In this episode, we discuss Orlando striving to be the center of the metaverse, Unity merging with ironSource, Unity's CEO going off on game developers, 44% of people saying they would accept advertisements in exchange for free metaverse services, Cauldron wanting to be the "Pixar of Web3," and so much more!

Episode 34 Keywords: Orlando, metaverse, Unity, mergers, ironSource, game developers, advertisements, free metaverse services, Cauldron, "Pixar of Web3"

Welcome to the metaphysics podcast. The

Metaverse and web three are bringing about the biggest

revolution since the internet itself. With your hosts Paul the

prophet Dawalibi And Jeff the juice Cohen. We will be bringing

you the latest Metaverse, business news and insight into

what it all means. The meta business podcast starts now.

From the boardroom to the metaverse. This is the meta

business podcast. I am Paul the profit that will lead me. I'm

joined today by my friend and co host, Jeff the juice Cohen. For

those of you who are new here, welcome to the official podcast

of the metaverse. What we do is we cover the most pressing,

Metaverse, stories and news of the week. When we look at all of

it through a business and C suite lens, we dissect, we

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it with someone you know, it really helps the podcast to

grow. Jeff, how you doing this week? I'm good. Busy week, I

just just we both actually just moved into new places. Because

we both moved to temporary places. And now we both sort of

moved to actual places. So we're kind of following the same

schedule. I've just done complete opposite sides of the

Earth, I guess. Yeah. And so if an episode or two is off by this

usual release states, it's apologies. It's

it's very temporary. That will, we will get back on track as we

always have been since beginning. By the way, this is

like we're 30 Plus episodes in the steps of 34. And I'm amazed

I truly mean it in the intro. Like, I'm so amazed that the

feedback we get on the podcast the reviews that people leave,

it's been it's been very, very humbling. When people say how

much they liked the show. We got a lot of news to cover this

week. Jeff, we got some good news. And I think there's like a

theme to the news this week.

Which is interesting, right? A lot of news stories all around

one. One particular topic, obviously other than just

Metaverse, but let's start with something a bit lighter as we

normally do. And this is Orlando, the city of Orlando,

Florida in the news, and the headline here. I'll bring this

up. The headline here is Orlando will test if a physical city can

be the center of the metaverse. So what they're saying is

Orlando wants to be the center of the metaverse they've teamed

up the city has teamed up with Unity, the game engine maker to

create a digital twin of the city so they want to recreate

essentially a virtual Orlando in the metaverse and, and what

they're saying is Orlando is very familiar with this, or at

least has experienced with this because they say as the home of

Disney World. Orlando is familiar quote with the notion

of turning dreams into reality. So they want to become better

known as the hub for the metaverse web three and the

related industries which they describe as AR VR AI, gaming and

simulation training.

So what do you think of Orlando like a city essentially,

throwing their hat in the metaverse ring and saying not

only do we want to be the center of this right, create jobs and

do all this stuff around it and bring industry here, but create

sort of the the virtual version of Orlando in the metaverse or

in a metaverse? Yeah. I mean, there's there's a lot to unpack

there. I do. I love when cities, you know, take the lead and have

initiatives like that, like I actually sat on a panel back at

the ESTP esports Trade Association conference we both

went to in Chicago last year, and I sat on a panel about

cities kind of getting into esports. And yeah, I think it's

great when cities take initiatives and try to bring

businesses in and bring industries in that they think

are forward facing and good for the community and good for their

citizens. So kudos on them for that. We've seen this done in a

lot of different areas, one that comes to mind, just right down

the road, I guess in Florida is Miami. I know, you know, they've

had a really big influx of crypto, the crypto community and

they've sort of like adopted, you know,

like their mayor has been very forward facing about kind of

trying to make them like the city for crypto. I think it's

it's, it's kind of work as far as I know, of your take on that.

