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12. Metaverse Religion, McDonald's Virtual Trademarks, GTA NFT, Gala Games $5B Spending, Sequoia Polygon Investment
Episode 1214th February 2022 • META Business • Holodeck Media
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In this episode, we discuss faith and worship in the metaverse, McDonald's filing trademarks for virtual goods and restaurants, Take-Two Interactive considers bringing NFTs to the world of Grand Theft Auto, Gala Games' plans to spend $5 billion in order to expand its NFT offering, Sequoia Capital India leads a $450 million investment round in Polygon blockchain, and so much more!

Episode 12 Keywords: Faith, Worship, Metaverse, McDonald's, Trademarks, Virtual Goods, Virtual Restaurants, Take-Two Interactive, Grand Theft Auto, NFTs, Gala Games, Sequoia Capital India investment, Polygon blockchain

Transcripts

Unknown:

Welcome to the metaphysics podcast. The Metaverse and web three are bringing about the

Unknown:

biggest revolution since the internet itself. With your hosts Paul the prophet Dawalibi And Jeff the

Unknown:

juice Cohen. We will be bringing you the latest Metaverse, business news and insight into what it

Unknown:

all means. The meta business podcast starts now.

Paul Dawalibi:

From the boardroom to the metaverse. This is the meta business podcast. I am

Paul Dawalibi:

Paul Dawalibi. I'm joined today by my friend and co host, Jeff, the juice Cohen. For those of you

Paul Dawalibi:

who are new to the meta business podcast. What we do here is we cover the biggest Metaverse, topics

Paul Dawalibi:

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

Paul Dawalibi:

we analyze the business implications of everything happening in this Metaverse industry. Jeff, how

Paul Dawalibi:

you doing this week?

Jeff Cohen:

I'm doing good. I'm battle battle in here. Got a little little case of the COVID. So

Jeff Cohen:

you know if I started, middle, you know, a second time suck, and I podcasted through both of them.

Jeff Cohen:

So you did you know, hon Metaverse news never stops. And so we will always be here no matter

Jeff Cohen:

what. But yeah, definitely, you can probably hear it in my voice a little bit congested. But we've

Jeff Cohen:

just have so much going on that, you know, I couldn't take a week off. You never know who would

Jeff Cohen:

even get to replace me. I don't know if there's anyone who could.

Paul Dawalibi:

I mean, I mean, really the juice. No one can replace the juice. That's just the

Paul Dawalibi:

reality. Just like no one can replace the Prophet. You can't replace greatness like that. Sure. I

Paul Dawalibi:

will say congratulations, by the way. 12 episode, this is episode 12. And every episode has been the

Paul Dawalibi:

audience has been bigger than the last. So thank you all for tuning in every week, we really

Paul Dawalibi:

appreciate it. I know I've gotten a lot of great feedback from people that you guys are really

Paul Dawalibi:

loving the content. And Jeff and I really love doing it. So, Jeff, let's jump into some Metaverse

Paul Dawalibi:

news this week. I think I have to start with it's maybe become sort of this shows. Hallmark, I would

Paul Dawalibi:

say is I've got to jump into something that's maybe the most important Metaverse news this week.

Paul Dawalibi:

Nevermind the $5 billion of investment or five and a half billion dollars in investment. This story

Paul Dawalibi:

definitely took the cake for me. The headline here is faith in the metaverse a quest for community

Paul Dawalibi:

and fellowship, and the articles talking about how some churches and in this case they were using a

Paul Dawalibi:

Mormon church as an example that some churches are turning to the metaverse and VR as a way to

Paul Dawalibi:

deliver service services to their congregation. So it says here ranging from spiritual meditations

Paul Dawalibi:

and fantasy worlds, to traditional Christian worship services with virtual sacraments. In hyper

Paul Dawalibi:

realistic church like environments. Their devotees, says, say the experience offers a

Paul Dawalibi:

version of fellowship that's just as genuine as what can be found at a brick and mortar temple.

Paul Dawalibi:

And then they have a quote here, which was the most I liked it, the most important aspect to me,

Paul Dawalibi:

which was very real, was the closer connection with God that I felt in my short time here. This

Paul Dawalibi:

is the quote from the founder of something called from VR Church, which was founded in 2016 by DJ

Paul Dawalibi:

Soto, a former high school teacher and pastor, and and there's images here, which if you're watching,

Paul Dawalibi:

if you're listening, unfortunately can't see it. But images here of some of the virtual worlds, and

Paul Dawalibi:

Pastor DJ Soto who started VR church, I'm curious, Jeff, short, man, yeah, we won't spend too much

Paul Dawalibi:

time on this. But as we see, and we I think we've used the first story now in almost every episode,

Paul Dawalibi:

as it is a great example of the metaverse and VR and these concepts infiltrating aspects of our

Paul Dawalibi:

lives that maybe we wouldn't expect. Where do you put worship and church? On this list of sort of,

Paul Dawalibi:

did you expect the metaverse to get there that, you know,

Jeff Cohen:

we're gonna have religions and I'm interested more to see, you know, the first

Jeff Cohen:

