Artwork for podcast META Business
18. Yuga Labs Huge Valuation, Metaverse Utopia, Security Risks, FTX Good Luck Games, Gamefam Roblox
Episode 1829th March 2022 • META Business • Holodeck Media
00:00:00 00:35:33

Share Episode

Shownotes

In this episode, we discuss Yuga Labs securing a $4 billion valuation after a $450 million raise, Zaha Hadid Architects developing a utopian digital world, the risks that come with companies entering the metaverse, FTX supporting Web3 Gaming and launching NFTs, Gamefam raising $25 million to build games in Roblox, and so much more!

Episode 18 Keywords: Yuga Labs, Zaha Hadid Architects, utopian digital world, metaverse risks, FTX, Web3 Gaming, NFT, Gamefam, Roblox

Transcripts

Unknown:

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

Unknown:

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

Unknown:

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

Unknown:

all means. The meta business podcast starts now. From the boardroom

Paul Dawalibi:

to the metaverse. This is the meta business podcast. I am Paul the Prophet Dawalibi.

Paul Dawalibi:

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

Paul Dawalibi:

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

Paul Dawalibi:

pressing, Metaverse, topics and news of the week, we look at all of it through a business and C

Paul Dawalibi:

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

Paul Dawalibi:

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

Paul Dawalibi:

I've seen many of you who have left reviews on our podcast. If you haven't done that already in your

Paul Dawalibi:

regular listener, go leave a review. let everyone else know how much you love the podcast. It's how

Paul Dawalibi:

other people find this on Apple podcasts or Spotify or Google Play or wherever you get this.

Paul Dawalibi:

And make sure to send an episode or two to a friend, a colleague, a co worker, whoever spread

Paul Dawalibi:

the word, let them know how much you're enjoying the meta business podcast. Jeff, how you doing

Paul Dawalibi:

this week?

Jeff Cohen:

Good, good. Ah, busy week. As always, I feel like I haven't talked to as much as maybe

Jeff Cohen:

maybe normal. But you know, the show show must go on here. This was where you are in the world. You

Jeff Cohen:

know, the show must go on.

Paul Dawalibi:

It has been an interesting week, I will say, you know, I get this feeling like every

Paul Dawalibi:

episode we're peaking right like we're hitting new peaks. I will say the last week's episode I

Paul Dawalibi:

thought was our best. If you haven't listened to that. If you haven't tuned into that one, go check

Paul Dawalibi:

it out. It would be episode 17. I really enjoyed it. And I think we should start Jeff with a bit of

Paul Dawalibi:

a. I don't know like I don't want to like a little bit of a throwback to last week's episode because

Paul Dawalibi:

we talked about yoga labs, and the board a yacht club, obviously in that episode buying crypto

Paul Dawalibi:

punks. But this week, we had I think an equally big and important story coming out of board a

Paul Dawalibi:

board a yacht club. That's a mouthful to say fast. And I'll bring up this first story here. board a

Paul Dawalibi:

yacht club creator raises 450 million to build an NFT metaverse. So we had discussed that their

Paul Dawalibi:

pitch deck had leaked last week, right? And people were sort of dissecting it. And it was

Paul Dawalibi:

interesting. But now we get all the details. So they've raised 450 million, obviously that we know

Paul Dawalibi:

they're buying crypto pugs, and it values yoga labs at $4 billion. I don't want to spend a lot of

Paul Dawalibi:

time on this. It's a good update to sort of the story from last week and to encourage you guys to

Paul Dawalibi:

go listen to last week's episode. But any thoughts on valuation here? sighs the raise?

Jeff Cohen:

We covered a lot of that last week where on the surface, it sounds like a lot, but we

Jeff Cohen:

think we were both pretty impressed with, you know, some of the numbers that were in that deck.

Jeff Cohen:

So you know, neither of us thought the 4 billion was that outrageous? Obviously good on them now

Jeff Cohen:

kind of getting that the tape? The No. The other thing that was interesting, I think they did a

Jeff Cohen:

drop, right, like a token drop a reviewer. You're seeing that this ad token?

