

Jimmy Mondal:

a mule right? There's like a you know, like, mules that like go back and forth

Jimmy Mondal:

things you put your order in it puts it in real life it like goes and gets it you just keep

Jimmy Mondal:

reading like, I don't know, like just real integration. So I think that's what it's moving

Jimmy Mondal:

towards, right? Like how can we Merced in this world and still get your sustenance and also, I

Jimmy Baratta:

don't think it's to jet to counter this point. I don't think it's to attract new

Jimmy Baratta:

users. I feel like it's more of a brand dominance play. That Chipotle is like up there with Verizon.

Jimmy Baratta:

Everyone knows Chipotle, they're not gonna, you know, I don't think people are like, Oh, I don't

Jimmy Baratta:

like Chipotle. I really like I don't cute oboe or something. You know, like, everyone eats at

Jimmy Baratta:

Chipotle. It's more about just like, let's do something unique. Let's do something cool. Let's

Jimmy Baratta:

go where they are. And to Jimmy's point to Jimmy models point. Like, if this works, how else can we

Jimmy Baratta:

expand upon this tech and integrate like an in game ordering thing and, and, and again, like

Jimmy Baratta:

Jeff, Jeff, there's so many games were eating as a part of the game where your character can get

Jimmy Baratta:

buffs where he can recover health. You know, there's potions and i i There's some things I just

Jimmy Baratta:

can't talk about, though. tell you guys about after the show about a fortnight event I was a

Jimmy Baratta:

part of. But it's an awesome branding opportunity when you can not only have a Chipotle restaurant

Jimmy Baratta:

in the game, but maybe one of the meals you make is like is the Chipotle burrito right? And again,

Jimmy Baratta:

it's just it's dominating that brand space. It's becoming the first and the metaverse and this is

Jimmy Baratta:

like the coolest non fortnight in game activation I've ever seen.

Paul Dawalibi:

Yeah. Can I ask you guys one question. I looked at a few places where this news

Paul Dawalibi:

story was posted. I'm trying to find the article that I had here. But what I noticed was there was

Paul Dawalibi:

basically, at least in the article I looked in, there was not one mention of metaverse. Like the

Paul Dawalibi:

actual word. Do we feel like this was Wonder? But is this a marketing blunder on Chipotle spark? Is

Paul Dawalibi:

this

Jimmy Baratta:

missed opportunity?

Jeff Cohen:

They need a consultant,

Jimmy Baratta:

a master of the metaverse himself.

Paul Dawalibi:

Yeah. I will also add just this related story guys, cuz and then we'll wrap up on

Paul Dawalibi:

Roblox and we'll move on here. But there was this other piece of news this week, where they unveiled

Paul Dawalibi:

this electronic music festival. And this time they did mention the metaverse. And so they've

Paul Dawalibi:

partnered with this event, music event promoter Insomniac, to create the largest dance music

Paul Dawalibi:

festival, etc. To introduce this to the metaverse. I mean, this one, this one, I think seems maybe

Paul Dawalibi:

even more obvious than the chipotle one. But I'm curious where you guys stand on this.

Jimmy Baratta:

So EDC is massive, right? It's this huge carnival every year outside of Las Vegas.

Jimmy Baratta:

It's I think it just happened last weekend, by the way when we were all there for the conference.

Jimmy Baratta:

And, you know, I get what you mean by saying it's like more natural or you kind of follow it a

Jimmy Baratta:

little bit more because it's similar to DJ marshmallow and astronomical and Ariana Grande.

Jimmy Baratta:

But to me, I feel like, I don't know, food that your character but like, what can you

Paul Dawalibi:

say, Jimmy? Kay, is it fair to say that Roblox is running away with this Metaverse

Paul Dawalibi:

thing, like and fortnight is, you know, who arguably had everything to lose is really lagging

Paul Dawalibi:

in this department. And it seems Roblox has one up them in just about every department.

Jimmy Baratta:

I don't know if they've won up to him because I want to see the numbers at this Ed

Jimmy Baratta:

digital EDC event. I want to see the number of Chipotle orders for the fortnight numbers here.

Jimmy Baratta:

We're, you know, no pun intended astronomical, you can't really touch those. And fortnight was first

Jimmy Baratta:

by like two years, I think three actually now. So I don't know fortnight's falling behind as much as

Jimmy Baratta:

to your point. Like they haven't done something innovative in a while. They've just been more

Jimmy Baratta:

concerts. And that's what I do love about robots that I'll give you credit for and where I was kind

Jimmy Baratta:

of going as well was they're not just thinking concerts, they're thinking food, maybe they'll

Jimmy Baratta:

think a shoe store. I want to get to some of these comments in chat because Stewart in the GTA

Jimmy Baratta:

comment are particularly interesting that I think we'd like to dissect a little bit. But um, yeah, I

Jimmy Baratta:

mean, EDC is massive I get I get what you're saying about how music or a concert or kind of a

Jimmy Baratta:

natural integration. I don't see why anything is going to be any different. Because if that's what

Jimmy Baratta:

the metaverse is, and is becoming than a shoe store, where you can order your shoes, and you

Jimmy Baratta:

know, anything else are going to become just as natural. It's just that we started with music

Jimmy Baratta:

first. So to us it feels natural, but like how unnatural is like you're at a concert but you're

Jimmy Baratta:

not dancing. Your digital character is dancing. You know, so I mean,

Paul Dawalibi:

that's that that works for me. But my my character dancing probably is a lot better

Paul Dawalibi:

than me dancing. Let's face it.

Jimmy Baratta:

I just moves anyways.

Paul Dawalibi:

Oh, it says, hey, everyone a bit late, but I'm here I am one welcome. Adam says You

Paul Dawalibi:

said I'm gonna say you said Rob blocks wrong. There you go. Adam. I know you love hearing Rob

Paul Dawalibi:

about Rob blocks, and all the things Rob Rob blocks is doing. I better stop saying it because

Paul Dawalibi:

I'm gonna just find myself saying it. Stuart says imagine that heading into Domino's in game and

Paul Dawalibi:

having it turned up at your house. It's kind of interesting, right? Like if if the future like the

Paul Dawalibi:

next. The next sort of evolution of retail is presence in now all of these Metaverse platforms.

Paul Dawalibi:

I can just see it becoming a bit of a nightmare for actual retailers who need to build out these

Paul Dawalibi:

experiences on every single platform, right until we have sort of one true metaverse.

Jimmy Baratta:

There's companies that are doing that, you know, so Jimmy IV invested in the

Jimmy Baratta:

network. And they're trying to create these virtual experiences where just because you're not

Jimmy Baratta:

at this fashion show, or you're not at this art gallery, doesn't mean you can't participate

Jimmy Baratta:

digitally and even buy those pieces through their app.

Paul Dawalibi:

There's still one off kind of activations. Jimmy RIGHT. It's not like there's,

Paul Dawalibi:

there's common like, it's not like there's some common systems that allow you to open a Metaverse

Paul Dawalibi:

store and it'd be in Roblox in fortnight in brain and right like

Jimmy Baratta:

that. Not yet, but I just want to say we're kind of looking in that direction. It's

Jimmy Baratta:

I don't think it's far off.

Jimmy Mondal:

Definitely people are experimenting, like we have like Gog galaxy, which tries to you

Jimmy Mondal:

know, incorporate your steam launcher, your origin launcher and all those game launchers and tries to

Jimmy Mondal:

put them in one thing. And so the next thing just needs to come along, which is your Metaverse

Jimmy Mondal:

collector, you're going to put your Roblox and your Facebook's and your whatever the that casts

Jimmy Mondal:

ends up being in that thing and you just end up in this cesspool of despair and darkness. No, I'm

Jimmy Mondal:

kidding. But yeah, no, I think it'll just be one extra collection app. That'll get us there, but

Jimmy Mondal:

we'll see how that works out.