Metaverse only religion or something like a Metaverse cult, which maybe would be more more

Jeff Cohen:

exciting. But you know, this is this is actually I think this is sort of a creative way for you know,

Jeff Cohen:

this, this church to reach out to a larger congregation. And we've seen in the in the 90s and

Jeff Cohen:

early 2000s. Even now, like televangelists have made hundreds of millions of dollars like

Jeff Cohen:

broadcasting on on TV and getting in front of a bigger audience. A lot of them I would say are a

Jeff Cohen:

little bit sleazy and maybe frauds, but it makes sense. I mean, I bet this is gonna catch on. And

Jeff Cohen:

it could bring in a new audience or a younger demographic to the church, and then maybe you

Jeff Cohen:

typically see. So kudos to the church for for kind of being innovative. But yeah, I'm waiting for the

Jeff Cohen:

first metaverse. I think that's going to be going to be interesting that the Branch Davidians of the

Jeff Cohen:

of the metaverse or something like that will be entertained.

Paul Dawalibi:

The good news is, if you drink the Kool Aid in the metaverse, you'll be fine.

Jeff Cohen:

That's your avatar only die.

Paul Dawalibi:

Your, your your avatar may suffer, but you'll be fine. No, but seriously, like from a

Paul Dawalibi:

business standpoint, I think one of the reasons the business of religion has declined in years,

Paul Dawalibi:

right, like attendance, things like that. Right. Some of the, the specific numbers around religion

Paul Dawalibi:

have declined, is because, at least anecdotally, I think there's this sort of barrier, right, which

Paul Dawalibi:

is you have to go and it's only on a Sunday morning. And, and, you know, if you don't make it

Paul Dawalibi:

for that one hour, you sort of miss I'm talking in this case, Catholic church, but you know, all

Paul Dawalibi:

religions sort of have the schedule around around services and things like that. But does the

Paul Dawalibi:

metaverse potentially bring religion back in a serious way? Or bring maybe people who had not

Paul Dawalibi:

considered religion before back as sort of a customer? Because it's so easily accessible?

Paul Dawalibi:

Right, I can be in my I can be in my underwear on my couch, on a Tuesday evening. And I don't have

Paul Dawalibi:

to put my suit on on a Sunday morning.

Jeff Cohen:

Yeah, I mean, I guess talking a little more abstractly, we're definitely we're talking

Jeff Cohen:

about religion a little bit as a business, which is, which is interesting. Just in general, fair, I

Jeff Cohen:

think just in general, when you whenever you widen distribution and create more accessibility and

Jeff Cohen:

engagement, you're going to see sort of metrics like that go up, and you're going to see people

Jeff Cohen:

coming more often and, and getting more involved and kind of widening the distribution. So short

Jeff Cohen:

answer, yes. Do I think this is gonna change religion as we know it? Probably Probably not. But

Jeff Cohen:

I think someone like this is innovative and could find a little bit of a following, and certainly

Jeff Cohen:

grow their their congregation more than they would, if you will.

Paul Dawalibi:

It's funny, and the one the last, I'll end on this, and then we'll move on. But if

Paul Dawalibi:

you look at every pop culture kind of portrayal of the metaverse was whether it's a book or a movie,

Paul Dawalibi:

for the most part, there's always a, you know, a messianic or like a worshipped figure who's sort

Paul Dawalibi:

of like the master of the metaverse, so to speak, like a Christ like figure, whether you're talking

Paul Dawalibi:

about sort of like the matrix or Ready Player One, or, you know, all these modern portrayals of what

Paul Dawalibi:

we might call meta versus it's interesting, because I wonder if that's where we do end up

Paul Dawalibi:

right.

Jeff Cohen:

Are you saying someone's gonna create someone's gonna create a religion around that

Jeff Cohen:

figure?

Paul Dawalibi:

Yeah, or, you know, some someone who's a leader in this in these virtual worlds

Paul Dawalibi:

because they're either a leader of a company or whatever, becomes almost like a, a religious

Paul Dawalibi:

figure who is worshipped. If they have some, some hand in the creation of this Metaverse, right? You

Paul Dawalibi:

almost create a potentially messianic figure. Because we're creating a whole new universe a

Paul Dawalibi:

whole new world, right? Yeah, it's interesting. And it'll be interesting to see how, you know,

Paul Dawalibi:

traditional religions compete in the same way. A lot of traditional industries will have to

Paul Dawalibi:

compete. Let's move on to McDonald's McDonald's in the news, and, and, you know, we talked about

Paul Dawalibi:

McDonald's in the, in the context of Elon Musk, if you remember. But this McDonald's story I thought

Paul Dawalibi:

was interesting. And the headline here is McDonald's files trademark for Metaverse based

Paul Dawalibi:

virtual restaurant. So they've applied for a trademark for virtual goods, services and virtual

Paul Dawalibi:

restaurants and cafes. You know, their expectation, I guess, is that they will need to

Paul Dawalibi:

operate potentially McDonald's restaurants and virtual worlds, so they want to make sure they own

Paul Dawalibi:

the name. This follows Panera has filing for Panera verse. And other big companies like Nike,

Paul Dawalibi:

Walmart Skechers, who have all made similar filings in the past. It says here, this in this

Paul Dawalibi:

Forbes article, it says when you see this critical mass of large companies making this many new

Paul Dawalibi:

trademark filings, it's very clear, this is coming. Do you buy this? Jeff, one of the things

Paul Dawalibi:

here says, you know, every brand is gonna make a filing like this within the next 12 months. So

Paul Dawalibi:

first of all, do you buy that piece of it?