Paul Dawalibi:

Yes. Yes. But only two owners? I think. Yeah, the priority was to owners of

Jeff Cohen:

Yeah, so basically, the way I understand it, right is if you owned an eight, you

Jeff Cohen:

basically got dropped these tokens, which adds a significant amount of value. So pretty cool, you

Jeff Cohen:

know, that the the early members of the community were rewarded for that, you know, buying in early

Jeff Cohen:

and got big allocations of those tokens. Look, I

Paul Dawalibi:

I've been privy to the deck. I went through it. And it's you know, there's definitely

Paul Dawalibi:

impressive things in there. Or they did, they did 137 million in revenue last year selling JPEGs

Paul Dawalibi:

like let's can can we call a spade a spade, right, like selling art, which is phenomenal, right at at

Paul Dawalibi:

huge kind of margins. So it's hard to it's hard to knock the $4 billion valuation. It's hard to poke

Paul Dawalibi:

holes in this. I think the one area where I worry about this is they a big part of their deck is

Paul Dawalibi:

this Metaverse project right to this game. They're building an MMO RPG like World of Warcraft style,

Paul Dawalibi:

obviously not in that universe. But it's a game right and a lot of this valuation I feel like in a

Paul Dawalibi:

lot of the future of this business hinges on this game being a success. And what scares me and this

Paul Dawalibi:

is my this is not a yoga lab specific comment. This is a industry wide general comment. Everyone

Paul Dawalibi:

sort of makes the assumption that building a huge really successful game is just sort of easy,

Paul Dawalibi:

right? Like, we just have to say we're making a game. And the game will be fun and successful. As

Paul Dawalibi:

if that's not like, incredibly, incredibly hard. And, you know, like most other forms of

Paul Dawalibi:

entertainment, right? For every one game that's for every fortnight or Wow, or any of these huge

Paul Dawalibi:

successes, there's 1000 games that are made that no one ever plays. I worry that so much of this

Paul Dawalibi:

valuation, and so much of this company's future really is hinging on the success of this game.

Jeff Cohen:

Well, it's an interesting point. I mean, that's something I was actually going to ask

Jeff Cohen:

you. And maybe you sort of already preempted that with the answer. But do you think the investors

Jeff Cohen:

investing in this are looking at UGA as gaming company, a media company, an IP sort of just

Jeff Cohen:

brand, or I guess, a tech company? Like what's the core advantage that they have?

Paul Dawalibi:

I can tell you, their deck really opens with none of those words, it opens with,

Paul Dawalibi:

we're all about culture, right? So it's a culture company. It's a meaning like, it's changing

Paul Dawalibi:

culture, it's changing society. And, you know, like the, they're tapping into sort of this, this

Paul Dawalibi:

cultural shift. And, you know, there's a lot of like that, at the heart of it, I think, reading

Paul Dawalibi:

between the lines, because they never actually explicitly say it. Almost this this company's

Paul Dawalibi:

future really is as a gaming company, right? It just so happened, it will just so happen to have

Paul Dawalibi:

this foundation of NF T's and blockchain and those kinds of things. But I think all of their success

Paul Dawalibi:

that really hinges on this game so hard to not call them a gaming company. Now, are they that

Paul Dawalibi:

today? Obviously not right, today? It's more I don't know what you would call it today. To be

Paul Dawalibi:

honest, it's the it's closer to an art gallery than a than any other business. Really. Yeah. So

Paul Dawalibi:

we'll see. I don't know, I'm not I have seen nothing about the game, right, obviously, hard to

Paul Dawalibi:

make judgment, but I suspect they're gonna find it's harder, especially the category of game. You

Paul Dawalibi:

know, we host the business of esports podcast also, which we spend all our time talking about

Paul Dawalibi:

gaming. MMO RPG is like the universe is littered with MMO RPG failures. Even New World right didn't

Paul Dawalibi:

work and that had Amazon behind it and a ton of hype early on. That is a really, really

Paul Dawalibi:

phenomenally difficult genre to go after. But if they succeed, for billions gonna seem like a, like

Paul Dawalibi:

a, like small like peanuts, right? Like, the sky's the limit if they do succeed, so I get I get the

Paul Dawalibi:

bet. All right, let's, um, let's move on. Let's talk about and this has come up. I think we've had

Paul Dawalibi:

some interesting conversations around this. It's good that you put this story in here to touch on

Paul Dawalibi:

the headline here inside plan for utopian Metaverse city that will have almost no rules or

Paul Dawalibi:

police. So an architecture firm has plans to design a Metaverse centering around self

Paul Dawalibi:

governance. Zaha Hadid architects, one of the world's most prominent architecture firms, has

Paul Dawalibi:

shared plans to develop a utopian digital world, according to a new report by CNN. Several

Paul Dawalibi:

illustrations of the futuristic and urban Metaverse, which by the way, if you're watching

Paul Dawalibi:

this, you can see them on screen if you're listening I'm sorry. Designated liber land I think

Paul Dawalibi:

that's the pronounce it. We're also shared by Zaha Hadid architects, curved buildings a city hall

Paul Dawalibi:

collaborative working spaces, shops and business incubators can be found throughout the virtual

Paul Dawalibi:

platform. Perhaps most notably, it says that architecture firms digital community will focus on

Paul Dawalibi:

self governing ideals based on Liberland. A micro nation founded in 2015, by Czech politician vit

Paul Dawalibi:

Jedlicka. It says if you start off with a clean environment and you don't throw garbage around

Paul Dawalibi:

that can be maintained without much policing. Zaha Hadid architects, principal architect Patrick

Paul Dawalibi:

Schumacher told CNN so, you know, we you and I have had this discussion. Should should the

Paul Dawalibi:

metaverse be sort of like international international waters. Anything Goes right. And it

Paul Dawalibi:

feels like that's the direction this is taking. I think there's also an other interesting

Paul Dawalibi:

conversation here around architecture firms getting involved in the design of Metaverse or

Jeff Cohen:

at that, I mean, they're true, incredibly well known.

