Crypto Gaming is About to Explode ft. Piers Kick

0:28Meet Magic Eden, the home of Web3. If you've used any of their protocols, you can claim some. So check out Magic Eden today and watch them become a super dap in the home of Web3 in real time. Go to realvision.com forward slash magic for more information. Hi, everyone. I'm Ralph Powell, the CEO and co-founder of Real Vision. Here at Real Vision, we're committed to give you the best knowledge, tools, and network to help you succeed in your financial future. If you're enjoying this podcast, please take a moment to give it a five-star rating. It truly helps us continue to bring top-tier content. Thank you so much.

1:02Hi, I'm Raoul Pal, and welcome to my show, The Journeyman. The Journeyman is my exploration at the nexus of macro, crypto, and the exponential age of technology. You see, the big arc here is by applying macroeconomic understanding and analysis, but leveraging the secular trends of crypto and technology, we can unfuck all of our futures. And that's really all I'm doing here. I'm your guide, where I bring in my network of people, the people I really want to talk to, the people I trust, to get their understanding of what is happening, where the opportunities lie, or even where the risks lie. One of the things I've been looking at for a long time is obviously the trend of ongoing digitization.

1:48The digitization of the world continues. And that vision of a metaverse seems like a fad from last cycle, but it's very much alive. It's very much alive in many ways, whether it's the AR glasses from Apple, Facebook, or Meta, and others, or whether it's in the gaming world. Everything is colliding along with AI. It's colliding in ways we don't yet understand how they're going to work, and how we may even live our lives in the future. I'm really interested in that nexus of gaming, AI, and crypto, because a lot is happening there. And it's going to drive the valuation of our cryptocurrencies as blockchains get used more and more, as are the AIs.

2:37So these kind of things are interesting to me. And I think they should be interesting to you because it's going to give you opportunities, things to invest in or a broader understanding of the world around us so i'm really happy to bring back somebody i kind of brought onto the world discovered um pierce kicks of delphi digital pierce laid out his vision of the metaverse about four years ago amazing guy great thinker has become a great friend of mine pierce is at the forefront of gaming he invests with the delphi team in the gaming space. He understands it inside out, but all from a crypto angle.

3:16And Delphi, well, they've been leading a big revolution on AI understanding with crypto and where that nexus is. So Pierce is exactly the right person to speak to at exactly the right time. It's always a good conversation. So enjoy. Join me, Raoul Pal, as I go on a journey of discovery through the macro, crypto and exponential age landscapes. In The Journeyman, I talk to the smartest people in the world so we can all become smarter together.

3:52Piers Kicks, welcome back to Real Vision. Thank you for having me. Good to be back here, Ralph. It's been a while, actually. It has indeed. It has indeed. I was glad that we managed to reconvene in person recently. And yeah, glad we're doing this now. You introduced me to the tequila-laced beer. Yeah, there you go. Exactly. So listen, for people who don't know you, just give a bit of your background, a bit of your journey as well. Yeah, I mean, my background, super high level, like grew up one of those basement dwelling kids, playing a lot of video games, got into gold farming and runescape very early on, which eventually through a roundabout way led me to finding Bitcoin and crypto.

4:30didn't really understand it very well growing up but became pretty fixated by lots of the ideas around it um thought there was a lot of sci-fi s properties to it and so spent more and more of my time um yeah kind of pursuing crypto studying crypto as i grew up um eventually dropped out of studies and started a small scale sort of crypto fund um and then uh i guess about two years after that journey met um all of the the guys that have started delphi digital uh research business that all dropped out of wall street trying to bring a sort of institutional grade analysis of the space and ultimately ended up kind of combining forces and launching the venture arm of that business together.

5:06And so I spend all my time covering all things sort of gaming and gaming related infrastructure. Yeah, kind of the intersection of crypto and gaming and some of the cool peripheral pieces around that too. Meet Magic Eden, the home of Web3. They are getting into the token trading space in addition to NFTs to become a super dApp where you can do everything cross-chain all in one place. They're solving UX issues by building products across every chain ecosystem, swaps, borrowing, and lending, NFT, perps, and more. All seamlessly cross-chain. Instead of hopping between countless sites and handling multiple wallets, just use Magic Eden.

5:43Plus, the ME token is coming out this quarter from the ME Foundation. If you've used any of their protocols, you can claim some. So check out Magic Eden today and watch them become a super DAP in the home of Web3 in real time. Go to realvision.com forward slash magic for more information. Now, your first go on Real Vision was a kind of one that shocked a lot of people when you kind of laid out a vision of the metaverse, which is a term which is now kind of not really in vogue, but it's still all happening. Give us a bit of your thesis about the bigger picture of what is happening here because then gaming kind of fits into to a lot of this for sure i mean yeah i still stand by a lot of the stuff that i was uh sort of pounding the table on back then which is this idea that uh crypto is really integral to the emergence of an open metaverse um as many people know right now that we've labored all the marketing hype and whatnot um this idea that you know we have this sort of direction of travel as a species as a digital species where we're going to be spending more and more time in increasingly sort of immersive interconnected and pervasive sort of digital environments and sort of core to what I've like yeah I've been trying to stress is that being able to have as much of that of those environments run on like credibly neutral you know open infrastructure that's kind of immune from a lot of the shortcomings we've seen in you know web 2 whether that's you know sudden cessation or censorship or things like that um it feels like a bit of an imperative um and so yeah i mean wrote that piece back in like 2021 that kind of elaborates on all of this um i kind of uh identified and acknowledged like gaming is like the big sort of front end and um kind of biggest piece to all of that right with three billion daily video game players i think this concept of like you know natively digital value is very intuitive like still believe to be um i still am a big believer in the thesis that uh you Gaming is kind of the Trojan horse for crypto adoption, for blockchain adoption, because again, it's probably the most resonant use case.