Jeff Cohen:

I think I saw I do by that. I mean, you know, every time you use words like every it's

Jeff Cohen:

it's hard to necessarily get on board with that. But you're seeing this 100% It's it. Brands are

Jeff Cohen:

moving to the metaverse totally believe that. And I'll sort of give a little bit of both sides to

Jeff Cohen:

the story because I kind of see both sides. On on one hand I mean, it's it's a little bit like when

Jeff Cohen:

the internet first started, I mean every brand needed to eventually create a website. Some did it

Jeff Cohen:

early. Some waited till very late, but you needed if you were a brand, you needed some sort of

Jeff Cohen:

presence on the worldwide web. If we assume that the metaverse is the next iteration of the World

Jeff Cohen:

Wide Web, the internet, every brand will need some sort of presence in the metaverse. I think I buy

Jeff Cohen:

that. That's a logical argument. The problem that where it breaks down for me is with a brand like

Jeff Cohen:

McDonald's, like I just don't see, like brands like Nike, brands, like Under Armour, something

Jeff Cohen:

where you're selling clothing, digital items, something people wear to represent themselves.

Jeff Cohen:

We've talked about this a lot. I'm fully on board with that. I think that makes all the sense in the

Jeff Cohen:

world that people are going to want to kind of show their show off their avatars were things in

Jeff Cohen:

terms of eating food in the metaverse like, I I'm not sure I see a need to eat food in a digital

Jeff Cohen:

world. But you, you don't digital worlds do not have the same constraints as physical worlds. We

Jeff Cohen:

don't really need to consume food in order to have our avatar, walk around and be in the world. Maybe

Jeff Cohen:

that will change which there will be resource management, stuff like that. I kind of hope it

Jeff Cohen:

doesn't because, you know, I just don't think it's a constraint we need to add into the world in the

Jeff Cohen:

metaverse. And even when McDonald's it's like it's a it's a fast casual restaurant or not investiga

Jeff Cohen:

it's fast food. Like there's nothing sexy about eating McDonald's. Like if this was some five star

Jeff Cohen:

restaurant wanted to create like a really cool virtual experience of like going to like a

Jeff Cohen:

Michelin star restaurant. I think I could get on board with that too. But there's just like nothing

Jeff Cohen:

cool about going to a McDonald's and eating a Big Mac. I don't know, tell me I'm wrong.

Paul Dawalibi:

Oh, look. On our sister podcast business of esports. We often have this argument

Paul Dawalibi:

of like esports teams pretending to be media companies and lifestyle brands. Right? Could you

Paul Dawalibi:

make the argument that this is McDonald's going? We're more than just fast food. We're kind of a

Paul Dawalibi:

lifestyle brand. Right? And therefore, we need to have a presence in the metaverse that is that is,

Paul Dawalibi:

you know, branded McDonald's. And and so that's my first sort of counter argument is, could you argue

Paul Dawalibi:

that Panera and McDonald's are actually lifestyle brands? And I'm sure the people in those marketing

Paul Dawalibi:

departments want to believe that they are right. And we could think that's silly. And we could

Paul Dawalibi:

think that's totally off base because they're fundamentally just the Egg McMuffin and Big Mac

Paul Dawalibi:

company, but like, they may see themselves as lifestyle brands and how they fit into people's

Paul Dawalibi:

lives may translate to the metaverse and it may not be about selling a burger in the metaverse,

Paul Dawalibi:

but it may be about selling McDonald's branded whatever, or giving away McDonald's branded

Paul Dawalibi:

whatever. The bigger sort of implication I saw from this is, and you brought up a great point in

Paul Dawalibi:

the early days of the.com era, right of web, what we're calling even web one, right? Most companies

Paul Dawalibi:

didn't go and like immediately secure their business. name.com. Right. But the reality is, a

Paul Dawalibi:

lot of companies were actually quite slow to doing that, because they didn't see the value. I see

Paul Dawalibi:

this interesting trend here where companies don't want to make that mistake sort of again, right.

Paul Dawalibi:

And there's there's a couple implications there, which I think are interesting one, you're going to

Paul Dawalibi:

get a lot of squatters, right, who listen to this podcast or read this news. And go wait a second.