Paul Dawalibi:

I love this comment Alex says, Let me order an Uber Eats while playing Call of Duty

Paul Dawalibi:

make it a kill streak.

Jimmy Mondal:

If you suck in the game, say goodbye to dinner, buddy.

Paul Dawalibi:

You're good at the game. You're gonna have way too much food way too much.

Paul Dawalibi:

UberEATS coming to your house. BRUNO says these current Metaverse brand activations hype have a

Paul Dawalibi:

real early 2,002nd Life fine. Um, I Bruno, I see your point. I think we're better than that. Right.

Paul Dawalibi:

Like I don't think it's it's that crude or rudimentary, but it definitely doesn't feel like

Paul Dawalibi:

endgame. Right. I think that's a that's a fair. Definitely a fair point.

Jimmy Mondal:

The Zuckerberg demonstrations that we've seen about the metaphors especially feel

Jimmy Mondal:

second lifee the rest of it is like okay, we're heading on to this cool, futuristic pathway. And

Jimmy Mondal:

then you see the presentations that from Facebook, and you're like, but no, not the enterprise.

Jimmy Mondal:

Metaverse know

Paul Dawalibi:

why that Stewart says would work well on GTA most definitely would work well in

Paul Dawalibi:

GTA. But GTA you could argue has become like its own little Metaverse platform also, just with all

Paul Dawalibi:

the modding and that modding community. Alright guys, let's Any other thoughts on this before we

Paul Dawalibi:

move on? Jeff, you still think? Yeah, Roblox is not going to pass Twitter in terms of users?

Jeff Cohen:

I do not. I still do not.

Paul Dawalibi:

Okay. All right. Let's talk about everyone wants to talk about the story. I think it

Paul Dawalibi:

was the big, big big news this week. It's none other than our favorite hoodie org Faze clan in

Paul Dawalibi:

the news and the headline here esports company, which I find interesting because every time 100

Paul Dawalibi:

Thieves someone refers to 100 Thieves in an article or in a headline, it's apparel, the sports

Paul Dawalibi:

and apparel company or lifestyle and apparel company. Here we have esports company FaZe Clan,

Paul Dawalibi:

valued at a billion dollars after SPAC merger. So phase FES announced earlier this week, they're

Paul Dawalibi:

going to combine with a spec, they're gonna merge this back to become a publicly traded company,

Paul Dawalibi:

valuation is going to be a billion dollars or implied value of a billion dollars. And the

Paul Dawalibi:

transaction will generate total proceeds of 291 million, including 173 million in cash from the

Paul Dawalibi:

proceeds of the IPO proceeds of the SPAC essentially that they merged with so that cash

Paul Dawalibi:

held in trust, and 118 million from committed private investments in public equity. So pipe. So

Paul Dawalibi:

in total 200,000,200 90 million in total transaction proceeds. After the merger, it's going

Paul Dawalibi:

to change its name to phase holdings, it's going to trade on NASDAQ, under the ticker symbol, phase

Paul Dawalibi:

FA Zed II. Before we dive into any of the other numbers, and you know, there, there's, I can't I

Paul Dawalibi:

don't think I can share everything like I have. I have the whole investor presentation. I'm not sure

Paul Dawalibi:

if that's public or not.

Jeff Cohen:

Well, there's one that's public, I don't know. If but you may have one, you may have

Jeff Cohen:

one that's not public, but there was.

Paul Dawalibi:

So I'm not going to put that on screen. But Jimmy, our residents, ex lawyer.

Jimmy Baratta:

So

Paul Dawalibi:

I have all the numbers. I have all the data but big picture. Right. And I think Bruno

Paul Dawalibi:

asked this earlier, is phase worth a billion dollars.

Jimmy Baratta:

I definitely want to hear Jeff on this first, but I'm surprised you're not

Paul Dawalibi:

I just got word that the presentation I have is okay to go public with it.

Paul Dawalibi:

So

Jimmy Baratta:

I will say I wasn't asked this all week long. And I pretty much came to say it gave

Jimmy Baratta:

the same advice to everyone which was, you know, well, I don't want to give stock advice. Since I'm

Jimmy Baratta:

not qualified on the show. I personally didn't you know, I'm not interested in this. As far as

Jimmy Baratta:

putting my own money here. I have a lot of history with FeS and you know, it's a very strong brand,

Jimmy Baratta:

but it's very brand dependent. And I feel like if anything were to come out or anything were to

Jimmy Baratta:

happen might not just come out, but rather it could be heavily influenced by what's in the news

Jimmy Baratta:

that week. And for that reason, I'm kind of staying away from it.

Lindsay Poss:

Uh, I have a question for you for you guys. Since there's some, you know, especially

Lindsay Poss:

Jeff like investor, Jeff and Paul and button all you actually investor experts in the room. But

Lindsay Poss:

what does going public do and what are the benefits for phase?

Paul Dawalibi:

Well, can we let me just go Jeff, I'm gonna I'm gonna get let you answer that in

Paul Dawalibi:

full. But let me just point out the most obvious here directly and this is directly from the

Paul Dawalibi:

investor presentation so I can bring this up here. And this is what should stand out to you pro forma

Paul Dawalibi:

phase will be owned 68% by existing stockholders are expected to roll 100% of their equity into the

Paul Dawalibi:

combined company. Boom, one of the reasons to go public is because as a shareholder face, you just

Paul Dawalibi:

became, you just created a ton of wealth for yourself personally. So there's that. But Jeff,

Paul Dawalibi:

I'll let you

Jeff Cohen:

answer those I say, you know, when you go public to raise capital, first and foremost,

Jeff Cohen:

and then provides liquidity right for people who, obviously these people 100% are rolling it into

Jeff Cohen:

the new equity, which means they're not selling, but it'll make it easier for them to sell down the

Jeff Cohen:

road. Also, you'd go public, because now you have a tradable stock so they can go out and raise more

Jeff Cohen:

capital buy things do m&a with using their stock, which is something they talked about a bunch in

Jeff Cohen:

the presentation. Being acquisitive, and kind of going out and potentially buying different assets

Jeff Cohen:

for that I thought was interesting. And I kind of want to pose a question of like, what do you think

Jeff Cohen:

they would look at? Would it be other esports? Teams? I kind of don't think that's the case. I

Jeff Cohen:

think it would be kind of more adjacent technologies. And they mentioned some different

Jeff Cohen:

areas, including, they really mentioned all the buzzwords to be honest. They talked about

Jeff Cohen:

Metaverse, they talked about esports. Betting, they talked about crypto, they talked about

Jeff Cohen:

content content is pretty much everything you want to see in a presentation. My thoughts on one,

Jeff Cohen:

number one, I bought the stock because I was kind of hoping we'd see it become a meme just because

Jeff Cohen:

it's such a strong brand, I was hoping you you'd get some sort of a little bit of a speculative

Jeff Cohen:

mania. So I kind of bought it for speculative trading purposes. from an investment perspective.

Jeff Cohen:

You know, the valuation is a bit steep, I think phases, a strong brand, like Jimmy said, esports

Jeff Cohen:

teams, we had sort of been calling this on the live stream in the podcast for a while that we

Jeff Cohen:

were going to see a big esports team go public. I think we you know, mentioned it numerous times,

Jeff Cohen:

like every time we talked about that Forbes list. Wow. Which as an aside, those Forbes guys are

Jeff Cohen:

probably feeling a bit better about themselves in terms of valuation. You know, we pulled that up a

Jeff Cohen:

bunch of times, and it was like, Oh, 300 million for this team or 500 million for that team. And we

Jeff Cohen:

always kind of like maybe scoffed at it a little bit. Well, now, we have a concrete example of a

Jeff Cohen:

team being valued at a billion dollars. So So I think that's that's pretty good validation for the

Jeff Cohen:

space. But just getting down to the numbers. Have you pulled that that page you just had up?