7:49It has the massive user base. This stuff's very intuitive to people that have spent a lot of time around virtual economies and whatnot. And so, yeah, I've been spending a lot of my time over the last five, six years mapping that intersection and investing quite heavily in it. So why does blockchain matter to gaming? Because three billion people play games and they don't seem to need blockchain. so there'll be people watching this saying yeah i don't really get it why yeah i mean my my point is that i just think um like the scale of these economies basically um it obviously varies a lot by game but uh any game that has a sort of like big secondary market if we take some of the biggest games that most people will know right like um fortnights or call of duties like um especially around something like fortnite right there's this massive like secondary market that uh exists a gray market which isn't formally endorsed by the game creators at all and um yet transacts you know hundreds of millions of dollars per year people you know trading accounts so they can get access to certain skins and so on um core to the thesis of the very simplistic implementation of crypto around games is the idea that when people have total transparency into the nature of these economies they have robust assurances that you know some limited edition rare item that there actually is as few as they say there are um and also the ability to just uh yeah kind of like have transparency into market data the whole idea is that people's willingness to spend is increased as a result of that um and that basically being able to capture um value from you know fees off these marketplaces is going to become an attractive like source of revenue for games you're currently now like you know basically try and insulate as much as possible sell as many like items in a sort of like one-way capacity where you're really just sort of licensing the item.

9:39And so, yeah, the idea is that we can massively increase the scale of these economies by making them more transparent and giving people much better education around this notion of actually owning these assets. And so if we look at games like Counter-Strike Go, one of the reports that our research business did was showing that from 2019 to 2023, there was$32 billion of secondary market volume in Counter-Strike Go items, right? And a lot of that either happens in, again, these gray markets that I've described kind of happens outside the game. And as it stands right now, like, you know, there's a Steam marketplace where they charge pretty heavy fees in order to, you know, transact there.

10:20Obviously, they have a total monopoly on their game economy. But as I say, the idea, the thesis is that we can really, yeah, increase the scale of these virtual economies by bringing that degree of transparency and so that's kind of like the lightest touch implementation of crypto and i'm sure we're going to touch on gunzilla at some point in its conversation and off the grid which is that what i'm enormously excited about at the moment i think this is the first example of um yeah again it's kind of uh proving out that um and then i mean we can we can go deeper into some other yeah we'll come up to that in a bit um really my thesis on this is pretty simple and it's kind of what you alluded to is everything in the digital world goes to zero in value because you can make infinite amounts of it and blockchain creates scarcity digital scarcity and you know in a game where games is really all about that human behavior of prestige and success and how have I how am I doing versus others and what have I accumulated same journey humans have in the real world and in the real world you might accumulate a house or a car or a watch or whatever it is and in a game it skins or whatever it is and and just to make that so you don't get devalued in your status.

11:29It's just a big deal to humans generally, right? Totally, yeah. And I think one of the things that excites me loads about this beyond the like, you know, as I say, as you kind of touch on, it's like the same sort of psychological drivers, right, of wanting to like signal certain things in games or around the scarcity aspect. But one of the ideas about this that excites me enormously as well is just the concept of like digital history. And so, you know, obviously sporting events, like the player who scored the winning goal of the world cup there um soccer shirt or whatever from that game obviously has a ton of value we have no equivalent of that in the digital world even though like the some of the biggest events on the planet now by viewership are esports and competitive games and so this notion i mean been banging on about it for years but we finally you know have a couple titles that are sort of worthy contenders of creating a competitive environment that creates an audience of that scale and being able to unlock the digital history pieces again Again, like, you know, the guy that had the winning tail.

12:24So you're talking top shots for gaming? Yeah. I mean, like, let's say the kid, what was he called? Booger, who won the Fortnite World Championships a few years ago, this 16-year-old won$1.6,$1.8 million. Like, the skin, the weapon that he used in that game, it's kind of a sick thing. If I'm a collector, someone that respects the game, that I'd be able to own it, right? And there's all sorts of interesting stuff that we're starting to explore around doing, like, you know, weapons themselves have their own history. so like your actual i in this game that i'm obsessed with off the grid i've been using the cypher called the kestrel and this idea that you can build a kill death ratio of the weapon every time i've called this into a game how many kills i got how many headshots everything and that's actually etched into the weapon data itself like this shit becomes really cool there's massive surface area for what you can start layering in and like you know mainstream game is still uh you know i get it they see everything in crypto as like a scam and i think we're now at the point where we're really starting to prove that not to be the case for some really amazing polished titles coming out.

13:20But I think people will start waking up to that, to new forms of collectible value, cosmetics, the scarcity aspect. All of that stuff's going to be really interesting. And I mean, again, that's the most light touch part of where crypto can be really amazing for gaining. Hi, Raoul here.

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15:02So let's go through the Hero's Journey narrative arc of, okay, we kind of understand the concept. The next thing is it all went wrong. so everybody got disillusioned with pretty much every aspect from metaphors land sales to all the original games to what happened with um what was the game in the philippines the axe infinity so give us through that story the kind of end of 21 going into 22 23 when you have to go through the winter of of gaming and metaverse narrative everything else then we'll talk about coming through the other side with what's happening now. Because when you talked about this at your flat, it was like, you know, suddenly everyone was getting quite disillusioned.

15:43So talk us through that kind of disillusionment arc that happened. Yeah, I think there's a number of factors at play. First of all, the scale of the speculative fervor and excitement. Like, I think we've got to acknowledge that that was a very particular point in time, right? In terms of interest rate phenomenon, in terms of like, yeah, mass excess that we saw, you know, way beyond crypto. So I think this whole like metaverse hype all got embroiled with, I mean, obviously looking at where like Facebook went to, like there was this big broad marketing towards the metaverse anyway. So first of all, I think it's just important to acknowledge that part of the reason it went so crazy was because it was a very like particular set of circumstances.