Paul Dawalibi:

Now I'm going to go and try and squat on a whole bunch of, you know, names in the metaverse. That

Paul Dawalibi:

was my first thought. And then there's my second thought immediately after was, but wait a second,

Paul Dawalibi:

like what this means fundamentally, is that all the real estate conversations we've been having in

Paul Dawalibi:

the metaverse right are sort of meaningless, that the trademark here is way more valuable than

Paul Dawalibi:

owning a virtual person. piece of land like a.com, to me is like real estate. It's a virtual piece of

Paul Dawalibi:

land that you own and no one else can own right? But putting up something that looks like a

Paul Dawalibi:

McDonald's in the metaverse, you'd have to buy all the land to stop someone from putting that up. The

Paul Dawalibi:

trademark happens to be kind of a legal shortcut here that protects them from all meta versus

Paul Dawalibi:

right, whether it's decentraland or sandbox, so that they don't need to necessarily go make plays

Paul Dawalibi:

in each of these meta verses today. They know long term, they've protected their trademark in this

Paul Dawalibi:

general application.

Jeff Cohen:

I see what you're saying. I mean, we kind of need Jimmy on here to bring the legal, you

Jeff Cohen:

know, to dive deeper into the legal workings like I don't know how that would actually work. I guess

Jeff Cohen:

what you're saying is the brand is more important than then kind of the having the real estate or

Jeff Cohen:

you know them being first to market there.

Paul Dawalibi:

Is that what you're saying? What I'm saying is I think the brands are going to have

Paul Dawalibi:

an easier time. On one hand protecting They're their brands in the metaverse. And on the other

Paul Dawalibi:

hand, they have a harder time because this is far more decentralized than then the web is right?

Paul Dawalibi:

Like, the web has only one McDonald's dot com, right? Whereas in the metaverse today or this

Paul Dawalibi:

environment today, you're saying there'll be multiple McDonald's in this metaphor, there's 50

Paul Dawalibi:

Different meta verses right? And McDonald's if I'm the company is not going to go build a McDonald's

Paul Dawalibi:

in decentraland, and build a McDonald's and sandbox and build a McDonald's here and build a

Paul Dawalibi:

gun, right? Like, I don't know if that makes sense. Whereas, like, just trademarking the brand,

Paul Dawalibi:

for this application sort of gives them blanket protection, until the ecosystem has sort of sorted

Paul Dawalibi:

itself out.

Jeff Cohen:

So here's a quite more of an existential like a higher level question. Will

Jeff Cohen:

Will the brands that are popular kind of IRL slash even in web one, web two? will those be the brands

Jeff Cohen:

that dominate the metaverse, you think? Or will we see completely new brands? I suspect the answer is

Jeff Cohen:

probably a little bit of both. But where do you fall on that spectrum? Like, it's going to be

Jeff Cohen:

completely new brands native to the metaverse versus like, Hey, if you're a McDonald's, you're

Jeff Cohen:

going to come in, and you're going to be the virtual burger shop or, you know, virtual casual

Jeff Cohen:

restaurant, as I keep calling it fast, casual, fast food restaurant.

Paul Dawalibi:

I mean, it's a really good question, Jeff. And I think, you know, I'm

Paul Dawalibi:

guessing we agree on this, that there's probably, if you look historically at what happened with web

Paul Dawalibi:

one, web two, and we're talking about this as web three, like if history remains consistent, there

Paul Dawalibi:

will always be like this mixture, right, some old brands will make the transition successfully, will

Paul Dawalibi:

succeed will do very well. Some traditional brands will not make the transition and may fall by the

Paul Dawalibi:

wayside and they disappear. And then you will get sort of web three native brands that grew up there

Paul Dawalibi:

live there live and breathe that space and exist only there. It's definitely going to be a

Paul Dawalibi:

combination, right? McDonald's, trademark or not presence in the metaverse or not, is not going

Paul Dawalibi:

anywhere, right? Like if they say, We don't care about the metaverse. People are not going to stop

Paul Dawalibi:

eating Big Macs, right? That's just they can afford to miss this boat. Now. And I mean, from a

Paul Dawalibi:

present standpoint, from a marketing standpoint, that's more questionable. Do I think brands can

Paul Dawalibi:

just sort of close their eyes and say, We don't need to reach this audience? That I think is a is

Paul Dawalibi:

a bigger mistake. I don't know. Do you agree with that?

Jeff Cohen:

Yeah, no, I do agree with that. I actually think it's interesting that you're

Jeff Cohen:

talking you kind of right there, just at the end, sort of separated the marketing to people in the

Jeff Cohen:

metaverse versus actually being kind of present in the metaverse. Do you? Do you see that as a big

Jeff Cohen:

distinction? Or is that just something that popped into your head?

Paul Dawalibi:

It's, uh, you know, I know I'm gonna get comments from people saying it's like,

Paul Dawalibi:

purely semantic but like, McDonald's having a presence in the metaverse is a marketing

Paul Dawalibi:

activation, right? Like, they're not doing it to Sell Burgers in the metaverse. They're doing it

Paul Dawalibi:

to, you know, expose the brand to more people. So it is a little bit of just like us twisting

Paul Dawalibi:

language. But I think I genuinely do believe you're either there for commerce, or you're there

Paul Dawalibi:

for marketing like an exposure. And, and for McDonald's. They could probably miss the entire

Paul Dawalibi:

boat on the Commerce piece. And be fine. I think if they miss the boat entirely on the marketing

Paul Dawalibi:

piece and the exposure piece that that's where I worry.