Jeff Cohen:

Quickly? Not that one, the one that had that the overview? Hey, what I wanted to get out was they

Jeff Cohen:

talked about multiples. So it's not that when there's the the one you had up before, I think

Jeff Cohen:

they talked about basically they're doing 50 million in revenue, and they're losing $20

Jeff Cohen:

million, this current year. So to be valued at a billion dollars. That's fair. Yeah. I was talking

Jeff Cohen:

about more the transaction overview page, but it doesn't matter. This has the revenue numbers as

Jeff Cohen:

you as you are. But yeah, this second bullet here. So you know, they're looking at it kind of on a

Jeff Cohen:

three year out basis, right? So they're saying, Oh, it's trading four times revenue of 2023. That

Jeff Cohen:

multiple is not crazy. If it was like a 2021 2022 number, just looking that far out. It's a bit

Jeff Cohen:

aggressive, I think, in my opinion, you're paying 20 times revenue, only doing 50 million revenue.

Jeff Cohen:

That's to me a bit steep when you look at what what kind of like sports teams typically trade at.

Jeff Cohen:

So for that reason, I do think I would be a lot more bullish on this deal if it came out at three

Jeff Cohen:

or 400 million. And then you could say, look, I think, you know, in the next year or two, this

Jeff Cohen:

could really be a billion dollar company. And there you got your two or three times, kind of,

Jeff Cohen:

you know, exit, or, you know, as a shareholder your return. I just think if you're buying this at

Jeff Cohen:

a billion you need these guys to become the next Dallas Cowboys, like literally, which I'm not sure

Jeff Cohen:

I'm willing to underwrite that as an investor, that that's going to happen in the next two or

Jeff Cohen:

three years. That's, that's my take at least.

Paul Dawalibi:

So let me answer let's get to some of these questions and comments here. Stewart says

Paul Dawalibi:

excuse my ignorance here, but as phase made money, well, the beauty is we now have all this data. And

Paul Dawalibi:

if you look at their financials that I pass them,

Jeff Cohen:

they did about 50 million or they're doing 50 million and they did lose See it?

Paul Dawalibi:

Yeah. So they're expecting to do 50 million in revenue in 2021 and lose 19 million.

Paul Dawalibi:

They don't show any previous years. But there's no way they made money in previous year. Stewart, so

Paul Dawalibi:

no phase has not made money. And that's why they've continued to raise these private rounds

Paul Dawalibi:

over and over again to sustain the business. Christopher says, Do it show that 3% esports slash

Paul Dawalibi:

gaming revenue? Well, the breakdown is interesting, right? Because for 2020, for 2020,

Paul Dawalibi:

they showed 3 million in revenue from esports. And gaming. Right? That Correct? 3 million out to be

Paul Dawalibi:

fair, like, is that out of the total? 38? So it's a bit more than 3%? I think it's like 10%. Right.

Jeff Cohen:

But I guess Chris, is that surprising? Because I guess esports. And gaming probably

Jeff Cohen:

includes like what like when winning? Because the rest of them? Like you would expect a team to make

Jeff Cohen:

most of their money on the other categories like brand sponsorship advertising. I know, I think

Jeff Cohen:

your

Paul Dawalibi:

brand sponsor was the biggest right at 17.

Jeff Cohen:

I think Chris is making a joke. Like they don't even make money on esports. It's like a

Jeff Cohen:

hoodie. org, which is probably true. But I think for this esport They're probably talking about

Jeff Cohen:

like, tournament winning. So like I would, it's not surprising that that's a much smaller piece

Jeff Cohen:

than like advertising. To me, at least.

Paul Dawalibi:

I was surprised how much they're making on content, frankly, because they separate

Paul Dawalibi:

that out for whatever reason content from brand sponsorship. You know, it's a third of their

Paul Dawalibi:

revenue for 2020. I thought that was interesting.

Jimmy Mondal:

I think phase is one of the few teams that's you know, focused so heavily on

Jimmy Mondal:

content, like I think there as much as we've seen them not find a lot of competitive success in the

Jimmy Mondal:

last couple of years, like YouTube is their game and Instagram, YouTube and Instagram. They've got

Jimmy Mondal:

on lock, like

Jeff Cohen:

your thought on that. And I don't know if these are defined here. But is it possible that

Jeff Cohen:

they have a big roster of content creators, right? Like, is it possible that brand sponsorship? Is

Jeff Cohen:

anyone like, okay, Nike signs a deal with FaZe like pays them X million over this period of time?

Jeff Cohen:

That's brand sponsorship. But content is like, whatever, Kyler Murray like streams and gets like

Jeff Cohen:

subscribers or whatever, like Twitch revenue that goes into the con, maybe that goes into the

Jeff Cohen:

content

Paul Dawalibi:

bucket? What what's interesting is maybe even hoodie org for phase is not a fair

Paul Dawalibi:

assessment, right? Because if we look, and let's look at the the easiest to view bar where they see

Paul Dawalibi:

the business in 2025, right? If you look at consumer products, there's no number here, but

Paul Dawalibi:

this light gray area that my mouse is over is a relatively small piece, when you look at the size

Paul Dawalibi:

of the other bars, right? Like, hard to say hoodie. Org, if they believe hoodies are only sort

Paul Dawalibi:

of this relatively small section, it seems like they're expecting far more revenue from what

Paul Dawalibi:

they're saying is m&a.

Jeff Cohen:

Who knows what that's kind of a big red flag

Paul Dawalibi:

that is potentially a big red flag. And content looks like it's the second biggest

Paul Dawalibi:

bar. Right? So they're fundamentally not even a life. They're not they're barely, they're maybe

Paul Dawalibi:

not a neat, like they're a media company, then essentially based on that. If you look at the

Paul Dawalibi:

breakdown here, not a hoodie or even I mean,

Jimmy Mondal:

it's crazy too, because that's how you know FaZe Clan, like even it, you know,

Jimmy Mondal:

forgive me for crying, but like the name of the deck is project trick shot, you know, like FaZe

Jimmy Mondal:

Clan back in the day was all trick shots and content and YouTube kids like, it's crazy that

Jimmy Mondal:

they've managed to continue that sort of branding into this day and age and still find that sort of

Jimmy Mondal:

success on such a wide scale.

Jimmy Baratta:

They were never really a competitive team. I mean, they right got into

Jimmy Baratta:

competitive esports because esports was like this buzzword for the last three work three years in

Jimmy Baratta:

the gaming community. But like to Jimmy models, point phase was a trick shot group, you know, it

Jimmy Baratta:

was a lot easier to just post these cool sniper kills, and then grow a following on YouTube than

Jimmy Baratta:

it was to do anything else. They weren't a hoodie, org, they weren't they were a content community.

Jimmy Baratta:

Whenever I would talk with with Lee Trank or and Greg salco, before he started exit and others over

Jimmy Baratta:

there, and I would ask about, you know, intense to expand into this esport or that game, they would

Jimmy Baratta:

always kind of brush it off and be like we're really focused more so on content in media, you

Jimmy Baratta:

know, that's our bread and butter. So it doesn't surprise me that that's a focus here in this deck.

Jimmy Baratta:

What is surprising is it's so much larger than I anticipated because we do focus a lot on the

Jimmy Baratta:

hoodies and on the other things that are more funny and fun to poke at. But um, coffee, fear and

Jimmy Baratta:

butter.