But, you know, so they're following that that blueprint in

terms of creating a virtual city. I think it's like a

virtual version of Orlando. I think it's a super cool idea. I

mean, I don't know how exciting Orlando is as a city, but

it's a good idea in the sense of I can think of a lot of ways

that that's cool. You know, obviously cheap

DEA has had a lot of success creating kind of like mini

virtual versions of cities and people running around and being

immersed in it and kind of seeing the places that they go,

and then being able to do cool things that, you know, maybe

without consequences, but then city think there's a cool angle

to that. There's also different, you know, things that could be

interesting, you know, in terms of like, that could help

driverless technology, you know, their various, like more real

world things rather than games, of city city planning, just

throwing out a few things. So I think the idea of creating a

virtual version of Orlando is probably pretty cool. But the

bigger question I have from all this is like, it's great to say

all these things, and have a conference at a press release

that announcement, but like, what does this actually mean, in

a short of creating, like Google Maps version of, of Orlando,

within within Unity? Like what's next, like? And maybe the

article dives into it a little bit more, but like, are they

going to be giving grants like, will they be? Like, how would

they actually foster this this team?

Yeah, it's not, I mean, it's not laid out in detail in the

article.

That for me, this article was like, it was like a bit of a

roller coaster, ironically, you know, talking about Disney

World, there was a lot of ups and downs. And, you know, it's

like city backing, a big futuristic play, big thumbs up,

right? Because that's going to lead to job creation and lead to

companies moving there. The same way. You know, Miami, I think,

had a lot of has had and continues or Miami and Palm

Beach has had a lot of success, attracting crypto and finance

and like a whole bunch of industries that are now moving

out there.

You know, this is great for Orlando to be getting ahead of

this and saying we want to be a part of this. And I'm assuming

there are dollars there have to there has to your point. It

can't just be taught there has to be dollars behind it. There

has to be something to pull talent like human capital and

capital capital into the city. Right. That to me is exciting.

Then, like I keep reading the article, so I'm on this high of

great city like getting behind this creating lots of jobs

wanting to attract industry. And then it's like, okay, but then

the creation of Orlando in the metaverse like, you lost me

there, right? Like, who cares? Yeah, Disneyland is cool. And

you know, I've been to Orlando hundreds of times, like other

than Disney World. There's like a really cool Mexican restaurant

that I liked that serves great tacos and fajitas. But like,

why would you care to do anything in the Orlando

Metaverse version of the metaverse version of Orlando

other than go to the theme parks right, which is all really

people in the real world go to Orlando for

for the most part, like

it just I am going to continue to rail against one to one

recreations of anything real world in the metaverse. I just

think you've missed the point, if that's what you're doing. And

so I was on this high, and then I lost all faith in the people

who are doing this, that they understand really the

opportunity here. Because the first thing they're doing is

something I think that's completely misguided, right

doesn't make any sense at all, other than for a press release.

And then and then the sort of got back up on the high because

the article mentions McKinsey saying, Hey, this is going to be

a $5 trillion industry by 2030. I'm like finally we're using

letter T, because I think everyone has massively

underestimated how big this is going to be. But then it

mentions that McKinsey thinks the games piece is going to be

smaller than enterprise markets and ecommerce in the metaverse

and I'm like, Well, you're wrong. They're right fun is

going to be driving all of this.

And so like it was a tale of two cities with this article for me,

it was like, they love that they're doing something but

clearly they don't get to actually what it is because

otherwise they wouldn't be doing the something they said they

they're doing.

But I guess somethings better than nothing, right? Because at

least it got us talking about Orlando in the context of the

metaverse. It's also interesting that Disney, you know, given

we've talked so much about Disney and their Metaverse guy

like I would have been intrigued if they had been more involved.

You're true, just as this announcement and part of the

strategy.

It's a bit

and maybe that says more about Disney's relationship with

Florida government or something that you know, or maybe they

just don't have a great metaphor strategy yet, but it's

surprising that they weren't more twined into the story.

Yeah, it's good point. I mean, you mentioned the Unity

mentioned as one of the partners right not Disney of Orlando here

and I think it's interesting because unity also there was

another story this week from unity.

Talking about the

their merger with a company called the iron source. So

iron source went public a year ago through a SPAC at an $11

billion valuation. Now it's being valued at 5 billion in the

merger. Unity has had their share price fall by over 70% in

2022, and their market cap is under 12 billion. So not a

merger of equals, but you know, 12 billion and 5 billion, pretty

close in size. Now, for those who don't know, unity is the

game engine that is powering a lot of what people are calling

Metaverse experiences today. Iron source is in fact, I mean,

I don't know how you would describe them, Jeff, but an ad

network, right? They really helped a different thing. Yeah,

it's all ad tech. I mean, they have an ad network. And then

they do like ad mediation, as well as, like user acquisition.