Paul Dawalibi:

I'm so curious to get your thoughts on both of those.

Jeff Cohen:

Well, the first one is, or the second one is I guess we kind of hit that one verse a

Jeff Cohen:

little bit. Yeah, it's interesting, right? I think, you know, it's probably to be expected.

Jeff Cohen:

We've always said, you know, ever every business is eventually going to have to shift or have some

Jeff Cohen:

focus into the metaverse. So it may it makes all the sense in the world that a firm like da deed,

Jeff Cohen:

who their buildings in real life are pretty impressive. architectural feats like they're each

Jeff Cohen:

always like very unique and like they're not just like cookie cutter buildings. I know there's a

Jeff Cohen:

bunch of them in New York City, our city we both live. So yeah, it's pretty. It's pretty cool to

Jeff Cohen:

bring bring kind of that real world architectural experience to the metaverse to build some of these

Jeff Cohen:

cool, unique structures there. I'm not sure I understand the thread between what you know that

Jeff Cohen:

for bringing this whole libertarian, no police ideal, which is interesting. I mean, I don't know

Jeff Cohen:

from a legal perspective, how that will work is obviously it's one thing to say, hey, there will

Jeff Cohen:

be no laws in the metaverse and I guess the question is like, when we talk about policing, is

Jeff Cohen:

it like, Hey, you do something in the metaverse like, let's say I go and kill someone in the

Jeff Cohen:

medical digital avatar like, yep, technically, that's not illegal. When you kill someone in Grand

Jeff Cohen:

Theft Auto you don't the police don't come to your house and like, kill him and put you in jail.

Jeff Cohen:

Having said that, you know, then there are the questions of Okay, what if I steal your money?

Jeff Cohen:

Right? What if it's real money, you know, money that's in the metaverse, but it can obviously has

Jeff Cohen:

a Fiat, you know, element where you can transfer to fiat. If I steal your money in the metaverse.

Jeff Cohen:

Should there be a Metaverse police? Should there be this wild west where there's no laws? Or is you

Jeff Cohen:

know, law enforcement gonna come and say, Hey, you stole $100,000 from from the prophet like, now

Jeff Cohen:

you're going to jail? Like, I don't know where I fall on that. I'm curious. Start where you fall.

Paul Dawalibi:

i You said something I want to just key in before I answer that, which I think I

Paul Dawalibi:

hadn't thought of. But when you said it, I was like, Yeah, you're right. Like, what's the

Paul Dawalibi:

connection here between the architecture firm? And this idea of like a totally lawless metaverse.

Paul Dawalibi:

Seems weird. And then it got me thinking like, why do we need traditional architecture firms in the

Paul Dawalibi:

metaverse anyways? Right? Like, one of the things architects do is they work with engineers, they'll

Paul Dawalibi:

they'll come up with a design a shape, right, but they want to make sure that the building will stay

Paul Dawalibi:

standing, right? If you make a huge dome like that it's supported properly, right? It's all these

Paul Dawalibi:

kinds of building considerations, none of which apply in the metaverse, right, like almost none of

Paul Dawalibi:

the skill set other than the creativity involved with architecture. Literally, nothing applies in

Paul Dawalibi:

the metaphor. So I would argue we don't really need real world architects operating in the

Paul Dawalibi:

metaphors, if anything, the experience of a real world architect may limit what we do in the

Paul Dawalibi:

metaverse because you're sort of you're rooted in these ideas of physical, you know, metal and

Paul Dawalibi:

concrete and glass. So I thought that part was weird. But then I agree. It was also weird that

Paul Dawalibi:

like, why why? Why are they saying it has to be lawless? Like, what is? What are the art? What

Paul Dawalibi:

does the architect care about? How this Metaverse is policed? My my stance on this, I think

Paul Dawalibi:

continues to be it has to be, it has to be a completely open space. Now. You're right to bring

Paul Dawalibi:

up this idea of theft, right. But that, to me is no different than if you play a game, right? If I

Paul Dawalibi:

play WoW, let's say, and there's a bug that crashes my computer. I go to the developer of wow.