Paul Dawalibi:

They're still saying they're gonna sell $50 million of hoodies in 2025 which is a

Paul Dawalibi:

lot. It's a lot, right they're saying their hoodie business is going to grow. What is the math here

Paul Dawalibi:

7x seems hard to believe. It seems somewhat questionable. They They're gonna do 178 million in

Paul Dawalibi:

revenue from m&a. And they're saying three acquisitions to be identified in the future, that

Paul Dawalibi:

that's an oddly specific revenue number. Given that, that seems the targets haven't been

Paul Dawalibi:

identified. And, and then the last comment I would have here is just that, you know, the growth in

Paul Dawalibi:

some of these bars feels like, again, like, everything has to go perfectly right, like 10x,

Paul Dawalibi:

more than sorry, 12x the revenue on content in the next four years, feels, feels fast feels

Jimmy Baratta:

it also, it also feels like that fin tech story that apparently got backed out, you

Jimmy Baratta:

know, three years later with this unidentified partner. So are we gonna see another one of those?

Jimmy Baratta:

Oh, remember those projections in that revenue where that's not happening. And we're not listing

Jimmy Baratta:

what the target was anyways,

Paul Dawalibi:

having said that, I think the the flip side of this is if you have investors,

Paul Dawalibi:

investors are obviously buying into the story. I think it shows the power of kind of that media

Paul Dawalibi:

business story, right, that there's, there's clearly excitement around these kinds of stories,

Paul Dawalibi:

people believe that the next gen media companies haven't been built yet. And maybe phases, one of

Paul Dawalibi:

them, right, that that I think this is part of the excitement around this.

Jimmy Baratta:

I mean, there's no denying, it's a really, really strong brand. But we've also seen

Jimmy Baratta:

them make a lot of mistakes, right, with founders that they removed for crypto pump and dumps and

Jimmy Baratta:

other things. So I don't want to throw dirt on their name. I just want to say, like, I'm just

Jimmy Baratta:

still very hesitant about all of this.

Paul Dawalibi:

I'm going to get to that. Jimmy in a second here. Let me just read some of these

Paul Dawalibi:

comments, and then we're going to get to that point specifically, Bruna says what has to be the

Paul Dawalibi:

multiple on hoodie sales to get to that valuation? Well, you know, they're there. They're already

Paul Dawalibi:

trading at a significant multiple to their hoody sales. So, you know, the multiples I sort of don't

Paul Dawalibi:

mind and I think, Jeff, I think you said this, right, it's like, crazy. They're not in a world

Paul Dawalibi:

where you believe that you're going to see massive growth and the industry is going to grow

Paul Dawalibi:

massively. Is the valuation rich? Yes. Is it? Is it defensible? I think it is. Right? There's

Paul Dawalibi:

absolutely a way to defend this and say, Look, if this if their revenues growing the way they're

Paul Dawalibi:

going to project then they're definitely going to grow into that valuation with no issue. Greg says

Paul Dawalibi:

have to assume phase reviewed all different options to monetize it's like ordering dessert and

Paul Dawalibi:

choosing the butter cake. This back was their best choice.

Jeff Cohen:

I'm not sure I would ever describe a SPAC butter, maybe the Trump's back, but that's

Jeff Cohen:

the only one. Not for political reasons strictly for monitor.

Paul Dawalibi:

Chris says, Well, this is a good follow up to Greg's point, which is serious

Paul Dawalibi:

question, would it be valued at a billion if it wasn't a spec? Jeff, good question for you could

Paul Dawalibi:

PHAs have gone public without a spec? Could they have just done a normal IPO?

Jeff Cohen:

Given like the current landscape rounds backs, which is a little bit negative, like

Jeff Cohen:

Spax had a massive boom earlier in the year where it kind of almost to some extent, I think overtook

Jeff Cohen:

IPOs is like the preferred route to go public, even though historically it was not. I think that

Jeff Cohen:

Bloom has come off a bit. I don't know actually much about the SPAC backers, I guess it's B Riley,

Jeff Cohen:

which is, you know, decent investors. Yeah, decently respected investment bank. But it's not

Jeff Cohen:

exactly like this was, you know, Mark Cuban SPAC or something like that, or someone who's going to

Jeff Cohen:

add a lot of value, just through that name out of nowhere, but so, I would think that, you know,

Jeff Cohen:

they would have probably preferred an IPO. It's hard to say, without knowing whether they would

Jeff Cohen:

have gotten the billion dollars in the IPO, I would say another red flag, just in looking at the

Jeff Cohen:

deck, I don't know, if they announced the investors in the pipe round. I think that's

Jeff Cohen:

typically something that gets announced. And the quality of the investors in the pipe round is

Jeff Cohen:

usually something that people look at, to say, like, hey, these guys have institutional support.

Jeff Cohen:

And the fact that they didn't announce like, hey, you know, Tiger global and Wellington and KKR,

Jeff Cohen:

whoever, you know, invested in the pipe, kind of leads me to believe that maybe it wasn't the best

Jeff Cohen:

quality investors in that pipe or that the pipes not committed or something like that. And to be

Jeff Cohen:

fair, maybe all that's in the press release, and I glossed over it. So if that's, that is the case,

Jeff Cohen:

strike that from the record, but I didn't it wasn't it wasn't Jeff, which is important, I think

Jeff Cohen:

is important.

Paul Dawalibi:

So are you saying then that the spec felt like a feels like to you? This was a

Paul Dawalibi:

plan B for them?

Jeff Cohen:

Probably yeah. Or opportunistic. Maybe they hadn't spotted the beauty of a spec is that

Jeff Cohen:

it's a quick route to go public. So I mean, it's possible that this spec was just like Looking for

Jeff Cohen:

assets and kind of went to phase and was like, hey, we'll put a billion dollar valuation on you

Jeff Cohen:

get you public. And phase was like, wow, well, we had been looking to raise capital at a $600

Jeff Cohen:

million valuation. But that sounds a lot better. Like let's go do that. So maybe it was just

Jeff Cohen:

opportunistic on phase, but I doubt they were both evaluating an IPO and dispatch and chose, you

Jeff Cohen:

know, willingly to go down this background.

Paul Dawalibi:

Let me just read some of these other comments here. Alex says, I mean, didn't

Paul Dawalibi:

luminosity reach a billion in valuation after they acquired Vancouver Titans? Alex not luminosity

Paul Dawalibi:

enthusiast as a whole, but definitely not luminosity specifically. And now enthusiast. Their

Paul Dawalibi:

stock has taken a bit of a beating their market caps back down to around five $600 million? I

Paul Dawalibi:

think. So this is the first definitely the first standalone billion dollar esports. Org. Not not

Paul Dawalibi:

luminosity. Chris says they rightfully describe themselves as a lifestyle media platform, which I

Paul Dawalibi:

respect entirely. I mean, Chris, what? It's hard. It's hard to call themselves in esports. Org, to

Paul Dawalibi:

your point when so little of the revenue comes directly from that. And I think the media story,

Paul Dawalibi:

the media company story just sells better. Right now. I think that's that's just the reality.

Paul Dawalibi:

Stewart says they're really looking at content for revenue growth, according to that projection

Paul Dawalibi:

absolutely stored that. To me, that's the big takeaway, which is content is the biggest part of

Paul Dawalibi:

the story. Content is the the crux of this entire story. And I love to see it because that's,

Paul Dawalibi:

frankly, that's the bet we're making here at holodeck is on content. So it's good to see that

Paul Dawalibi:

people are getting excited about it. And we're getting these kinds of valuations on businesses

Paul Dawalibi:

that I think are also very interesting. Stewart says and potentially vulnerable then to changes in

Paul Dawalibi:

the deals of those platforms as revenue sources. Yeah. I mean, they're they're, they're dependent

Paul Dawalibi:

on the platforms like social platforms and things like that, and wherever they distribute their

Paul Dawalibi:

content, but fundamentally, I think there's no one big risk factor there. The risk factor, Jimmy, to

Paul Dawalibi:

your point in this deal, and it's obviously not in this presentation is phase has a checkered history

Paul Dawalibi:

as the checkered past. And as a private company, it's sort of easy to get away with that. Right?