Jeff Cohen:

Yep. It's almost as simple as your brands that are selling the avatars and brands

Jeff Cohen:

that are selling to people, right. So if you're selling stuff in the real world, it's on the

Jeff Cohen:

people. If you're selling stuff in the metaverse to be consumed in the metaverse avatars, I think

Jeff Cohen:

that will be an interesting distinction for brands as they enter the metaverse to kind of parse out

Jeff Cohen:

what their strategy is.

Paul Dawalibi:

Yeah, and and, you know, because a lot of, as we've seen, there's a lot of crossover

Paul Dawalibi:

too, right? Like Nike can sell a physical good, and the digital good. They can sell a good to a

Paul Dawalibi:

real human being and to an avatar. And so that strategy between that sort of, are we doing

Paul Dawalibi:

commerce or are we doing marketing, I think becomes an interesting conversation and seeing

Paul Dawalibi:

where all these brands land. I agree will be interesting to watch. Let's talk about Jeff, let's

Paul Dawalibi:

move on to the game that I think almost everyone listening or watching this show probably is aware

Paul Dawalibi:

of and that's Grand Theft Auto and Grand Theft Auto was in the news because their parent company

Paul Dawalibi:

sort of made a statement about the NFT opportunity. So the headline here is Grand Theft

Paul Dawalibi:

Auto game publisher, highly convinced and this is in quotes by NFT opportunity. Take two's

Paul Dawalibi:

optimistic view on the opportunity in NF T's also comes with caveats and caution around the crypto

Paul Dawalibi:

sectors. Speculative side and they have a quote from our friend Strauss Zelnick, who by the way

Paul Dawalibi:

was on the business of esports podcast. If you're don't know about the business of esports podcast,

Paul Dawalibi:

you should go check out that episode with Strauss Zelnick, who was amazing. But he said he was

Paul Dawalibi:

quoted in this article, he says, we're highly convinced there's an opportunity for NF T's to fit

Paul Dawalibi:

with take two's offerings in the future. He says, We believe in rare goods, we believe in

Paul Dawalibi:

collectibles. The concern we have is that there's speculation going on. We want to make sure that

Paul Dawalibi:

consumers always have a good experience every time they engage with our properties. And losing money

Paul Dawalibi:

on a speculation is not a good experience. So we're going to stay away from speculation. Stress,

Paul Dawalibi:

easily one of the most well respected people in all of gaming take to has been a very massively

Paul Dawalibi:

successful company, obviously, Jeff, what do you think of stress is very concise take here on NF

Paul Dawalibi:

T's and games? Well, I

Jeff Cohen:

think he's pretty spot. So first of all, you'll never hear me say bad thing about

Jeff Cohen:

stress. I feel like he he's pretty spot on about about most things he gives things on, and

Jeff Cohen:

obviously a very well respected person industry. I think he's I think he's right here. I mean, it's

Jeff Cohen:

very obvious. Gamers are willing to buy digital items they see value in digital goods,

Jeff Cohen:

collectibles, scarcity, these are things that are economic certainties. And I think he's right about

Jeff Cohen:

the fact that right now, the NFT market, and then of the gaming market, there's a ton of

Jeff Cohen:

speculation. And to his point, speculation is great when you're the person who buys low and

Jeff Cohen:

sells high, but it's not as great of an experience for the people who buy high and sell low. So I

Jeff Cohen:

think it's a smart way of saying, hey, there's a lot of froth in the market right now, we see that

Jeff Cohen:

there's something here, but we're not going to be the ones diving in at first sticking your neck out

Jeff Cohen:

and kind of ruining the experiences that we've tailored to consumers currently. I think it's very

Jeff Cohen:

similar to what we saw with EA. I think Strauss maybe said it a little bit more diplomatically and

Jeff Cohen:

intelligently, then that Andrew Wilson did. And, you know, he didn't have to walk back prior

Jeff Cohen:

comments, because I know we covered Andrew Wilson, EA CEOs take on last week's episode. So I think

Jeff Cohen:

he's right here. It is interesting to juxtapose it versus Ubisoft, which I know is probably the next

Jeff Cohen:

thing we're talking we'll talk about, but I don't know if there's anything more. I mean, I agree

Jeff Cohen:

with Strauss. I don't know if I can add even more to that.

Paul Dawalibi:

I mean, the question I have for you is, is this first of all? Well, first question, I

Paul Dawalibi:

think you're the one who told me on their earnings call. Correct me if I'm wrong that Strauss didn't

Paul Dawalibi:

make one mention of anything. metaverse.