Paul Dawalibi:

And I say, hey, this bugs crashing my computer give me customer support, right? It's not a I

Paul Dawalibi:

don't. I don't like I'm not looking for the police to rectify the issue. And you're right, stealing

Paul Dawalibi:

real, like, in game currency that maybe has a like, if someone trades me something in Wow. And I

Paul Dawalibi:

pay way more for it, because he tricks me than what it's worth, like, should I should he go to

Paul Dawalibi:

jail for that crime? It feels it feels weird to connect virtual worlds in real worlds, from a

Paul Dawalibi:

criminal sense. But I do think there has to be some kind of recourse to solve problems like that

Paul Dawalibi:

with the developers and owners call it of these meta verses. I don't think it should just be well,

Paul Dawalibi:

you know, sorry. Like, screw you. You lost your money. There has to be some recourse but I don't

Paul Dawalibi:

think it should involve any kind of policing and definitely not real world police.

Jeff Cohen:

Yeah, I guess I guess it depends what what lines you're crossing, you know, I can stick

Jeff Cohen:

up scenarios that, you know, where issues occur in the real world based on interactions in the the

Jeff Cohen:

metaverse. You know, obviously, that that that becomes different. But you know, the examples you

Jeff Cohen:

said, Yeah, I don't think we're going to see a world where you're going to be bringing in like

Jeff Cohen:

the SEC to enforce, you know, transactions that occur in the metaverse. Having said that I am sure

Jeff Cohen:

that as more and more of commerce and just the economy moves into the digital world. You're going

Jeff Cohen:

to have these agencies and maybe there'll be some sort of Metaverse, enforcement agent See, you

Jeff Cohen:

know, the different countries will have. And you know, based on where the player is or like where

Jeff Cohen:

the players physical body is. There will be an enforcement agency that that kind of oversees

Jeff Cohen:

behavior and activity in the metaverse. Right. I mean, you wouldn't have thought that for social

Jeff Cohen:

media. But you know, you do have that not? Well, so we don't have that for social media. No, but

Jeff Cohen:

you we do you know, there are rules and laws and like, hate speech and cry, like, you know, there

Jeff Cohen:

are things you can say on the internet

Paul Dawalibi:

that you can get controlled by the platform's fair.

Jeff Cohen:

That's fair point, right.

Paul Dawalibi:

Like, is this not like, like the point if I, if I go and say something horrible on

Paul Dawalibi:

Twitter, right? There's no police that's gonna show up at my door. I may get canceled. I may.

Jeff Cohen:

Yeah. You know, like this amendment here in the US. But if you did that in a different

Jeff Cohen:

country, you you might actually

Paul Dawalibi:

this is why I think there there can't be right. Like I think it's a slippery slope

Paul Dawalibi:

of trying to figure out too many scenarios. And I think we're just better off by saying, it's open,

Paul Dawalibi:

right? Like, if I steal your money in the metaverse, you can go and complain to whoever the

Paul Dawalibi:

developer is, right? But if you come kill me in real life, because you're so pissed as a

Paul Dawalibi:

consequence, like we've solved for that, right, like real police will then get involved. There was

Paul Dawalibi:

no like, there's no requirement to police. The Metaverse in that sense. There's a real real life

Paul Dawalibi:

crime. I could see that but I don't know, man, maybe which it's hard to sort of think through

Paul Dawalibi:

every possible future scenario when you don't really know how it's all necessarily going to play

Paul Dawalibi:

to preface

Jeff Cohen:

this next story that you're about to swap. I mean, this one done, I'll let you do your

Jeff Cohen:

preamble. But this one does bring up an interesting scenario that I actually had never

Jeff Cohen:

thought of. But when I read it, I was like, wow, that actually could happen. It makes a decent

Jeff Cohen:

amount of sense.

Paul Dawalibi:

So let me introduce the story. It says here, which I think is interesting connected

Paul Dawalibi:

to the last one obviously, does the metaverse may bring new cyber risks. Here's what companies can

Paul Dawalibi:

do. And it says here, the metaverse has drawn, there's three bullet points. The Metaverse has

Paul Dawalibi:

drawn hype in recent months with companies like meta and Ralph Lauren rushing to get their foot in

Paul Dawalibi:

its virtual door. But cybercrime in the real world is already becoming more rampant. Checkpoint a

Paul Dawalibi:

cybersecurity firm reported a 50% increase in overall attacks per week on corporate networks

Paul Dawalibi:

last year, compared with 2020. As businesses rush to plant their flag in the metaverse, not all may

Paul Dawalibi:

realize the full dangers of this new world. And they start with you want me to read this example