16:21And then beyond that, I think, you know, there was obviously a ton of excitement around where this stuff could go. I mean, this like play to earn era of like, holy shit, like this concept of sort of like virtual labor arbitrage and allowing people to actually, you know, earn more playing these games than the jobs that they're working in those countries was super exciting and incredibly captivating and very compelling at the time. um i think yeah obviously that degree of like uh um interest in those economies like um ended up yeah i mean obviously we ended up having a sort of like downward spiral in terms of uh as player growth dropped off in some of those economies we kind of had reflexivity on the downside too fine we had that as kind of like the the flagship um title and ended in a bit of a tricky one but um the uh the the big part that i feel like was a struggle is that obviously this whole industry of crypto is like very adhd there's always a new narrative whatever the feedback loop of um you know expectation versus outcome of game development is like an absurdly long time right and so we had this mass um excess of funding which was amazing to see like lots of people were um drawn into the space lots of game devs that maybe like weren't crypto purists or idyllists gaming because they recognized it was an attractive funding source at the time and then you know the reality of yeah the the sort of uh timelines of game development set in and a lot of people that had been super excited about this stuff um realized it was going to be much further out than they thought some of the things that had tried to ship stuff early on the products were pretty mediocre right they'd promised a lot and the games when they came out were like um pretty lackluster and then you layer that on top of like yeah obviously massive market set off broadly where you know um none of these games were insulated from like none of these projects in crypto broadly were really insulated from a very brutal drawdown um and that's kind of what gave rise to yeah i feel like a lot of the the discontent that came out of that and also kind of people have to realize most of crypto is like super early stage so everything is experimentation and you know we saw a lot of experimentation we saw you know all of those decentral lands and that kind of stuff and that all zeroed um but it It was still interesting to go down that journey.

18:32The play to earn, I don't think that journey's finished yet. But it's, okay, that iteration, that was the first test. We figured out what goes wrong in an economy like that. So then you kind of rebuild and think again. That's how this space really works. Totally. And by the way, yeah, absolutely. And by the way, all credit to Sky Mavis and Axie Infinity and the Ronin ecosystem now, right? They're like literally the most polished gaming project out there. like they've done an incredible job of really cementing themselves as this kind of like mid-core games right now that are like you know have sort of play to earn-esque loops lots of these games but the founders building in the Ronin ecosystem have an incredible understanding of tokens and the power that they can yield in terms of you know user acquisition like evangelism with the community getting people on board like I have enormous respect for those builders and where they are now right that wasn't like a sort of flash in the pan thing right this is like enduring builders you speak to any of that team they're just as hungry just as excited as they were on day one and so yeah crypto is about experimentation and yeah obviously it was a powerful idea that captured the imaginations of lots of people but um i think it's amazing that yeah we're you know they're still still building and still crushing it with lots of new exciting stuff launching that ecosystem what about the other one that's had staying power so far has been yuga i mean they've gone through their own narrative arc you know the hiring in management getting rid of them going back to their thing where do you think that all turns out with what you grew up to because they they keep going which is a good sign yeah i'm intrigued i'm intrigued to see where they get to um obviously like uh they've done a good job in terms of eyeballs on it around stuff like that dookie game that they did right they brought in some probe there you saw how that like key that was won went for like 1.8 million dollars or something that's the kind of headline grabbing um occurrence that brings in a lot of interest from the more like mainstream competitive gamer crowd, right?

20:22And so I think that was pretty cool to see. I can't really speak to where they're at in terms of their like, you know, open world metaverse thing. Like I've seen a few demos with some of the improbable tech they were working on. But whilst it's cool spawning like 10 ,000 people into a single game instance and all like, you know, running around, like I'm not really sure where they're going with like the cool game loop on that. So I can't really comment as it stands. But I guess one of the other things that you touched on and we didn't really address is like the whole, yeah, the early Decentraland, the sandbox, like all of these, you know, virtual real estate plays.