Paul Dawalibi:

You know, you're not beholden to anybody except, you know, the shareholders of the company. And

Paul Dawalibi:

even that, there's no rule that says you have to do anything for them right. Here as a public

Paul Dawalibi:

company, as a NASDAQ listed company. A lot of the dirt may see the light of day. And a lot of the

Paul Dawalibi:

dirt, a lot of the, you know, a lot of the stuff that maybe is going behind the scenes, that's not

Paul Dawalibi:

100% kosher, that's been rumored or that's, you know, that's made the rounds of the the gaming

Paul Dawalibi:

news cycles, if that comes to light, from a NASDAQ standpoint, from a, you know, an official

Paul Dawalibi:

regulatory standpoint, this may be very bad for business for phase. I guess I'm curious if you

Paul Dawalibi:

guys think Lindsay, maybe to you is that, you know, is there long term risk as a public company

Paul Dawalibi:

that they can't act like the phase of old, right, like they can't do complete nonsense and get away

Paul Dawalibi:

with it, they can't, they can't play fast and loose anymore.

Lindsay Poss:

I don't know if I see that necessarily as a risk or as a wake up call to

Lindsay Poss:

start running a, or start creating a better run or maybe more profitable business. But I definitely

Lindsay Poss:

think Jimmy's initial point about that was very salient. And we've seen, like the sort of the rise

Lindsay Poss:

and fall phase in the media, depending on what the news is like that week. And that's certainly as

Lindsay Poss:

looking at it from the investor perspective, that's certainly not something that I would be a

Lindsay Poss:

huge fan of, but this might be what they need to turn around that kind of culture. Because a couple

Lindsay Poss:

big stock hits is really going to motivate anyone who's an activist investors step up and try to

Lindsay Poss:

pull in the reins on the company. Alternatively, they could do it internally, they might not even

Lindsay Poss:

need an activist investor to make them want to pull the reins and, and and make smarter

Lindsay Poss:

decisions. So I don't I guess my hope is that they do find a way to run a profitable and men find a

Lindsay Poss:

good system that works for them. But the way things are going or the way things have gone prior

Lindsay Poss:

to becoming public, it makes me nervous for what's going to happen in the next couple of years.

Paul Dawalibi:

Is anyone surprised that as part of this, and this is the last question, I'm gonna ask

Paul Dawalibi:

on this and then we'll move forward guys, but it's anyone surprised that they didn't add someone else

Paul Dawalibi:

to the management team or like someone with more public company experience, you know, a more steady

Paul Dawalibi:

hand maybe You know, as part of this transaction like that, is anyone surprised that the management

Paul Dawalibi:

team seems to be the same exact group of people that have, I would argue, not run this poorly,

Paul Dawalibi:

clearly, because they have a billion dollar valuation now, but I have have spent a ton of

Paul Dawalibi:

investor cash to get here have have sort of made a bunch of very public missteps along the way. And,

Paul Dawalibi:

and I'm not saying throw them all out, but I'm saying, you know, maybe bring in one or two people

Paul Dawalibi:

as sort of confidence that there's experience in the room, there's some public company experience

Paul Dawalibi:

in the room, whatever that is, whatever is sort of missing in that, in that core team.

Jeff Cohen:

I think it's an interesting point, you know, kind of, I guess, maybe speaks a little bit

Jeff Cohen:

to the the, you know, I don't know any of these guys, I don't want to talk about their their

Jeff Cohen:

character or experience. But clearly, they've built a profit or not profitable, both a large

Jeff Cohen:

enterprise, so kudos to them. But it probably speaks a little bit to how the process went down

Jeff Cohen:

with this back. And the leverage, you know, who had the power and who had the leverage that the

Jeff Cohen:

SPAC sponsors, and whoever's in that pipe, didn't want or demand, someone like that to come in and

Jeff Cohen:

be part of the organization? Either they trust these guys and are, you know, obviously they do

Jeff Cohen:

because they're, they're betting on them. But or these guys had the leverage where, even if it was

Jeff Cohen:

suggested, they said, Well, no, we don't want that. We don't want that.

Paul Dawalibi:

I would guess, and this this, my prophecy here, for what it's worth, half the

Paul Dawalibi:

management team two years from now is not at the company anymore. Whether it's because they can't

Paul Dawalibi:

operate the same way they've operated previously, or because they just they've taken their cash off

Paul Dawalibi:

the table. And there's no interest in continuing to work at phase, right? Like, to me it's one of

Paul Dawalibi:

those two things. But I have a funny feeling. This management slide looks very, very different a year

Paul Dawalibi:

or two from now than it does today. And then the question will become, does the coolness of phase

Paul Dawalibi:

survive if you change half or three quarters of the people on that slide?

Jimmy Mondal:

Yeah, I completely agree. Like, I really think that I don't know anything about the

Jimmy Mondal:

business or the financials behind it. Right? Let me make that very clear to anybody watching. But I

Jimmy Mondal:

do think that the five to seven members of Faze clan that they're putting on this board are

Jimmy Mondal:

probably the founding members that want to just get a cut and just be out. That's what I'm

Jimmy Mondal:

imagining it isn't knowing them. And like knowing their Twitter presences and YouTube presences, I

Jimmy Mondal:

can't imagine that they're on the board for any financial reasons, or for their insight and

Jimmy Mondal:

business prowess. But, you know, maybe I'm wrong on that. But I do believe that two years from now,

Jimmy Mondal:

they'll bounce and then they'll have an entirely new FaZe Clan leading the way, which is what

Jimmy Mondal:

they're developing now with their younger audience and reach out in fortnight and things like that.

Jimmy Mondal:

So I think yeah, I agree with you. And I think that's gonna happen for the

Paul Dawalibi:

future. I am excited to see phase food, though that is on the slide here. Just FYI.

Paul Dawalibi:

So you know, food is coming in 2024, phase food, phase, peripherals, phase retail. So we should be

Paul Dawalibi:

seeing

Lindsay Poss:

T's

Paul Dawalibi:

and the NF T's that that's all, that's where all the content dollars are coming

Paul Dawalibi:

from guys. That's the NF selling the NF T's. Alright, let's, let's, let's move on. Just a quick

Paul Dawalibi:

word, guys, before we get to the next story, the business of esports. This live stream, this weekly

Paul Dawalibi:

news show is supported by YouGov. They're a leading international research firm that supplies

Paul Dawalibi:

the very best data on gamers, games, and esports fans around the world. They have been tremendous

Paul Dawalibi:

supporters of this live stream, I highly recommend if you are operating in or around the business of

Paul Dawalibi:

gaming, if you're trying to reach gamers as an audience, it's our target audience for your

Paul Dawalibi:

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Paul Dawalibi:

company a brand, you need to be thinking about actionable data that you can use. To do all of

Paul Dawalibi:

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Paul Dawalibi:

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Paul Dawalibi:

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Paul Dawalibi:

want to wait till the very end. They've got a bunch of free data and reports at

Paul Dawalibi:

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Paul Dawalibi:

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Paul Dawalibi:

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Paul Dawalibi:

Let's we are not going to get to all these stories. So we have a choice. Do we choose one or

Paul Dawalibi:

two or do we do a lightning round? Do you guys want to do a lightning Light lighting. Wow.

Lindsay Poss:

All right.

Jeff Cohen:

Love the lighting

Paul Dawalibi:

I need I need a noise. I need a noise for that right I need a frame steel

Jeff Cohen:

Kramer's thing, the lightning round.