Paul Dawalibi:

in the beginning because I think that

Jeff Cohen:

was worthwhile. Yeah, I

Paul Dawalibi:

actually thought was pretty cool. So it says here starts it says, imagine discussing

Paul Dawalibi:

a confidential multi million dollar deal with your boss, the conversation ends, and you both leave a

Paul Dawalibi:

while later, you both meet again and you bring up your earlier conversation, but your boss has

Paul Dawalibi:

absolutely no recollection of the deal. What just happened in the metaverse, this might mean you

Paul Dawalibi:

were the victim of a hacked avatar or deep fake said Prabhu rom head of the industry Intelligence

Paul Dawalibi:

Group at cyber Media Research, deep fakes, referred to manipulated digital figures that look

Paul Dawalibi:

or sound like someone else. So it is an interesting example here. Right? It's, it's, it

Paul Dawalibi:

comes down to identity security, right? Where, because, you know, you don't see me, you see some

Paul Dawalibi:

digital avatar that anyone says could sort of be behind it and faking me that, you know, people

Paul Dawalibi:

faking me in the metaverse may try and do nefarious, nefarious things. Do you see this as a

Paul Dawalibi:

real risk, Jeff? Or is this a little overblown? And a little bit like, you know, scare tactics for

Paul Dawalibi:

a headline?

Jeff Cohen:

I think it actually is not sinner. I mean, certainly, if we're talking about

Jeff Cohen:

enterprise, you know, enterprises moving into the metaverse, and if you you're going to have a

Jeff Cohen:

confidential meeting, you know, in a boardroom, like where you're discussing quarterly results or

Jeff Cohen:

something like that. Yeah. I mean, like, if you don't know who's there, that's, that's a huge

Jeff Cohen:

enterprise level security risk, right? Like, let's say, you know, and this is something that's

Jeff Cohen:

common, you know, you see, enterprises have to deal with this now with Zoom and different

Jeff Cohen:

conferencing technology. But imagine if you were talking about a confidential deal, and then the

Jeff Cohen:

telephone dial a number was public, and you didn't know who was online, because they're not talking,

Jeff Cohen:

but they happen to be dialed in, and you're, you know, either listening or or they're talking and,

Jeff Cohen:

you know, they're using some voice emulator. That sounds like someone on the view that you know, it

Jeff Cohen:

it is a risk. You know, it's the same risk we see right now with maybe social media, stuff like that

Jeff Cohen:

anyone can go online, create a fake profile on LinkedIn, and reach out to people and you see it a

Jeff Cohen:

lot and people get tricked, not knowing who they're necessarily speaking to, because it's not

Jeff Cohen:

that hard to create a semi credible LinkedIn profile or email address with one letter or

Jeff Cohen:

something like that. So it is a risk. is not an unmanageable risk. But it is it is probably

Jeff Cohen:

something as enterprises are thinking about coming Metaverse something they have to they have to

Jeff Cohen:

consider. But we agree on the blockchain technology. But yeah, it's it's definitely a thing

Jeff Cohen:

something that will have to happen.

Paul Dawalibi:

I mean, wouldn't you agree though, that the metaverse in some ways, because it

Paul Dawalibi:

increases the complexity required to fake an identity, in some ways, probably reduces the

Paul Dawalibi:

overall number of these kinds of cyber crimes like, and I'll just give you a real example.

Paul Dawalibi:

Right? Like, when email the internet first came out, it would have been phenomenally easy to spoof

Paul Dawalibi:

someone's email address, right? Or make it look like an email was coming from someone else.

Paul Dawalibi:

Because it's not it's just text on a screen. It's not that technically difficult, right? You just

Paul Dawalibi:

change the header in the in the, you know, the the email and you can sort of fake the where the

Paul Dawalibi:

emails coming from. Whereas like, with the metaverse, while, technology has gotten better.

Paul Dawalibi:

Doing a great deep fake, whether it's emulating voice emulating a face, right, in real time,

Paul Dawalibi:

requires a certain amount of computational complexity and AI and all kinds of tools, right,

Paul Dawalibi:

like, it's doable, but I find the complexity to commit these crimes is, is increasing. It's not

Paul Dawalibi:

decreasing.