So it's all about monetize monetizing games and acquiring

users.

Yeah, there was a couple of things that stood out for me in

this article one, I noticed the merchants valuing iron source at

a pretty significant premium. Right there, their market cap is

half of what the company is being valued in the merger.

And, and the other the other comment, our The question I have

for you is so what do you think of just in general, the price is

being paid here, the value the valuations being put here? And

to you know, is this does this imply, like is unity trying to

solve the monetization piece of the puzzle? Here is the future

of Metaverse, monetization all you know, in Metaverse, ads?

Like what can we draw any conclusions from the merger?

Because the big deal?

Yeah, we'll have to take those one by one because I forgot some

of them. But they're all really good questions. I mean, the

interesting thing to me, we always talk about unity as as

the engine, the game engine, it's sort of like the rails

behind the metaverse, if you will, whereas this deal was very

grounded in reality, right? Like, if you think look at what

they're buying, I mean, it's really an advertising network,

and a b2b software solution for for mobile GameCom. What

ironsource does is it helps mobile game companies, you know,

generate ad revenue and do user acquisition. So the best comp

would be app love it. So very, like web to ground data

acquisition. And I think a pretty good deal even though the

the market did react fairly negative to it, I think then

that's really driven a little bit by investor sentiment

towards towards just unities valuation. And just to get into

the weeds a little bit on that, right now, unity is valued more

as like a SaaS company, their comps will be kind of like Adobe

or Salesforce, whereas you know, now with this acquisition, more

of their revenue will be driven by ad tech, and advertising

versus like software and subscription. So just

inherently, you know, your multiple will come down, you

have that revenue mix shift. But I think strategically, you know,

it's a very smart deal. They're trying to bring kind of combine

creation and monetization, and bring those two parts of the

cycle, you know, more more married. And really what they're

trying to do is allow creators to get faster validation of

their games and ad monetization earlier on. So you they know

earlier in the creation process, whether a game is going to be

successful or not. And I don't know if you caught some of the

flack that the genre Telo got the CEO of iron, or sorry, unity

for some of the comments he made, but I figure, there

probably will be ones that you're interested in.

I put a link in the private chat here. He made a comment

basically saying, you know, any developer that's not not

thinking about monetization early in development is an

effing idiot, which is a little bit off the cuff. And, yeah.

I mean,

he's wrong. First of all, because I think game developers

first and foremost need to be thinking about making a fun

game. And I think thinking about monad. Like, there's no nuance

in his comments, right. So it's impossible to know what his

actual point was. But like, if the point was you have to think

about monetization before anything else. That's wrong. If

the point was, if you're not thinking about monetization at

all, then you're making a mistake. That's sort of Right,

right? Like he's correct there. What's interesting about all of

this whole unity iron source thing for me is almost all the

conversation around Metaverse publicly is that crypto web

three tokens, NF T's all this stuff. This is the monetization

engine of the metaverse, right? And unity, arguably one of the

underlying platforms that will potentially power the metaverse

future meta versus, you know, small land

excetera

has made a very TierPoint web to Dotto kind of by here. But they

could have gone and bought some company doing token NFT stuff

and like integrated that into unity so that game developers

can monetize their games through tokens and NF T's and all this

kind of stuff. And they instead they just bought like a an in

game ad network with very, sort of last gen kind of technology.

I don't know what that says about their belief in kind of,

you know what most people are talking about in terms of

Metaverse and web three monetization?

It's a great point. Or maybe what it says about the markets I

thought market hype cycle for Metaverse, because maybe I

clearly believe that they still believe in it, but maybe when

their share price has fallen as much as it has, they now think,

Okay, our investors need to see us having a business model that

kind of spans both generations, or both worlds, if you will.