Jeff Cohen:

I did in fact, I tweeted that actually at Jeff Cohen. 23. Give me a Yeah, I made sure I

Jeff Cohen:

did Ctrl F on the transcript before I tweeted it just to make sure I wouldn't look like an idiot.

Jeff Cohen:

No mention of the word Metaverse, which was pretty striking versus the last couple of earnings calls

Jeff Cohen:

that Activision EA, you know, Facebook, obviously, you know, analysts asking people talking about it.

Jeff Cohen:

No mention of it. I don't know if that is maybe just a signal of where we are in the hype cycle. I

Jeff Cohen:

think Facebook's earnings and then subsequent drop, even though it really had nothing to do with

Jeff Cohen:

Metaverse, maybe put a little bit of a damper in the buzzword. I think you have a little bit of

Jeff Cohen:

fatigue from people that are have jumped in with two feet, maybe? I don't know, what do you make of

Jeff Cohen:

that was just a coincidence?

Paul Dawalibi:

No, because I take that and I put it together with this article. Right? And I'm

Paul Dawalibi:

going and then the EA conversation we had last week and there's sort of this pattern now it seems

Paul Dawalibi:

to me of maybe most of these gaming companies really don't have any strategy or any, like any

Paul Dawalibi:

view whatsoever on where this is going and what they should be doing about it. Like what I'm

Paul Dawalibi:

seeing is a lot of very well constructed sound bites that say a whole lot of nothing. Again, I

Paul Dawalibi:

have the most massive respect for Strauss you know, a friend of the podcast like I think it's

Paul Dawalibi:

this was just a really an he is tremendously good at this. Like this was an incredibly polite and

Paul Dawalibi:

diplomatic way of saying basically nothing, right? Because the truth seems to be that almost every

Paul Dawalibi:

single one of these gaming companies and I'll throw even Activision Blizzard in there, right?

Paul Dawalibi:

That even the ones who gave a lot of lip service to the word metaverse. Most of them really don't

Paul Dawalibi:

know what they're doing. And I don't mean that they they're not smart. I mean, most of them have

Paul Dawalibi:

not formulated any kind of strategy around NF T's or the metaverse or how this affects and plays

Paul Dawalibi:

into their business, short term or long term

Jeff Cohen:

on NF T I think on NF T's you're absolutely right. metaverse. Depends how you

Jeff Cohen:

define Metaverse, because, you know, you could argue some of them are doing a lot of the things

Jeff Cohen:

you would do for them, like Grand Theft Auto Online, basically created 95% of what I would

Jeff Cohen:

consider a Metaverse 510 years ago. So like that, I don't know if I would necessarily agree with the

Jeff Cohen:

NF T's part, I think people got blindsided by it a little bit. I mean, I think NF kind of web three

Jeff Cohen:

gaming and ft gaming is really probably less than a year from a year old in terms of coming into the

Jeff Cohen:

mainstream, like, maybe over this past summer, people really started talking about Axi infinity

Jeff Cohen:

and the ability, like played around kind of crept into the mainstream consciousness. So in the span

Jeff Cohen:

of, you know, massive triple A publisher, and kind of like, how much these guys have going on. That's

Jeff Cohen:

a pretty short period of time to like, that's like one or two board meetings, you know what I mean?

Jeff Cohen:

Like, there are quarters like that's, that's a very short period of time to formulate an entire

Jeff Cohen:

kind of strategy. And there's something I was thinking when you were talking, I'm curious, do

Jeff Cohen:

you equate this like, was there a similar thing with esports, maybe 10 years ago, where the

Jeff Cohen:

attitude toward from publishers was like, we know, this is a thing. It's interesting. We're following

Jeff Cohen:

it. But we don't really know exactly how we're going to be involved, what we're going to do, but

Jeff Cohen:

we know it's important, and we're there, but we, besides that, we don't know what we're doing.

Jeff Cohen:

Because to me, it kind of feels similar.

Paul Dawalibi:

I agreed, I think super insightful. And, and I would I would extend that to just not

Paul Dawalibi:

just esports, right, like every fledgling tech related kind of industry feels like they have a

Paul Dawalibi:

moment like this where everyone recognizes there's something there. I guess what bothers me is it's

Paul Dawalibi:

it's a little bit of just the lip service, right? Like the the statements that say nothing, I just,

Paul Dawalibi:

I'm a I'm a as the Prophet, I'm the truth teller, in my mind, I would much rather them and I know

Paul Dawalibi:

this would never happen to Jeff, the IR guy would never allow this to happen. But like, I'd love the

Paul Dawalibi:

CEO to come out and be like, Look, we know this thing's interesting. We have no clue what we want

Paul Dawalibi:

to do with it yet. Right? Like, yeah, come back to us in two years, and maybe we'll have a good

Paul Dawalibi:

strategy. And I know that like, but that'll never happen. You'll never hear that. No. But that would

Paul Dawalibi:

make me happy. Because I do think that's sort of what's being said here. Just reading between the

Paul Dawalibi:

lines. Yes, that

Jeff Cohen:

is 100%. The translation. A lot better.