Jeff Cohen:

That's fair. I think it depends what you're comparing it to. I think, you know, if

Jeff Cohen:

you're comparing email apps 100% agree with you. They're there. You know, obviously, this example,

Jeff Cohen:

the article was written with purpose, like you said, at the outset, a bias, if you will. But if

Jeff Cohen:

you're comparing it to, in person meeting, or sits, it's less

Paul Dawalibi:

true. I mean, I think in person meetings, I was going to be the most secure. I

Paul Dawalibi:

just, I find some of these articles, like when they say 50% increase in overall attacks per week,

Paul Dawalibi:

like, was it one, and it went to one and a half, you know, like, right, like, the percentage

Paul Dawalibi:

increase isn't really telling. And so hard, like, my gut tells me there's not a real serious risk

Paul Dawalibi:

here. And the solutions are sort of simple, right? Like, it's not that hard to have some kind of even

Paul Dawalibi:

like biometric on the human end on the real life end. And then a badge, you know, that's impossible

Paul Dawalibi:

to fake because it's on the blockchain, whatever, in the metaverse that says, this, this is who I

Paul Dawalibi:

am, right? Like, I all these problems, I think are solvable. It is interesting to think, though, that

Paul Dawalibi:

there will be an entirely sort of new set of cybersecurity products, companies, etc, that have

Paul Dawalibi:

to tackle them. And don't

Jeff Cohen:

last part is the key. I didn't take the article to read like, Oh, my God, this, the

Jeff Cohen:

metaverse won't work because this insurmountable problem. It's more like this firm trying to get to

Jeff Cohen:

be one of the thought leaders of figure out what those solutions aren't, you just identified two

Jeff Cohen:

pretty pretty darn good ones. But there will be a whole industry of these same we wouldn't be

Jeff Cohen:

internet and when computers came up, you start having cybersecurity kind of 1.0 2.0 or

Paul Dawalibi:

3.0 if they whatever they want to stay consistent with. Let's talk about FTX FTX. In

Paul Dawalibi:

the news this week, Jeff, and this one. The headline here FTX announces support for Web three

Paul Dawalibi:

gaming begins in house NFT game development, Sam Venkman, fried, who's the founder and CEO of FTX

Paul Dawalibi:

announced FTX his entry into web three gaming through the acquisition of good luck games. The

Paul Dawalibi:

the FTX CEO revealed that the in house developers would build a white labeled package for the

Paul Dawalibi:

exchange FTT price attempts recovery in response to the key developments in the FTX ecosystem. So

Paul Dawalibi:

here's what I want to focus on, though, I think, unless you have some other ideas on this is the

Paul Dawalibi:

tweets that Sam put out, which I think are extremely telling where he announced this. And

Paul Dawalibi:

I'll just read some of them. I have them up here, but I'll read some of them. He says FTX is really

Paul Dawalibi:

excited to support Web three gaming, but we have a very specific approach support great games. Too

Paul Dawalibi:

many times our ecosystem has tried to build out NFT enabled games, but forgotten the first step,

Paul Dawalibi:

which is to build a great game. And just as importantly, web three should make a game better,

Paul Dawalibi:

not neutral or worse. If integrating crypto hurts a game, we don't want to do it. We're excited to

Paul Dawalibi:

support a number of our gaming partners with a full web three suite. We also want to have an in

Paul Dawalibi:

house case to develop our white label package. But the single most important thing about that in

Paul Dawalibi:

house game is again that it's a great game. Now he goes on to talk about how they love the team and

Paul Dawalibi:

you know some of the other reasons why they're so excited about this and that they play the game

Paul Dawalibi:

which is doubly interesting. But look I can't help but good like the Prophet was right you know one

Paul Dawalibi:

of those moments when put up all the graphics. Well, no, I got so much

Jeff Cohen:

explanation series of the problem. was right or Sam is listening to the podcast. So, of

Jeff Cohen:

course,

Paul Dawalibi:

Sam was listening to the podcast, of course, he got this idea from the meta business

Paul Dawalibi:

pi test. And but I got a lot of hate. I'm telling you a lot of hate. For the comments I made at the

Paul Dawalibi:

PLATO earn crowd create conference thing I did, where I said, everyone's lost track of what's

Paul Dawalibi:

important here, which is making a great game. And Sam, I consider a genius, obviously, is built,

Paul Dawalibi:

maybe the most incredible company in the entire crypto industry. How, like, it's impossible to

Paul Dawalibi:

disagree with this approach. Right. But it feels novel.

Jeff Cohen:

Well, you know, I'm Mister devil's advocate. But here I don't I mean, this has been

Jeff Cohen:

our mantra sort of all since we started this podcast and started talking about playing around.

Jeff Cohen:

And I don't think I know you said you got a lot of hate it. But I don't think it's a super hot Tech,

Jeff Cohen:

I think the industry is starting to recognize that some of the early iterations of these games

Jeff Cohen:

weren't fun. And it was always a fun games are coming. So I think that Sam is absolutely right.

Jeff Cohen:

Prophet was also absolutely right. I don't have too much that because I think we're fully in

Jeff Cohen:

agreement here. It has to start with the games and it becomes a mechanic. Nobody would ever say, hey,

Jeff Cohen:

I want to create an in game purchase game. Like no, no, you have a game. It's fun. And then

Jeff Cohen:

there's in game purchases. It's a monetization metric, not the game.