Yeah. But I personally believe today that the far more

effective way of monetizing anything. Metaverse is in game

or in Metaverse at, like, really, the technology that's,

you know, much less cutting edge, right and putting up a

banner in somewhere in a VR world that I'm navigating, right

let's that's almost like a sign on the side of the road here in

real life. To me feels easier and probably more effective than

very complicated tokenomics and NF T's that not everybody loves

and gamers rejected Right? Like there's, there's still,

to your point earlier allows you to build a fun game first and

foremost. And then you can have advertising whether it's, you

know, interstitial or woven within the game. Obviously the

tricky thing with the metaverse is you don't want to break the

immersion. So you have to find a way to make the advertising

native. But it makes the makes the monetization sort of second,

which is ironic, because it's almost the opposite of Jr's of

his comments. But yeah, I mean, I agree some of these, we've

talked many times about played earn and kind of how it's

financialized the entire incentive structure playing

game. So maybe this is a step towards having that not be the

case with Metaverse where it doesn't have to be. Every game

has a token and you're earning things and the currency in the

game is transferable. Maybe this is a bit more sustainable as as

a as a monetization like.

Yeah, and since we're on the topic of advertising and

Metaverse, I want to bring up the next story here, which is,

it's interesting. It's based on a research study from YouGov.

For those who are fans of our content, we also do another show

called the business of esports, which you should subscribe to.

Maybe you came from there. We do a weekly new show every

Wednesday at 2:30pm. Eastern Time, which you should come to

it's a lot of fun, where we talk more about gaming and esports.

But YouGov is our is our is our main sponsor there. And you guys

actually did a study on advertising in the metaverse

here. And this article talks about some of the findings,

which I think are interesting, right? The headline here is 44%

of gamers would accept advertising in exchange for free

services in the metaverse. So this is a study from YouGov.

They found that 44% stated they would accept advertising if it

meant they would be given free access to apps, games and places

within the metaverse or within the game.

Now,

this was eye opening to me, Jeff, because again, so much of

the conversation is around tokens and NF T's, right? When

essentially half of the people polled here have said even in

play to earn games in meta verses and all these things like

i will i am okay with traditional advertising, right

pushing an ad to me in the traditional way. If it means I

get something in the game.

Were you surprised by this number? I'm honestly not that

surprised because this is something you see in mobile

gaming a lot like where you know, rewarded video tends to be

a very popular feature. And that's basically where someone

watches an ad to then get premium currency or an item.

Essentially, you're trading your time for your money, right? So

it's a you can either buy this for $5 or you can watch a 32nd

ad. And it's it ends up being very popular. And actually, it's

a form of advertising that most gamers do not like do not mind

they actually like it because it gives them the option. You know,

you don't have to you don't have to ever engage with if you don't

want to. But if you do want to it's another form of way that

you can pay for something in game. So I'm not shocked by it.

And it to your point it is a good future monetization model

for for the metaverse, you know, so long as you can kind of

balance that with your maybe your premium economy as well.

Yeah, and there's some interesting other interesting

stats in the star

Call.

It says 35% of respondents said they were comfortable with

advertising within the metal space and 25% were undecided.

46% uncomfortable with the idea seems high like the 46% to me,

like why would you be uncomfortable with average? It's

like saying like, if you're uncomfortable with advertising

the metaverse like, how is it different than advertising in

real life? Right? Like, I'm not sure why 40 Sit unless they're

just like, hey, it's a game. I want it to be fun. I don't want

ads. But to me, it's like if you want the metaverse to be like an

immersive, real world like experience, like capital and

Metaverse, there's obviously going to be advertising and it

may be even be advertising for things that are native to the

metaverse, the advertising for items you purchase to consume

within that digital world, which I think is where probably a lot

of this is all heading. But for for for over 50% of people to

say that they're uncomfortable with that. It almost makes me

believe that they're not understanding the true vision of

what the metaverse will be. Or they're just they're just

thinking of it. Hey, a Metaverse equals game. I don't want ads in

game, boom, I say no. Because to me, if we get to this oasis

version of Metaverse, there's clearly going to be advertising.

It has to be right clear, it has to be agree. I think part of it

comes from the fact that for everything other than mobile

games, in game advertising has never been a business model that

really caught on, because it didn't really have to, right,

like, people were selling plenty of $60 box copies. And then

people were selling plenty of free to play cosmetics. And so

there was never like a real impetus to, to, to push in game

advertising. Now. In mobile, that's different. But I think

that's where this data point is driven by right where there's,

there is a big cross section of gamers who just are not used to

this, because they have not seen it in traditional games. And if

they think of the metaverse as some extension of games or a

type of game, they will they will see it as uncomfortable in

that sense.