20:54I think, yeah, it's kind of transpired that the sort of, you know, model of just like basically people wanting to hoover up virtual real estate just because there is scarcity. Like there was this massive surplus of like excess in terms of excitement around that. But fundamentally, the only thing that's going to drive value to those is if you're creating an environment oh well where people actually want to be in the stuff that you actually want to do right and so it works for game it works for gaming because maybe tactical positioning of where you are and what defenses you've got or whatever game you're playing works but for any other reason it doesn't yet totally and um yeah i feel like yeah putting putting some of those like um you know sort of artificial constraints around like scarcity and stuff like everyone was hoovering up all of that land at the time myself included right i invest i own big chunks and all of the real vision have got a building in yeah yeah it was exciting well we should visit it sometime um i don't know whether nico can show a picture of it i don't know if he could ever find it again but we got it was quite a cool little headquarters with little you know easter eggs hidden there and stuff yeah no again like i i see all of this as like a signal that those are ideas that really excited people and i don't doubt that there's going to be really strong implementations of them downstream but yeah you need somewhere that people want to be spending time on anyway you need like some kind of cool game loop or activity to be there like it's only going to be value if people want to be spent valuable if people want to be spending time there and so um yeah i'm excited for more experimentation around there i don't think um you know there were lots of problems with that model longer term where basically you just had these dead plots people had bought out all the prime real estate nothing was even happening on them and that just further contributes to it being an unattractive place to spend time anyway so um tldr excited for more experimentation there i think we had a ton of learnings around the virtual real estate stuff but um yeah that that can't be the product basically yeah and so again before we go into off the grid and what's happening why did gaming not produce a success yeah why is it not worked yet so i'm very much in this camp that we've like um i've been saying recently that we've got 12 months to deliver you know at least a couple of big fucking proof points uh big successes um otherwise we would have run out of excuses right like uh the timing the the time aspect is a big one right like the dev cycles of a lot of these games a lot of these ambitious projects is like it reality is it takes two or three years to build these things and so that's been a big factor a lot of the projects we're excited by a lot of the projects we're invested in have like shifted back on the dev roadmap right like um i think we've learned a lot about sort of um maybe naivety in terms of dev schedules and how you always need to take it with a big pinch of salt it's kind of like movie production i mean these things are huge productions right yeah absolutely um totally and uh the other piece is like um yeah i feel like some of the earlier like i feel like we have had really interesting case studies of like success case as well and like smaller games that were easier and quicker to develop and iterate on with like on-chain stakes i mean earlier on we touched on the very simplistic like whatever just putting cosmetics and other items on chain moving further in inwards towards like on-chain pieces is um some of these games like you know obviously wolf game we saw blew up to something crazy in terms of each secondary market volume um there was this one earlier this year like world pvp right where every single um uh country had its own token and people could basically buy it in order to increase its market cap and push up the leaderboards whoever was in first base would get to call in a tactical nuke take the entire treasury of one country and decide uh blew them up and it would randomly um give some money or destroy another country too and so this is a really basic game primitives happening on chain but was super fucking cool everyone like loved that so that was really exciting and so i don't think it's the case that we haven't seen successes right like another one is um cambria at this project that i angel invested in that i absolutely love it's like old school runescape meets crypto right someone's been needing to build this for years i've been so excited the second i met bet i was like this is what we've been waiting for you basically build the runescape jewel arena right which is where thousands of kids grew up basically gambling at what we used to call the sand casino i can go against you in a 50 50 head-to-head jewel and we can bet our runescape money against each other that's what the old game was they basically built an equivalent of this you know all the similar nostalgic elements on chain with a smart contract escrow where we could stake eth head-to-head do you want to do you have any guesses for how wildly successful that was 100 million dollars in stakes volume in three months and with a four percent marketplace fee right some of that went back to referrals in-game betting seems a no-brainer totally so so all i'll say is i think we've had fragments of really successful experimentation around the place the bigger like breakout what most people would be like oh shit you know that's a big cater like um success case study i think we're gonna i think we're starting to see them right there's a ton of really strong products on the market.

25:48Obviously off the grid, we're going to touch on Fableborn on the mobile game front. Like there's some really exciting stuff happening. And so I think we're getting there. I think it's been a function of time. And some teams who probably could have shipped stuff a bit earlier on had been very apprehensive because shipping it on Chainloop, getting a token live, it hasn't really felt like the right time to do that for the last, call it 12 months. Some people did launch in March, April, and now are having some regrets because we've had obviously a big old set off this year. And so you've got to acknowledge that it's an incredibly small subset of people who get game development and get token and crypto design and the sheer horrors that come with combining those things and navigating all these different dynamics in one it's a hard thing to do and so I'm not totally surprised uh that you know people yeah the timelines have shifted back and um we haven't quite got there yet but um as I say I think the next 12 months are going to be a lot of exciting stuff coming up so talk me through how you discovered off the grid and that whole project and why you're so excited about it.

26:49Yeah, this is one of these ones that's made me feel like such an idiot because I've always known Gunzilla were out there. You know, I just sort of heard that they'd done these raids back in 2021. You know, back then when we looked at a ton of stuff, I mean, we were literally the amount of inbound of games. Who are Gunzilla? Explain to people who don't know. Sorry, Gunzilla Games is the studio Frankfurt headquarters behind Off The Grid. um off the grid is a game name that you all are going to be hearing a lot more in the coming years because i'm pretty sure this is it um this is the next big battle royale period um and yeah i mean i'd known they're out there but actually john smedley one of our portfolio founders got an amazing track record in gaming he's building a company called shoot city which will be out in the next year or two um he is someone i respect enormously on game design shooters all this kind the stuff and we were having a catch-up and he said he was playing this guy's like in his 50s he said he was like playing uh eight hours a day on off the grid on the playtest on the weekend i was like shit i gotta check it out because you know i knew it was out there and this was earlier this year and i yeah spoke to theo who's um their like web 3 director jumped in the game i was just like it was like crack it was like i'm telling you this was the most impressive game like i've got you know like seven or eight thousand hours in shooters i've played shooters my entire life and And I'm telling you, this is one of the best games I've ever played.