Paul Dawalibi:

Alright, let's, let's start with the first one. This was an interesting article

Paul Dawalibi:

ninja coming out talking about the shortcomings and failure of mixer by the way, in the lightning

Paul Dawalibi:

round, you have one minute to make your comment or less. So in this article he talks about primarily

Paul Dawalibi:

that they did a pretty bad job with my requiring Microsoft accounts. That was I think one of his

Paul Dawalibi:

biggest complaints that you needed a Microsoft account to sign up. And that prevented a lot of

Paul Dawalibi:

people. He said they did do a better job with the underlying tech though, and zero latency. And he

Paul Dawalibi:

said there was a lot of bureaucracy that anything mixer wanted to do, they had to run by Microsoft,

Paul Dawalibi:

and it could take years before any change was implemented. So this is just a few of the

Paul Dawalibi:

complaints that he had. That he talked about here. Any thoughts on ninja detailing the shortcomings

Paul Dawalibi:

and failure of mixer here? By the way, he also mentioned that he had to stream like 10 hours a

Paul Dawalibi:

day or more every single day just to maintain numbers that were even relatively close to his

Paul Dawalibi:

Twitch numbers.

Jimmy Baratta:

I just feel so bad for him making 30 million in a year over this terrible deal in

Jimmy Baratta:

this terrible company that he hated. Like, are you kidding me? I'm more surprised that he's actually

Jimmy Baratta:

talking about this and that this isn't barred by some document. Honestly. I don't think he can say

Jimmy Baratta:

anything negative about his experience with mixer. And you know, no, I mean that that's just me kind

Jimmy Baratta:

of being I think more of a character for the show like interesting that they're you know, not not

Jimmy Baratta:

surprising. Interesting. But again, he made out all right, so yeah, go go for it, Jimbo.

Jimmy Mondal:

And it's just like, bro, like, we knew we knew this the whole time? What kind of

Jimmy Mondal:

thanks for saying it. We knew that's why nobody used it. Like when this is no secret did nobody

Jimmy Mondal:

like what? Thanks for finally admitting it. The next thing we need to do is to get him to finally

Jimmy Mondal:

admit that his performance at Time Square was god awful. That's the next step. But you know, we'll

Jimmy Mondal:

get there eventually. It's interesting

Jeff Cohen:

not at all surprising examples of things the team wanted to do and didn't get.

Lindsay Poss:

Yeah, I think it's actually I mean, he's such a mega star. And Microsoft is such a big

Lindsay Poss:

company. I still think it's interesting to get the inner workings in the backstory on both, even if

Lindsay Poss:

it seems a little obvious. So I think like, you know, it might have been exactly what we thought

Lindsay Poss:

it was, but I don't get like it. I don't really get a better vibe from this or anything. I just

Lindsay Poss:

think that he's it. This was a growth pain for Microsoft. And hopefully they if their next gaming

Lindsay Poss:

endeavor can figure out something a little bit better.

Paul Dawalibi:

Alright, let's move on to our next one guys lightning round here. And if you don't

Paul Dawalibi:

want to chime in, you don't have to live we just want to get through these quickly. League of

Paul Dawalibi:

Legends world's 2021 finals to be broadcast in cinemas across Europe. Now sit back, relax and

Paul Dawalibi:

enjoy the world's finals experience. So pretty self explanatory. World League, leagues 2021 World

Paul Dawalibi:

Championship Finals are going to be broadcast in 70 cinemas across Europe, you'll be able to go

Paul Dawalibi:

watch it in the theater with other people who loves this who hates this? Is this the right way

Paul Dawalibi:

to be using cinemas with esports? curious what you guys think? One minute or less? Let's go.

Jeff Cohen:

Do you go first?

Lindsay Poss:

Okay, yeah, I'll start. I think this is awesome. Mostly because I know league does a

Lindsay Poss:

lot of really cool stuff in worlds. That's kind of, I think it would be a really great experience

Lindsay Poss:

to see that on a huge screen. I've watched their YouTube videos of the opening ceremonies, I think

Lindsay Poss:

it's really cool. And I think there's a good chance for fans to go out and experience it in a

Lindsay Poss:

much bigger live or not live action but a much larger format. That's probably much more Congress

Lindsay Poss:

to actually being there than watching it on a laptop. So I think it's cool.

Jeff Cohen:

I agree. I think this is a good activation for cinemas to get you know the esports

Jeff Cohen:

demographic and get people in maybe on a night where they wouldn't be in. Get people back to

Jeff Cohen:

going to Movies tie in with gaming. I think it's great idea. Then Heather Blair with a cinema

Jeff Cohen:

esports sociation is working on some some stuff like this and kind of crossing over physical and

Jeff Cohen:

digital and, you know getting getting this esports demographic into movie theaters. I like it.

Paul Dawalibi:

Because my view on this is very simple. I never understood the whole idea of

Paul Dawalibi:

getting people into movie theaters to play games. It made no sense to me, right? Like the latency

Paul Dawalibi:

with these screens is horrible. Like, how do you wheel the gear in you could only do it with

Paul Dawalibi:

consoles really, like playing games in a theater? made zero sense to me. This makes a lot more sense

Paul Dawalibi:

for the movie theater, right? Way to get fill seats, probably on nights where you know, it's

Paul Dawalibi:

otherwise a bit more empty. And it makes a lot of sense because you get you know, 100 people in a

Paul Dawalibi:

room who all want to watch the league. And it's I'm sure a very fun experience. The The reality

Paul Dawalibi:

though, is for League, this probably doesn't move the needle at all right? Like 70 theaters, is what

Paul Dawalibi:

like, at best 7000 people or something like that, like for the tournament that will get like 100

Paul Dawalibi:

million people watching, right? This is not like

Jimmy Mondal:

an oh my god, the vibes are kind of weird, right? Like if you're gonna be watching a

Jimmy Mondal:

match with two teams going up like if you're watching a football game you want to be like

Jimmy Mondal:

standing or maybe with a drink in your hand like cheering like talking to people. You don't really

Jimmy Mondal:

want to be sitting semi quiet in a theater

Paul Dawalibi:

dark. Yeah,

Jimmy Mondal:

yes, guys, guys, people something someone gets up blocks the screen like

Lindsay Poss:

even vendor one of those theaters where they serve beers and chicken tenders

Jeff Cohen:

even drink

Jimmy Mondal:

that's what I mean by Oh, but this is what I'm saying. Like just my people not, you

Jimmy Mondal:

know, like, I think it's cool. Like why not have it at theaters but you know, just the vibes I

Jimmy Mondal:

would rather go to a bar and watch like a match seems more par for the course. But you know, it

Jimmy Mondal:

could be cool.

Paul Dawalibi:

I I'm curious if the theaters are paying for it, because to me that would make sense

Paul Dawalibi:

to be able to broadcast these things because they benefit more weight says I'd like to go to that. I

Paul Dawalibi:

do agree. It's cool. Wait, it'd be a cool way to find others with similar interests also agree. All

Paul Dawalibi:

right, let's move on guys. This one's cool story. 10 sent to establish gaming studio believed to be

Paul Dawalibi:

related to metaverse. Supposedly Tencent is going to make a big bet on the metaverse and they're

Paul Dawalibi:

looking to build what they call an advanced gaming studio for that specifically, the codename is f1.

Paul Dawalibi:

It'll be under temi. And that they're hiring dozens of employees for projects that are

Paul Dawalibi:

obviously Metaverse related. So Tencent, not letting Facebook run away with this Metaverse

Paul Dawalibi:

thing from the sounds of it, right. I don't know if you guys have any other conclusions from this.

Paul Dawalibi:

But Facebook is not going to be the only Metaverse player.