Paul Dawalibi:

The way stress said it did sound a hell of a lot better. I want to end here on two

Paul Dawalibi:

stories, I want to put them together. And I just think indicative of, again, the massive

Paul Dawalibi:

opportunity that's being presented in this space right now. The first one here, gala games to

Paul Dawalibi:

expand NFT offerings with $5 billion. It says here in the article since its launch in 2019 Gala

Paul Dawalibi:

games, has been growing steadily, the platform has 1.3 million monthly active users has sold 26,000

Paul Dawalibi:

and fts. The firm in this $5 billion in the $5 billion, they're going to assign here to these

Paul Dawalibi:

expansion efforts. 2 billion is going to be on gaming, 1 billion on music, 1 billion on movies,

Paul Dawalibi:

and the remaining 1 billion on the gala theme park and fts. Aside from the 2 billion budgeted for

Paul Dawalibi:

gaming, the firm also launched $100 million gaming fund with C two ventures, and they're going to

Paul Dawalibi:

invest in new blockchain games. So I just want to park that for a second, by the way Snoop Dogg is

Paul Dawalibi:

gonna miss out on this story. Like we could certainly have done the whole episode, which means

Paul Dawalibi:

then there was another story, which, you know, had we not read that one first would have just also

Paul Dawalibi:

been eyewatering. And this one is Sequoia makes a big bet on web three leading $450 million

Paul Dawalibi:

investment in polygon blockchain. And for those that don't know, polygon is a blockchain network

Paul Dawalibi:

that serves as a support layer to Aetherium. It says here polygon wants to become a decentralized

Paul Dawalibi:

version of Amazon Web Services. And obviously, it has attracted here, Sequoia, maybe one or the

Paul Dawalibi:

other than Andreessen Horowitz. Those two are maybe the biggest names in all of venture capital.

Paul Dawalibi:

And so polygon raising 450 million. Jeff, maybe just your general thoughts on both of these

Paul Dawalibi:

stories. I don't know if you want to start with the gala.

Jeff Cohen:

I mean, that's a coil was the polygon one is interesting. I mean, they're doing great. I

Jeff Cohen:

mean, they just hired Ryan White to kind of run their gaming, Polygon gaming business. It's pretty

Jeff Cohen:

similar how they're trying both these companies are trying to attract games to be built on top of

Jeff Cohen:

their platform. The goal one, I thought was a more interesting article. There's so little more

Jeff Cohen:

numbers. But one thing, the first thing that kind of sticks out to me is just the amount of money

Jeff Cohen:

flowing into this. The fact that it's 1 billion not 1 million, 1 billion with a B is going to be

Jeff Cohen:

invested into gala theme park and fts. That is a mind blowing amount of I don't even know what a

Jeff Cohen:

gala theme park NFT is, but I want to go start a company that builds them. Because there's a

Jeff Cohen:

billion dollars being funded on these things. that's mind blowing. And I think I tweeted this

Jeff Cohen:

saying like, would, too, with this much capital flowing into kind of the web three gaming space,

Jeff Cohen:

you're bound to see a few mainstream hits in the next call it 18 months, the knock that we've come

Jeff Cohen:

back to time and time again, with web three, gaming, Blockchain gaming is a games aren't fun.

Jeff Cohen:

And that has largely been true. So far, with this much money coming into the space, someone's going

Jeff Cohen:

to build a fun good game, where you're going to see a game that goes mainstream and blows up way,

Jeff Cohen:

way on a way bigger scale than an xe currently, the second number that strikes me and terrifies me

Jeff Cohen:

a little bit, when I'm thinking about this, is, if you scroll up a little bit for people watching, it

Jeff Cohen:

said 1.3 million now this time, million with an M, monthly active users on the platform. Yeah, that

Jeff Cohen:

is really, really, really low. If you think about the current, you know, smartphone, addressable

Jeff Cohen:

market, there's like 7 billion people with a smartphone. And the amount of money that's being

Jeff Cohen:

invested into mobile games right now is probably less than $5 billion in a year, maybe that that's

Jeff Cohen:

a little bit off. But the point is, there's a ton of money chasing a market that currently just

Jeff Cohen:

isn't that large. And I think we all are very bullish on it, and believe that the addressable

Jeff Cohen:

market will dramatically expand. But right now, this is a really, really, really niche market. And

Jeff Cohen:

there's going to be a lot of capital that's burn chasing, chasing this, because not every project

Jeff Cohen:

can work. But the addressable market

Paul Dawalibi:

isn't really that different here. I get they only have 1.3 million monthly active

Paul Dawalibi:

users today. But is gala games total addressable market, any different than Zynga has total

Paul Dawalibi:

addressable market? Or kings? total addressable market? Like, and I go back to your first point,

Paul Dawalibi:

which is, you know, one day we're going to make a good game, or, or it will, the the industry is

Paul Dawalibi:

going to prove one of my thesis I have, which is the as a function of being a, a blockchain based

Paul Dawalibi:

game, they're fundamentally just glorified pyramid schemes. And that means you have to make a game