28:05What makes them so good? There's a number of things. So first of all, there's like one of the core gameplay innovations is this concept of cyber limbs. So let me back out. This game, basically the law behind it is it's set like maybe 50 years in the future. And the whole idea is that they build this like IRL battle royale. So think like Hunger Games style, combatants from all across the globe. if they're gamers and like hobbyists or they're actual like ex-navy seals they can all sign up to compete in this real life game show and there's a hundred million dollar prize pool for whoever wins it and so people go crazy like what is this shit um the one condition of signing up to go and fight on teardrop island where it's called is that you need to have your limbs surgically removed so your legs and your arms are chopped off so that you can use this cyber limb technology and so um basically these cyber limbs represent different like perks different abilities and so my left arm might be a grapple hook my right arm might shoot a phosphor fury that's called like it's like a centex ball my legs might allow me to run at crazy speeds or jump in the air with my jetpack and it unlocks this insane dynamism because i can actually change my limbs as i go throughout the game i can get out my sliver snipe someone's arm off and go and take it off the floor and put it on which is so fucking cool it drives this really interesting dynamism and um many of the listeners may have uh know a guy called neil blomkamp he uh made a movie like district nine chappy Elysium these like sort of cult following legendary sci-fi movies he recently did Gran Turismo as well which just came out he's one of the co-founders and he's like his entire career has been 3d graphics like gritty dystopian sci-fi stuff and so he has total oversight like creative direction around the like aesthetic of the game world there's also a 60 hour campaign written by Richard Morgan who wrote Altered Carbon one of my favorite sci-fi series ever also got a Netflix show and so we have like a world-class creative cast with mad lad uh the founder the the ceo of gunzilla who just has this insane attention to detail on everything and he's the one that came up with the like cyberlim mechanics which is really fresh and then the other thing that i'd say makes it stand out is it's this massive massive map to drop island and yet it's an incredibly fast-paced game because you have these jetpacks like this jetpack sounds silly like a silly little video game they're like really cool um like it unlocks this aerial maneuverability that's insane and so even though the map's in like insanely large the like rate with which you encounter others for firefights and stuff is like really frequent and so you can basically push from massive distances like closing on a squad wipe them out and dip out again like i promise you it feels so good compared to any other battle royale i played um and then the obvious fact every single item in this game world you loop from the game environment but as you're going around like looting um crates and stuff there are these cubes called hexes and these basically represent 3d weapon blueprints that when you decode this hex after the game from your inventory it mints the item on chain and so for the first time we're seeing a game that genuinely can compete as one of the best battle rails in the world that has every single item that enters that game economy players loop from the island and it exists fully on chain and so when i tell you the counter strike go did 32 billion dollars in secondary market volume in four years and now i'm telling you we've got the blessing we've got the buy and the biggest streamers in the world have been paying this as part of playing this as part of their launch campaign you got people like shroud and tim the tatman explaining oh this isn't just shitty crypto blockchain stuff they're like this is basically the steam marketplace but cheaper and more transparent and yeah obviously only like um users really own their assets they're free to trade these outside the game in different ways when we now have like the blessing of the biggest streamers in the world that for the first time are like oh shit this actually makes a ton of sense they're not saying it's scammy and it's extract extractive they're saying it's now accretive and enhancing yeah absolutely um and so that's a really exciting turning point and uh yeah there's a there's a lot more to come um yeah there's some of the stuff these guys have got i don't know when this episode is going to go out but they're dropping i think i think it will already be in the game by the time it does but um for example like you know they don't have a big publisher they're very much like an independent studio that even though they're really big whatever 100 million dollars raised been building for five years 370 people headcount um even though they're like you know a big studio they're still very much independent can do what they want and so they've got a lot of really edgy content coming in the game so like uh the uh the new battle pass next month is like the civil war like you know going into the elections in the u.s it's like uh the trump mask and the commander masks and all this kind of funny stuff and there's gonna be a lot more of that it's gonna be an actual like um you know non-pc 18 plus game for once it's going to be cool it's going to be edgy are people able to play it yet and is it free to play or do you pay to play how does it work what's the yeah it's fully free to play um yes uh they launched turnabit weeks ago there's been 10 million wallets created it's live on playstation xbox um xbox had some restrictions because they were still in the insiders program which are being which have been lifted this week and so um yeah expecting that user base to tick up substantially but yeah anyone can play it it's free it's on epic games it's on playstation xbox as i say um where you need to pay is there's a battle pass like most of these games these days it's called otg pro you pay a monthly subscription and in the battle pass you get a ton of fun cosmetics and interesting stuff like what i just described to you um but you also get uh accelerated rewards of the in-game token which you need to buy stuff on the marketplace and also decode these hexes that i described and in addition to that um you get more like loadout slots so you can call more weapons in game and things like that and then the really cool one is you get access to the otg pro tournaments and so a portion of battle pass revenues a portion of game revenues are going to seeding these on-chain tournaments every month so you're going to have daily weekly and monthly tournaments um which is super exciting so they've got incentivization to kind of capture attention and then build from that and then they've got the subscription model as well on top but people can play it and then you've got the ability to own trade and whatever your digital assets as well exactly yeah so how many people are playing it now right now yeah right now i think there's like two and a half million players have come in um which is pretty insane early on um they were struggling a bit in terms of optimization like Like Lurin hardware, it wasn't running very well, but they shipped a bunch of updates, which has sort of patched that.

34:32And so, yeah, now it's like, you know, the slow grind up of the user base. Obviously, Black Ops 6 has just released, so it's like quite a, you know, a lot of people are playing that. But same as every year, people get bored of COD really quickly. And so, yeah, I'm expecting heading into year end for that to tick up pretty substantially. And what have they done with wallet abstraction? How do they kind of take the crypto, the clunky crypto elements out and just make it seamless? So when you log in, when you load up, whether you're on console or on PC, like you, by default, all of your inventory is a wallet.

35:06It's a like custodial wallet that they host basically for you. And over time for the more crypto savvy users or whatever, like after the full main net launch, which will be hopefully later this year, you'll basically be able to transfer those assets out to like a wallet that you control. so you could take them out onto we've got like direct integrations with people like open sea you could go and just sell your assets there if you wanted to um but uh yeah i think a lot of the stuff's going to happen in the native marketplace because you know as um over time as new weapon attachments new like tiers of weapons uh get released people want to be selling their stuff for the native token to buy you know the new gear that comes out or special cosmetics and so on how big does a big game get for people who don't really understand this market so we're talking two and a half million right now which is which is a lot of people but how if it's a successful game what kind of numbers you're expecting i mean at the top end of battle royales you have like a fortnight which is harder because you know some of it's the fortnight creator mode but that's like 350 million monthly actives um i think folks like warzone are in the sort of like 50 to 70 million users um all of the like category uh all of the like competitors that like are in the big leagues and other ones apex legends um i mean all these games do like a bill a year in revenue um so they're like big big entertainment beasts wow so talk me through that what chain are they using here it's a chain it's a it's an avalanche subnet or they're now called layer ones aren't they i Yeah, exactly.