Jeff Cohen:

Well, my only take from this is like Jeff good. Nah, like I don't even know like what

Jeff Cohen:

we have to say like it's like, did we think Tencent wasn't gonna have a Metaverse play? roms

Jeff Cohen:

that's yours. Why not like having a big reaction? And just on the Facebook part, did you guys see

Jeff Cohen:

Facebook is investing $10 billion in this Metaverse like they are putting their money, you

Jeff Cohen:

know, where their mouth is saying that they're investing $10 billion on Facebook. I mean, that is

Jeff Cohen:

insane.

Jimmy Baratta:

That was definitely a big part of the conversation last week when I look at Tencent

Jimmy Baratta:

hopping in here now. I'm like, great. So I mean, cool for anyone in North America, Europe, etc. But

Jimmy Baratta:

like, they're gonna create a Metaverse for all their Chinese users to hop in for their limited

Jimmy Baratta:

one hour on a Saturday and then get banned from like, order, you know, like, how am I going to

Jimmy Baratta:

order my Chipotle? What are my metaphors because I've already spent my two hours of the day so they

Jimmy Baratta:

got to do something because that stocks taking a beating. And this is definitely the right move.

Jimmy Baratta:

We've praised Tencent in the past, but that was before you know, regulatory issues changed in that

Jimmy Baratta:

part of the world. So I don't see how this makes a lot of sense unless they're expecting another

Jimmy Baratta:

change or a change back or I don't know or to tap into their other markets.

Jimmy Mondal:

I think yeah, I think you bring up a great point right with the with the regulations

Jimmy Mondal:

the way they are in China, who owns Roblox

Paul Dawalibi:

it's its own company, its problem

Jimmy Mondal:

is its own thing. Is it like China, I think, right? And you have Epic Games and

Jimmy Mondal:

fortnight and that's all Chinese money too. And they're all developing meta versus maybe they're

Jimmy Mondal:

just coming out with that solution for these multiple metaphors, because they already own all

Jimmy Mondal:

this shit anyways. They're like, we're just gonna put it in a box and then present it to our

Jimmy Mondal:

audience on a Saturday afternoon for one hour, but you don't I mean, what we Praise

Paul Dawalibi:

Tencent so much on this podcast was no one just totally underwhelmed by this, it was

Paul Dawalibi:

the second most underwhelming story of the week next to the pokey main one. And because

Paul Dawalibi:

fundamentally, it's like, Facebook comes out says or read or changing our name. We're spending $10

Paul Dawalibi:

billion. We're hiring 10,000 employees and 10 cents responses. And we're gonna call this thing

Paul Dawalibi:

f1. We're gonna hire a couple dozen people. And we're gonna do something with this Metaverse

Paul Dawalibi:

thing, it feels a little half, like a little lackluster, a little half hearted here. Do they

Paul Dawalibi:

really buy into this? I don't know. Is this just kind of a reaction?

Lindsay Poss:

Don't you think that they could just be holding it closer to the best two, though? I

Lindsay Poss:

mean, they've undergone a lot with Chinese regulators in the past

Paul Dawalibi:

through. But if you're gonna mobilize 10,000 Chinese developers, I feel like

Paul Dawalibi:

that's hard to hold close to the vest. If you're hiring 10,000 You know, yeah, maybe maybe, maybe

Paul Dawalibi:

it's just secret. Let me read these comments quickly. And then we'll move on. Wait says this

Paul Dawalibi:

would be great at Alamo Drafthouse. Well, that like I was gonna bring up Alex's point here,

Paul Dawalibi:

Buffalo Wild Wings does show esports and they did say they were going to show more esports at their

Paul Dawalibi:

locations. Okay, let me just, I'm going to skip that one because that was not that interesting. We

Paul Dawalibi:

got two more here in the lightning round. Two quick ones. This one Sony patenting a technology

Paul Dawalibi:

that enables stream viewers to kick players from games. It I mean, it's totally self explanatory. I

Paul Dawalibi:

don't even need to read you anymore. The article. If you're in Twitch chat or whatever, people can

Paul Dawalibi:

vote to kick people who are in the game that they're watching from the game. Anyone think this

Paul Dawalibi:

could be total disaster? Or is it genius?

Jimmy Mondal:

I'm ready. I want more Hunger Games style games, man like more audience interaction

Jimmy Mondal:

did mess with these people constantly. The top streamers put them on an island was make it happen

Jimmy Mondal:

tomorrow. Like

Paul Dawalibi:

I would you could imagine how this really is gonna be hard for big streamers, right?

Paul Dawalibi:

Oh,

Jimmy Mondal:

awful. Imagine being x QC. You're you can't play anything ever, ever again. You just

Jimmy Mondal:

get kicked. You get paid to get kicked off of games. If that's gonna be your job to have fun.

Jimmy Mondal:

Like you can play.

Paul Dawalibi:

Lindsay You had something? Oh,

Lindsay Poss:

yeah, it's gonna be totally awful. But also really fun. There's not gonna be between

Lindsay Poss:

gonna be like, Oh, we pulled it up. And it was average. It's gonna be like that was the worst or

Lindsay Poss:

that was the best.

Jimmy Baratta:

Definitely a lot of room for abuse. I think what it also opens the door for in the

Jimmy Baratta:

metaverse kind of theme is voting kind of like that X factor America's Got Talent type of

Jimmy Baratta:

television shows. But with gaming, right? Where maybe we're watching someone game. And the

Jimmy Baratta:

audience has that live voting enabled. But but you know, I'm not sure where they'll take it. It

Jimmy Baratta:

sounds dangerous, just just from what we're reading now.

Paul Dawalibi:

Well, there are games that have done that and done that successfully, where you

Paul Dawalibi:

could vote for good things to happen or things to change in the game. This is the first time and I

Paul Dawalibi:

don't know why they needed a patent for this. There's I'm not sure everyone's gonna rampantly

Paul Dawalibi:

try and copy this. But it's the first time there's a patent for being able to kick someone from a

Paul Dawalibi:

game.

Jimmy Mondal:

Yeah, the patent is actually for the foot that materializes next year, kicks you out of

Jimmy Mondal:

the game. That's what they have done.

Paul Dawalibi:

All right. This is the last story where we're gonna do guys and we'll end on a high

Paul Dawalibi:

note here with Gamestop are good friends at GameStop. And it's another Metaverse story.

Paul Dawalibi:

Gamestop enters the metaverse with web three, gaming job posts and web three gaming in quotes

Paul Dawalibi:

because that's that's what they called it. The video game store is hiring an Aetherium specialist

Paul Dawalibi:

after teasing an NFT marketplace in May. game stops looking to build an Aetherium based web

Paul Dawalibi:

three arm according to a job listing posted by the company. They're looking for someone with

Paul Dawalibi:

experience with Aetherium NF T's and blockchain based gaming platforms for its head of web three

Paul Dawalibi:

gaming role. It outlines a Metaverse, guests future for the gaming industry where games are

Paul Dawalibi:

places you'll go. And blockchains will power the calm the commerce beneath now. Other than buzzword

Paul Dawalibi:

soup. How do people feel about game stops hiring a web three? This is also the latest sort of

Paul Dawalibi:

iteration of Metaverse that people calling it web three.

Jeff Cohen:

Yeah, it's such a new buzzword like all these people. Web three is fine. I guess

Jeff Cohen:

that's the new thing we're gonna have to talk about. How does one become a web three gaming

Jeff Cohen:

specialist I'd like to throw that on my LinkedIn along with invest I made the joke I'm going to put

Jeff Cohen:

investor in FaZe Clan now in my in my

Paul Dawalibi:

no owner, owner owner owner face

Jeff Cohen:

yeah, owner. I mean Kyler Murray. Yeah, I mean, look, you know, GameStop missed web

Jeff Cohen:

one, I think for gaming so you know, good on them skeptic now to to web three. Look, I think it's a

Jeff Cohen:

good thing that they're doing that they're trying to do this. I don't know what this project is

Jeff Cohen:

going to look like. But I guess it's the right direction for them to be at least trying to pivot

Jeff Cohen:

the company towards.