Paul Dawalibi:

that allows for a pyramid scheme, and therefore the game may never be games may never be good,

Paul Dawalibi:

right? Like, yeah, I would love for you to be right here, Jeff, and that it's just a matter of

Paul Dawalibi:

someone being a little bit more creative. That gets a game to, you know, a billion users and, you

Paul Dawalibi:

know, wow, kind of longevity and success. And, and then it's, it just so happens to be a blockchain

Paul Dawalibi:

based game, and maybe gala games. This is where that $2 billion of investment in gaming goes, I

Paul Dawalibi:

don't know, right to solve those problems. But I'm a bit of a skeptic here. Also, I just where I'm

Paul Dawalibi:

not a skeptic, is I think the total addressable markets. No different, right? Well, anyone today.

Jeff Cohen:

So I think you're right, in terms of the total addressable market, if you define it as

Jeff Cohen:

gamers, then yes, but the question is, do you define the addressable market as anyone who

Jeff Cohen:

theoretically could go play a game on this, or anyone who's on the platform currently? Because if

Jeff Cohen:

I, if I were to ask you, if you were a Roblox developer, what is your addressable market? Would

Jeff Cohen:

you say, well, there's, you know, 12 billion people on the earth. So technically, they all

Jeff Cohen:

could play Roblox games. Or would you say, well, Roblox has 50 million? Da us? That's what the

Jeff Cohen:

addressable market is.

Paul Dawalibi:

I mean, that's different. You see my Gala. Because, yeah, I see your point. But gala

Paul Dawalibi:

here actually develops games, right? They're not, they're not necessarily just the platform for

Paul Dawalibi:

other people to develop games, right. So that, to me, the 1.3 million is across all the games that

Paul Dawalibi:

they've produced and distributed. I think it's it's not unreasonable to define the total

Paul Dawalibi:

addressable market for gala games as whatever the total addressable market is for mobile gaming.

Paul Dawalibi:

Right, like it made their own mobile games fundamentally, you know, the fact that they're

Paul Dawalibi:

blockchain based games in the background and you need a crypto wallet when you sign up. Doesn't to

Paul Dawalibi:

me change really the total addressable market that drastically so I think it's an interesting point,

Paul Dawalibi:

that the number is low. But obviously, the billions that are being spent is because they

Paul Dawalibi:

think this essentially consumes mobile gaming. That's That's my guess. Right? That has to be part

Paul Dawalibi:

of the thesis here. Yeah. And I would argue, with part with the polygon story that's got To be part

Paul Dawalibi:

of sequoias thesis as well right that whatever people are going to build on polygon has a total

Paul Dawalibi:

addressable market that is far beyond the narrow scope of web three as it stands today or crypto as

Paul Dawalibi:

it stands today now yeah person they chose to go to go help manage that that's a different that's a

Paul Dawalibi:

different issue. But this is you know, to me this is two totally different plays right polygons and

Paul Dawalibi:

infrastructure play gal is much, much more b2c Where I'm amazed with gala frankly, and I

Paul Dawalibi:

surprised surprised you didn't you jump on this because I thought you'd be bothered by this is

Paul Dawalibi:

like the billion dollars on music and the billion dollars on movies. When you're fundamentally sort

Paul Dawalibi:

of you're I mean, you're called gala games you're a gaming company they

Jeff Cohen:

clearly say You know, I can't take all the I can't take all the good the good juicy

Jeff Cohen:

things

Paul Dawalibi:

but you know, maybe they're gala games is just there's a learning here that maybe

Paul Dawalibi:

every game developer should be opening their eyes to right like maybe Activision Blizzard should

Paul Dawalibi:

have a a an equal like a proportionately large budget for for music and movies based on their IP

Paul Dawalibi:

in the same way gala games has allocated you know 40% of this $5 billion dollars to those two things

Paul Dawalibi:

I think is interesting so maybe they're just ahead of the curve and and and if the blockchain base

Paul Dawalibi:

games are leading the way in some of these things that to me makes me makes me less skeptical at the

Paul Dawalibi:

very least right Jeff like cuz we complain all the time Activision Blizzard should be making movies

Paul Dawalibi:

and TV shows. And now you've got a blockchain based gaming company that budgets $2 billion for

Paul Dawalibi:

this stuff. I knew a great article if we didn't applaud it and say, you know, good job, or at

Paul Dawalibi:

least a nice, good, good for you to try.

Jeff Cohen:

No, no arguments for me hear.

Paul Dawalibi:

That brings us Jeff to the end of the podcast. I feel like that flew by. For those

Paul Dawalibi:

of you who are enjoying it, please go leave a review on Apple podcasts on Spotify, Google Play

Paul Dawalibi:

wherever you get the podcast. leave a review helps other people to find the podcast, share it with

Paul Dawalibi:

your friends. We really appreciate it. Of course. We appreciate you listening watching, but we want

Paul Dawalibi:

to grow it as big as possible. Jeff, thank you as always, and see all of you guys next week.

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