Paul Dawalibi:

But he says a couple of things that I think you're right, I think maybe people are

Paul Dawalibi:

coming around to the idea that good games are around the corner, which I don't know, right? They

Paul Dawalibi:

may be. But he says something that I think most of the crypto world misses, which is he says web

Paul Dawalibi:

three should make a game better, not neutral or worse. And I will I will extend his comment one

Paul Dawalibi:

step further. And it's it, we have to communicate to gamers how it makes it better it can like if we

Paul Dawalibi:

can explain how this makes it better, in some very real way for that gamer. No one's gonna care,

Paul Dawalibi:

right? And that the masses of gamers that everyone wants to pick up in the crypto world, what none of

Paul Dawalibi:

them will care. And so I think it's, it's a level of insight I haven't seen from anyone else yet.

Paul Dawalibi:

And to get the CEO of a big crypto company saying if integrating crypto hurts the game, we won't do

Paul Dawalibi:

it. Right? Like, that's an interesting take. Because he could have said, Look, if integrating

Paul Dawalibi:

crypto makes us a ton more money, we'll do it, even if it hurts the game a little bit, right,

Paul Dawalibi:

which is the position of just about everyone else in the industry. So I thought this was really

Paul Dawalibi:

refreshing as a take. And it'll be interesting to see in my mind, Jeff, what they do with, you know,

Paul Dawalibi:

with with a game development studio in house, and how they manage to build that while also trying to

Paul Dawalibi:

push, you know, the adoption of digital assets, which is their whole mantra,

Jeff Cohen:

do you think this is part of a bigger strategy to bring a lot more and that's because I

Jeff Cohen:

know they're building the white label product. They've hired a bunch of people in gaming. So

Jeff Cohen:

obviously, they have a bigger strategy here. But I guess I hadn't been aware of previously that it

Jeff Cohen:

was going to be to bring a bunch of development teams in house. So do you think, do you think fast

Jeff Cohen:

forward 18 months from now we're gonna see FTX be as big of a brand in gaming as as Zynga. And

Jeff Cohen:

that's obviously a little bit hyperbole, but they're gonna have 10 different teams building

Jeff Cohen:

1520 games.

Paul Dawalibi:

I don't know if it's the numbers 15 or 20. But I definitely would get behind and we'll

Paul Dawalibi:

probably put money on betting that we see at least another two kind of bets, whether it's an

Paul Dawalibi:

investment or an acquisition. When you're at the scale of an FTX, right, like you can't go timid or

Paul Dawalibi:

go like small scale. I think the the interesting part of this play is there's clear conviction

Paul Dawalibi:

around gaming and how it it integrates with their core crypto business. I wouldn't be surprised if

Paul Dawalibi:

FTX over time, you know, puts a billion dollars more into gaming. That would not shock me. And I

Paul Dawalibi:

think that it's also just smart. And it's gonna increase the competition for game developers,

Paul Dawalibi:

which is an already like, super heated market, which I think is interesting. When you start a

Paul Dawalibi:

game development studio like a year or two. I just I want to end on on one last very quick story

Paul Dawalibi:

here, which we'll spend two seconds on. And it's another game developer, which I think is

Paul Dawalibi:

interesting game fam raises 25 million to build games for Roblox and I have just one quick

Paul Dawalibi:

question for you here. Obviously, we're big fans of Roblox from a Metaverse perspective I think

Paul Dawalibi:

they're ahead of the curve of stripe anyone else. But is that a lot of money when you're building

Paul Dawalibi:

for only one platform, Jeff like is that how Big as the risk when you're so tied to the success of

Paul Dawalibi:

just one platform who future is bright, but it's definitely not certain.

Jeff Cohen:

It is a risk. I mean, it's a risk in a couple of different ways. I mean, one, the the rev

Jeff Cohen:

share on Roblox is actually super low relative. So actually, it's funny people, all the developers

Jeff Cohen:

complain about the 30% rev share on on Apple and Google, it's actually robots take 70% of revenue.