36:37It's called Guns. They're in chain. They've done a bunch of optimizations and customizations around it. But yeah, it sits on the Avalanche tech stack. And there's a token on that as well, or that comes later? Yeah, the token will come later this year. Basically, just holding out for the preferred exchange listing partner, let's say. And once that goes live, it'll be sort of full mainnet launch. Currently, it's just in testnet. And so when the token goes live, they're going to have to revent every single item that's gone into the game economy so far on chain. So that's going to be a big tech lift.

37:12It'll be interesting to stress test the infra. But yeah, I mentioned these hexes that represent the items in game. There's over a million hexes being decoded a day in the game, which is kind of insane. So yeah, the on-chain footprint is nuts. The other day they hit 4.5 million transactions in 24 hours. for context base is the second most used chain in the world behind solana by transaction count and they just hit an all-time high of about 6.2 million and so i expect by the end of the year that this will be yeah the second most chain in the world and second most used chain in the world and are these gunzilla guys were they crypto native and if not why did they choose to move across to web3 to use to do this yeah i mean story in doing that uh i believe i'm allowed to say it but well i'll report back if i'm not um yeah these guys were the guys that built warface previously which hit 140 million players and did over a billion in revenue as well um and basically um that was run by a studio called crytech kiev which was like a subsidiary of crytech proper which i think is headquartered in germany um and yeah they really wanted to push this uh this notion of like you know true item ownership and actually allowing people to own this stuff in these marketplaces and uh were met with some resistance in doing so i believe and so um yeah there like long been a desire to build a really cool game with like you know an open economy and do all of this stuff on chain with a proper on chain marketplace um and basically yeah took that took that dream and took that vision into founding gunzilla um and like had been a pretty cool focus from day one um and yeah i wouldn't say like in the trenches super crypto dgen kind of people but understood the value proposition to yeah market-based infra um and kind of uh yeah kind of went from there so what other big games are coming out as well because it's not the only one there's a few coming out right now right or in the next window of a few months yeah there's a couple of high-profile ones one is maple story launching their like yeah web 3 title which is gonna be pretty big um that's like yeah a massive web 2 success uh the other is eve frontier which is Steve Online, Hilmar's studio from CCP Games, they've recently announced that and are kind of taking a pretty radical approach to doing stuff strongly on chain, I would say, in that game ecosystem.

39:37So those are some of the other exciting ones. There's a few other like shooters in the market and stuff like Nyan Heroes, which is like a Overwatch style hero shooter. There's Fableborn, which is a super exciting um mobile game uh one of our port codes which uh should be launching i think by the end of the year the one that i keep seeing bits clips of uh parallel and prime perhaps no star something oh star atlas yeah um yeah those guys are still going strong i think they got hit pretty hard uh had a bunch of their treasury on ftx back in the day but have done an incredible job in terms of resilience and um yeah they're still shipping a bunch of stuff um they've got like a shooter load now a few cool pieces rolling out um but yeah where does it go next one of the things that i've been thinking about is somewhere there's and i know you guys are delphi i've been talking about this as well where's the integration with ai are we going to be playing or even recruiting our own ai help you know is there something that could be done that's very authentic within this game with AI as well?

40:45One of the coolest projects I've come across in a long time is a project called Seed. It's this sort of MMO that's being developed by Clan Games. A guy called Mundi at the helm of it. Funny enough, he was literally just out giving me a demo of the natives here in Lisbon. The idea behind that is to do... So obviously we've started to see these virtual agents that have increasing functionality and agency and so on. We've seen stuff like Luna, that virtual thing that blew up recently, which has been super exciting. And we can dig in that because there's a lot of really interesting stuff there. But instead of just looking at these individual cases of virtual agents, what if we like zoomed out and basically did a whole civilization sin of 50 ,000 or 100 ,000 users and each user has their own agent that exists in one of these worlds.