I think that's that changes very quickly over the next five

years, to be honest, because I do think it will be ubiquitous

to your point. It has to be has to be part of that equation. I

just I want to I want to finish on one last article here, Jeff,

where, you know, we

the headline was, obviously very catchy. People, the way people

describe their companies, when they're fundraising, I think is

also very interesting.

And this one, the headline is crypto gaming firm cauldron

raises 6.6 million to build Pixar of web three. Now, the

article defines this a little bit. And it's a quote from the

CEO of the company,

where he says a big bit missing from web three, gaming is

storytelling, people aren't really coming back, because

there isn't a reason to come back. If you close your eyes and

are listening to a Pixar film, you can't see the art or

technology but the story is still gripping you. Storytelling

is what matters. So what do you think of this take of being the

Pixar of web three here, Jeff? And what do you think of that

that quote, maybe specifically? Well, I feel like plenty of

people Pixar is a great company, and really great at what they

do. So plenty of people have used in pitch deck, say we

wanted to be the Pixar gaming or the Pixar of this. So I'm not

that surprising. I are not that surprised. I think, you know, he

breaks a great, great point about web three gaming, and

there really is no storytelling, because it's always been, you

know about financialization. It's not necessarily about the

games being fun or aging. So I think that is something that's

missing.

I'd be interested to see what kind of game they're building

how it monetizes. Like whether this is just lip service, right?

Because it's one thing to say, hey, we want to build great

stories. We're not about you know, just monetizing you. And

it's we're trying to do this differently. But then it's like,

oh, we just created 50 characters, and we're selling

each of them for all this money as an NFT. It's like, okay,

well, I almost guarantee you, I don't know this for sure,

obviously. But I'd be willing to bet basically bet my life that

if you ask the founders of Pixar, would you ever sell your

characters as an ft? They would like, throw up and like, shoot

me? You know, like, I just think that that's the way they view

their their at their IP and their characters. So, like, you

okay, it's kind of a dichotomy that like they're almost like

diametrically opposed to one another. I also think it's

interesting to kind of oppose this story to the one we covered

a few weeks ago around I think it was either board apes or the

other one. Yeah, they were talking about they didn't want

to create, you know, their characters. They didn't want to,

what was the Goliath? He said, we're not your age.

It's interesting. It's an interesting take. It's a catchy

headline, Pixar, what three? I mean, they raised six and a half

million duck dollars. So like, clearly, the pitch worked. I

just, I'm amazed at like,

it's one step closer to where I think the plane earn, you know,

Blockchain based web three companies, whatever gaming

companies need to be. But yet not far enough, right? Because

as a gamer, what I know, and I think what they don't know is,

there are I can, I could probably think of 10 games that

have incredible storytelling,

incredible narratives and characters and things like that.

But the games weren't fun, right? And maybe you played it

once, or you got halfway through and then you gave up. Like,

there's, there's a lot of games like that where, you know, a

story driven game isn't necessarily a fun game. And so

it's like, it's one step closer to being where we shouldn't be,

because I agree, more storytelling is better than less

storytelling, but it's like, couldn't we have just taken it

to the logical conclusion and just said, Hey, we're gonna make

really fun games. And that's gonna be our focus is so

inherently opposed, because single player games are always

known for like, you play them once? And then it's kind of it

right? Like, yeah, it's not a live service. You don't want to

own your character and a single player game because you play

through, it's like reading a book. Like you read the book.

Now, it's, maybe yes, maybe you own the physical book, but like,

you don't own the characters. It's over the story ends. And

that's it. So I like what is the point at what makes it web three

that

it's not, it's not clear to me that this is, I mean, clearly,

it worked in the sales pitch.

But I would bet good money, we don't see a fun game out of

them. Like yeah, ABS, or a game that makes sense to your point

in that web three context, which is, I think, is a great

extension of what I was trying to say.

I just, I'm skeptical, call me skeptical, right, until I see

someone coming out and saying, Hey, we don't really care about

the token, and we're not going to sell any NF T's before the

game comes out. Like, we really want to make a fun game. And

then we're going to figure out how to monetize with cool NF T's

and stuff later, like until someone comes out and says it

just like that, call me skeptical.

But we'll see. I mean, it's an interesting one to follow. They

raised a bunch of money at a good time, when you know,

they can put their heads down and focus on building so we'll

see what comes from them.

Jeff, that brings us to the end of this week's podcast I will

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