Paul Dawalibi:

I mean, I'm assuming instead of putting a Chipotle in Roblox, they want to put a

Paul Dawalibi:

Gamestop in Roblox or they want Gamestop to be the place where you go buy NF T's I don't know,

Paul Dawalibi:

there's a few ways to slice and dice this.

Jimmy Mondal:

Instead of selling Funko Pops, you're gonna sell NF T's, a Funko Pops. Exactly. I

Jimmy Mondal:

can't think of a way to incorporate it in a smooth way. But YES.

Paul Dawalibi:

Jimmy Lindsey, any thoughts on this before we wrap up here?

Jimmy Baratta:

They got to do something or that stocks going back down to $4? Yes, that's all I

Jimmy Baratta:

could say.

Lindsay Poss:

It's gonna say

Paul Dawalibi:

at least they're trying something. Is this just lip service in your minds, then? This

Paul Dawalibi:

is feels like a press release? Only?

Jimmy Baratta:

I mean, it could they there could be something there. I think I'm sorry.

Lindsay Poss:

No, I just same thing. Like, I feel like we have the same like they're doing

Lindsay Poss:

something. They've studied commerce at some point in some way. I guess this is it.

Paul Dawalibi:

Guys, I'm going to wrap up this week's show. We do have to do this. Because it's

Paul Dawalibi:

everyone's favorite segment. What are we playing this week? I will give everyone an out if you were

Paul Dawalibi:

out of town this week. And I know, most of us were, instead of saying what you played this week,

Paul Dawalibi:

because chances are you played nothing. It's what did you learn this week?

Jeff Cohen:

That's even more difficult. Great.

Paul Dawalibi:

Is it more difficult?

Jeff Cohen:

What did I learn? I can't think I can't think on the fly. Like I learned

Jimmy Mondal:

last time. Jeff over here is a learned man. No.

Jeff Cohen:

It's so smart. Like I learned. Last time I learned was my days up at school in Boston,

Unknown:

just came out.

Jeff Cohen:

I was intentional.

Lindsay Poss:

I can I can start. Go ahead, Lindsay. I went to a really awesome panel with two

Lindsay Poss:

people from McLaren, who at the esports Business Summit, who are working on the crossover between

Lindsay Poss:

kind of gaming as a form of marketing, and racing. And it was really awesome. So it's really cool to

Lindsay Poss:

hear from them and how they're utilizing things like Twitch streams and games. And by having their

Lindsay Poss:

drivers actually do interactive kind of media and content with their audience as a way of bolstering

Lindsay Poss:

their own fan base. And so that was a really cool talk. And I am looking forward to see you more of

Lindsay Poss:

what McLaren does.

Paul Dawalibi:

Very cool. Jeff, come on, you can think of something.

Jeff Cohen:

You know, I've been on the road so much. I mean, the last two, two and a half weeks,

Jeff Cohen:

I've literally been in Vegas twice, Austin, and then Atlantic City. So like, today, I literally

Jeff Cohen:

need to like sit down and put my brain back together and fear because I've learned I have been

Jeff Cohen:

on so many bit on like five different panels watched 100 and had been for literally five

Jeff Cohen:

different conferences so and met so many different people. So I literally need to sit down and be

Jeff Cohen:

like, Okay, what have I actually learned, but I don't have anything right now. And this sec. Just

Jeff Cohen:

just so much so much,

Paul Dawalibi:

Jimmy B.

Jimmy Baratta:

That's a cop out.

Jeff Cohen:

That's a cop and I played Madden, I lead with that.

Jimmy Baratta:

I learned so much. I learned a lot about Formula One and respecting the race. I

Jimmy Baratta:

learned a lot about the Austin community. You know, I learned that butter cake tastes so much

Jimmy Baratta:

better when Jeff's not around.

Jeff Cohen:

I don't eat at all.

Jimmy Baratta:

And I played a lot of mobile which Paul he's gonna force mute me, Clash Royale for

Jimmy Baratta:

anyone else that plays. They just released a hero's mode and it's pretty cool. So I'm very, you

Jimmy Baratta:

know, I wasn't able to play new worlds, but I got back into clash. So I was happy about that.

Paul Dawalibi:

Jimmy M.

Jimmy Mondal:

found success on tick tock again this week. Whoa. Yeah, no, that was good. Yeah,

Jimmy Mondal:

we're just messing around with either way. Follow us on tick tock. Where can they fault where should

Jimmy Mondal:

they talk? Metaverse TV, you can't miss it. There's lots of great stuff happening everyday

Jimmy Mondal:

lots of videos probably like five or six videos go up every single day. So stay tuned. It's a lot of

Jimmy Mondal:

good stuff. Apart from that. Yeah, we like figured out a new way to do our thumbnails this weekend.

Jimmy Mondal:

It's working fantastically so that's cool. I played some Diablo two resurrected when apparently

Jimmy Mondal:

there's hundreds of 1000s of people playing the Diablo two at the same time. And so Activision has

Jimmy Mondal:

put a cue into the game. I don't buy their bullshit. Yeah, I don't buy it at all. There's no

Jimmy Mondal:

way that in an off people are playing new world that are playing DTR that you need to keep there's

Jimmy Mondal:

no way so I am kind of furious at them for that I didn't get to play for like a lot of the weeks

Jimmy Mondal:

because there was cubes that wouldn't move, the servers weren't working on console, you can't even

Jimmy Mondal:

make private lobbies anymore. And they're just not addressing it. I think they made their money in

Jimmy Mondal:

the route. It's the highest. It's the fifth highest selling game of September. So I think

Jimmy Mondal:

they're done. Other than that, it was a good week. Yeah.

Paul Dawalibi:

What did I learn this week, I will say, I'm going to probably do a video, a short

Paul Dawalibi:

video around something I talked about on my panel at esports business summit this week, because I'm

Paul Dawalibi:

so fed up of hearing the word authentic and authenticity that I want to I want to sort of I

Paul Dawalibi:

want to change the narrative around that word in gaming and esports. So stay tuned, I'll probably

Paul Dawalibi:

record a short little video on my thoughts on that. And I don't know if we can get some of the

Paul Dawalibi:

footage from the conference itself. But I have a whole I have a whole bunch of other ideas on that.

Paul Dawalibi:

So that's one thing that came out of the last week for me. Yeah, and I think just for anyone who's

Paul Dawalibi:

not following us on all the business of esports socials, or some of our other social accounts, we

Paul Dawalibi:

have a ton of other content that we're starting to put up very regularly now. Betting related like

Paul Dawalibi:

esports Betting related content, daily news content, like not just business news, but gaming

Paul Dawalibi:

news in general. And so there's, I would really love for fans of the business of esports and those

Paul Dawalibi:

of you who consume our content, if you go check out some of the other stuff. I would just love

Paul Dawalibi:

feedback on the other stuff. If you guys are loving it the things you want to see things you'd

Paul Dawalibi:

love to see dude done different. Your feedback is always super welcome. And we love doing this. So

Paul Dawalibi:

make sure to follow us on all those socials guys. Like, like Jimmy said Metaverse TV on tick tock.

Paul Dawalibi:

We're putting up a ton of content there. But also just all the business of esports socials

Paul Dawalibi:

everywhere you follow us. That wraps up this week's weekly news show guys. Thank you all who

Paul Dawalibi:

showed up everyone in the chat. Lindsey, Jeff, Jimmy, Jimmy, all of you guys. Thank you. As

Paul Dawalibi:

always. Stay tuned for the podcast this week. We're sorry. Last week's episode took so long to

Paul Dawalibi:

go live. It's because we were all out of town. So definitely check out both episodes even though

Paul Dawalibi:

they're both dropping this week. And as always, we will see you guys next Wednesday.

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