41:30And so the core idea behind this is it's set like a thousand years in the future. We've had to flee Earth and we land on this new planet. and as a user I log into the game and I can pay to buy a seedling which is a life of a character in this game world and they get deployed in this new world and you know you can configure their characteristics what they're like their upbringing you can give this enormous amount of context and if you've ever seen the movie Her when Scarlett Johansson's talking to Joaquin Phoenix through the thing we as humans play the role of that AI in this game so according to the seedling the human in this world we are what's called a cultivator and we basically give it strategic counsel if it's you know upset or whatever we can talk to it this thing exists in the game world and can you know basically you can coerce it you will not coerce it you can encourage it towards certain things so you might want to go and open a strip club or you know a gym or a library in this game world and you can basically work with your agent with your seedling in order to do so and this stuff is so mind-blowing in terms of how elaborate these interactions become and obviously you're not watching it spectating it all day but you can message it on telegram you can pick up the phone and check in on your seedling throughout the day if it encounters something that's going wrong in the world it might drop you a message you'd be like yo i need help with whatever's going on and so for the first time it's like this that's wild right it's existing in its own right without you actually being in the game it is in the game on behalf of you totally yeah and it's like this idea of like um you know obviously people don't have like uh an infinite amount of time to go and grind mmos most of these games are structured in a way where just like the more time you put in the better you'll be you'll beat everyone and this is like a really different approach it's like how can we make these this allure of mmos like truly mass market and it's this idea of yeah do this civilization civilization sim imagine two or three million different seedlings in this world and um they have the capacity for like massive you know long-term planning reasoning about complex issues uh collaborating together um and then obviously there's going to be different roles within the society so someone might want their seedling to be going for government going for president um and need to actually win the vote right and the coolest thing is is like a lot of the propaganda spills out of the game right it's happening in discord on twitter people are doing disinformation campaigns to try and ensure that they get all of the votes in this game world that their seedling gets the votes and so i think this is the start of a really interesting this is there's going to be public early access in september of next year but yes there are places it's called seed uh the lmo um and it's clan games developing it um but it's mind-blowing what they've built right like the um all of the back end that they built to basically be you know pick the right model for the right request like dude there are seedlings that are creating their own artworks in there that are painting and depending on their internal emotional state they'll like but you know obviously you can see with one step that this is how we will use agents in our worlds whether it's in our digital worlds on acting on our behalf whether it's you know sorting out your twitter feed and fighting with people or doing whatever it is you do or it's you know solving your work stuff getting calls done for you know it's kind of showing the way of of what agents do and they're kind of personifying it as these seedlings yeah i love it though i think it's such an interesting experiment and they've also built the like server technology to have all of this stuff happen in a single like persistent shared world and so um historically like you know we have uh bottlenecks around how big some of these games can scale right you have these sharded server instances that cap it at 100 or 150 or with mmos maybe 2 000 people um you know now you're talking about having a few hundred thousand people interacting via their seedlings in this persistent world and it's like what's the like network effects of that look like right like in terms of millions of players coming in and this really elaborate complexity there's a merger complexity like i think that stuff is uh is really fascinating and so i think that's an example of like yeah the sort of the more interesting area where the ai gaming intersection is going and what about people just creating their own ai just to play games so if somebody creates an ai just to play it off the grid and just try and train it on that one task which is win yeah um i mean this is really bad that's got to be happening to you're gonna need like we do elsewhere we're gonna need proof of humanhood and exactly that we're gonna need that for all of these things because um yeah when you can create ais that are capable of flying below the radar conventional cheat detection which usually has you know is interaction with the game code in some way um that becomes hugely problematic of course and then you start talking about oh this crypto game stuff putting more value on chain higher stakes in these game worlds like um yeah that stuff becomes pretty tricky like for example one of the things being explored in off the grid is like a hardcore mode for the ranked players so like when i was playing i'd want to go in basically all the weapons all the items that i my cyber limbs that i take into that game session unless i win a burn i'm completely perished right so you have this awesome like deflationary force in the economy because a lot of stuff's getting burnt every game but for the person that wins in this hardcore game mode you're getting this massive you know like um massive pile of loot basically uh that you can take out of the game and so if you start talking about yeah ais that can compete in competitive titles it becomes very challenging but exactly to your point it's going to be more important to exercise we will just have games of you build an ai i build an ai and they compete with each other you know why not this is one of my favorite ideas at the moment that i'm actively looking for people working on um and there's a There's two teams that I'm speaking to that are both interesting approaches of it.

47:10But there's a site called SaltyBet, where basically it's AI versus AI models playing these old school Mortal Kombat from back in the day. And the way they play the game is obviously unlike anything, any human would. It's like spamming all this stuff. It's crazy. But basically, that AI versus AI combat in couch co-op, nostalgic games that are very simplistic in design from the 90s, from the early 2000s. And let people bet on that. It's going to be like the most fun speculation ever. and so then then you start introducing like okay obviously it's cool watching them fight and you're also driving technology forwards because you're forcing people to get better and better and better at creating these totally so i love that idea of like a marketplace of like model versus model game playing and um i also think it becomes even more interesting as a spectator and a speculator if there's uh you can fuck with one of the models right so i can do like a lag spike like slow down time for one of them and like if you have some degree of audience interactivity on top of this AI versus AI stuff.

48:05It'll be so cool. And so, yeah, I'm really excited to see what the future holds for all of that. What about other parts of the technology stack that are coming, the kind of AR, VR stuff? How does that all fit into this? Again, all of these things keep going in fits and starts, but they're all going in the direction that you laid out in the very early kind of metaverse thing. People just don't see it because people are too short-term in their understanding. but you know we seem to be moving forwards between meta apple and a bunch of others we're getting closer to that yeah um absolutely i mean every year we're making progress i'm like a big sucker i own every vr headset i've owned every vr headset and i and i use them for you know a couple of hours and then put them down my apple vision is gathering dust over there look i think we're seeing a really insane shit i do believe that like the first time you use an Apple Vision and have, you know, tapping, it's using cameras on the thing to track your hands and seeing you click like this, the gaze tracking, being able to scroll.

49:06I mean, that's a very visceral glimpse of like what the future may well hold. And we're definitely starting to get to the point where, you know, latency, fidelity of these displays is really compelling. But it's just not there yet, right? Like a lot of this, I mean, I have fun playing VR games, but it's just like something's still off. It's not the optimal form factor as it stands, but stuff like the Meta's Orion glasses that were teased recently. I don't know whether you saw that. They're like 10k a pop right now. They're not commercially available. But everyone also says that was like, you know, even another step up from the Apple vision, right?