Jeff Cohen:

So it's, which is, you know, kind of mind blowing, if you think about where's Tim Sweeney? Yeah, that

Jeff Cohen:

they're able to get away with that. I guess it's because most of the developers on there are UGC

Jeff Cohen:

and small creators. So they probably don't even necessarily realize and certainly can't, and

Jeff Cohen:

bargain that I imagine that number will start to shift, because Roblox is incentivized to bring

Jeff Cohen:

more creators on, they've talked about that. So I would maybe that number shifts over time, but big

Jeff Cohen:

rev share, take. It's also still limited in terms of geography and age, right. So you're developing

Jeff Cohen:

for a very limited demographic and Mindo robots, massive steps towards trying to expand both those

Jeff Cohen:

things. But it's still been a challenge to them. So you're kind of limited there. And then the last

Jeff Cohen:

thing, and probably the most important as we're thinking about sort of the professionalization of

Jeff Cohen:

UGC platforms, which I think is actually a pretty cool trend. And I'm a big fan of the guys that

Jeff Cohen:

game fam. And actually, we know some of their investors conference, he was the lead investor,

Jeff Cohen:

which we're big fans of them. But discoverability is a big issue for these platforms. There's no

Jeff Cohen:

real way to advertise very well and do publishing on the platform. So I'm sure you know, that's

Jeff Cohen:

something they're they're doing in other places, but there's no great app store optimization or

Jeff Cohen:

advertising there is with Apple, and Google for robots.

Paul Dawalibi:

Yeah, I think this is great for game fam. I think it's exciting. When you get a

Paul Dawalibi:

big raise like this in the industry in general. I think the investors here are not going to make a

Paul Dawalibi:

good return. And I probably not anywhere near what they think they're going to make just because like

Paul Dawalibi:

the numbers are what they are. $25 million raise means the business at least worth 100 million. If

Paul Dawalibi:

you're a VC fund, you need to have at least a billion dollar exit. Right? That's what you need

Paul Dawalibi:

to believe you can get to I just don't see how you build a billion dollar game development studio

Paul Dawalibi:

just on Roblox today. Now,

Jeff Cohen:

that's a great question that be radically different for it because that is a good

Jeff Cohen:

question. Like how big does Roblox have to get? Because I could I guarantee you there were

Jeff Cohen:

probably people saying that about mobile, you know, 10 years ago, and mobile there's only this

Jeff Cohen:

many gamers, there's only this many call like, and I don't know what the adoption curve needs to look

Jeff Cohen:

like and what the math and the model kind of shows. But I suspect there will be a billion

Jeff Cohen:

dollar company built that builds you know, is be sort of the Zynga for robots. Like I bet there

Jeff Cohen:

will will be game fam I have no idea but we are bullish on Roblox. I know that so you probably

Jeff Cohen:

should believe

Paul Dawalibi:

I'm very bullish on Roblox, but I don't think I don't think other people can just

Paul Dawalibi:

hitch it's like, it's like saying why haven't we seen even take an even bigger example? In more

Paul Dawalibi:

traditional media? Right? Have we seen a billion dollar media company built just on YouTube? No,

Paul Dawalibi:

no, there's media companies that are that big that put their stuff on YouTube, but among other

Paul Dawalibi:

places, right. And there are there are influencers and creators on YouTube, who are make good living,

Paul Dawalibi:

right, maybe even great living or maybe 50 100 million dollar businesses, but multibillion dollar

Paul Dawalibi:

scale where you're you're sort of locked into just one platform. And YouTube's what 10x The size of a

Paul Dawalibi:

Roblox right now. Right? Like it, it feels like a large hurdle. And I worry that maybe the investors

Paul Dawalibi:

didn't think that one through I don't know it. It's a lot of sexiness. Right. And Roblox growth

Paul Dawalibi:

has been tremendously good. And maybe it's just a 10 year play, right? Like, Jeff, I think you could

Paul Dawalibi:

probably convince me if you're saying, yeah, in 10 years when Roblox is that half a billion users?

Paul Dawalibi:

Could we see that? You're right, like maybe someone was saying this 10 years ago about mobile,

Paul Dawalibi:

so I couldn't buy maybe the longer term story. I don't know if I buy sort of the, hey, the venture

Paul Dawalibi:

fund that's in here needs an exit within two or three years that I'm a little more concerned if

Paul Dawalibi:

we're if we're shortening sort of the time, the time period. Man that time flew by Jeff, that

Paul Dawalibi:

brings us to the end of this week's podcast. I just want to remind everyone, go leave a five star

Paul Dawalibi:

rating and review guys on the podcast send it to a friend, a colleague, a co worker Share the podcast

Paul Dawalibi:

with everyone you know who's interested in gaming interested in the metaverse interested in crypto?

Paul Dawalibi:

All the topics we cover on this show, Jeff, thank you as always, to our audience. Thank you guys for

Paul Dawalibi:

tuning in every week. And don't forget the future is fun. We'll see you guys next week.

Unknown:

Thanks for joining us here on meta business. Make sure to subscribe to this podcast

Unknown:

everywhere you get your podcasts, leave a five star review and tell your friends family and

Unknown:

colleagues all about us. Also, make sure to follow meta TV on all socials to get more of the best

Unknown:

Metaverse content anywhere. Tune in every week for another episode of meta business

Links