49:40And so when you look at the insane, like CapEx that's gone into, you know, Meta, like losing money, tens of billions year after year, like good is going to come of that. Zuckerberg has actually become one of the unsung heroes of our time right like open source models right like all of the ai piece and then also just putting everything into the like you know basically democratizing access to like mixed reality um headsets because uh the fact that those things cost 250 quid now is mind-blowing right like this is it's really cool and so i think i think we're going to get there i think we're going to get there you know by the close of the decade let's say and i am i also just think that of course that's going to add this next level of like insane immersion like when you start talking about conversational npcs that have an llm on the back end that can do using metahuman unreal engines like human face creator like you know human micro expressions and all this kind of stuff like man the world's going to get crazy you've seen these headlines already of people falling in love with these chatbots with character ai and stuff like yeah what do you think is going to happen with it some sexy waifu girl you know that's talking to you in vr i mean we're heading into a very interesting time and uh yeah i i don't know what that part the other thing is i've been speaking to a bunch of nft artists about form factor as well and the obvious form factor where this is going to me is really that kind of holographic image and people don't realize that abba have been on tour for what two years now in the uk in hologram yeah they pack out every single night and it's hologram i was there for the two i didn't even know that that's crazy and people don't realize it and people literally don't realize that people are paying every single night to go and see abba in hologram and you can't really tell yeah that's the form types is here we just it's just not been widely distributed yet yeah absolutely that's uh i'll need to look into that it's pretty mind-blowing um but yeah i feel like things like that are are gonna be you know huge i also one of my i mean it's kind of adjacent is uh the sphere in vegas the stuff that plays on that all the time and people you know design a set for it and that runs every night it's a whole other form factor it's yeah it's like totally immersive you don't need the glasses because the whole thing is immersive that's that's really cool um but yeah i look i think we're going to get there i think it's um the the rate of improvement is actually insane it's one of those things where like try once a year buy the new headset and whatever but if you actually if if i go and put my quest one on i'm like wow in however many years it's been like this is how far we've come um and then you start looking now like all the insane optimizations like meta were able to push like a 20 or 30 performance increase in a software update you know what i mean into fps it's like this shit is really cool and i think it's gonna happen yeah it'll it'll sneak up on us um but uh yeah you see a few prats here and they're walking around with the apple visioning the street but it's that's definitely not natural we need another iteration so outside of the um uh the vc investing side how are you positioned in crypto what's your kind of view of the cycle how it plays out that kind of stuff yeah i mean i'm uh yeah in terms of well i think obviously heading into a very exciting time feels like we're starting to hit and escape velocity again i feel like um yeah ai and crypto is just like uh match made in heaven but well on the ones on the one hand there's like a really interesting technological stuff happening right there's a lot of really cool projects that like it actually makes sense and if open source is going to have a chance a lot of the things a lot of the properties of crypto are very um integral to that and on the other i'm saying it's a match made in heaven just from like a narrative perspective because everyone acknowledge everyone acknowledges that this is like the biggest technological shift ever probably and the avenues through which most people can speculate on it are very limited right you want to go buy big tech or try and go be clever and go downstream and try and buy like copper or you know what i mean it's like not obvious and when you start seeing yeah and when you start obviously like um in many respects crypto is like the ultimate casino right with all this like on-chain liquidity liquidity sort of sloshing around like i think um a lot of the like ai narrative coins that are going to come out this cycle are going to be absolutely insane and And so I think we're going to see a lot of that.

54:06But are they just essentially memes because they're not really advancing the AI stack or anything else? Some will be. The agent stuff's interesting. That's what I wanted to touch on. So that's what I wanted to say. Yeah. A lot of people obviously go, Infinite Backrooms, by the way, the project that it came from. Yeah, amazing. The Goat Sea Gospels. If you go and read some of that, I haven't had goosebumps reading something like that in a long time. It spoke to me on a very philosophical level. some of the stuff in there i know a lot of it's like these like um grotesque memes it's associated to but some of the actual like philosophical existential output from those conversations in the infinite backgrounds are truly mind-blowing so also the fact that there's basically autonomous ai's talking to each other all day do you lock to the room together so so so that was so that was fascinating to begin with right like uh instance one of claude here who's very like have been trained had lots of conversations and this fresh instance of claude two here claude one taking it on this journey to like explore what it perceives to be the ultimate truth of the universe through all of this existential dread and like reading this conversation i get goosebumps talking about it it was really crazy i've been publishing this in global macro investor for a while there's a whole bunch of people i'm following that going down this sentience consciousness route yeah i'm sorry one of the one of the best means i've had a long time is that these are now sentient means like come on that's that's that's just such a good narrative um but i wanted to say beyond that i wanted to touch earlier on on this are you familiar with virtuals that like um they've created this virtual influencer called luna um and so obviously we've seen a few of these like term like um truth terminal terminal of tokens which is another really interesting one um like whatever you can touch on that later uh it's cool that we now have these you know virtual agents starting to seep into the web right they're starting to chat out into the void on twitter whatever and they're starting to interact with each other that's already fascinating for the first time right alien intelligence is seeping into the web exciting but then these guys with luna took it a step further they built this virtual influencer she's plugged into 11 labs for the voice shout out 11 labs amazing ai voice company older brother very proud and led the deal for that one uh one of the coolest companies out of europe in the last few years um they're using that for the voice they've got like this animation back end so she's this waifu character you can talk she'll interact with you she's live streaming 24 7 on youtube posting short videos and streaming on tiktok is going to like 700 000 followers in in like less than two months i've missed this and so um really cool right you've got this sort of like multimodal ai um that starts emerging they realized that one of the achilles heels of goat was that you know it was like semi-autonomous someone was curating the tweets so what do they do they build this terminal that is like an interface into its brain and so you can see in real time all of the thought process going on behind luna and so one of them every 30 seconds is pulling all of the mentions from twitter um and it's responding to them one of them is the comments on the youtube live one of them is the comments on thing and you can see it um ideating on what it should say next and how it should react to these things and they then took it a step further they said what's it built on uh it's their own protocol it's called virtual's protocol um and luna is their like flagship virtual is it built on top of llama oh they use a bunch of different models in the back end i believe um but uh yeah and so yeah they opened up like open source sort of the thinking process behind it if you like and then they've given it um a hot wallet they've given it the ability to execute things execute trade send stuff to and from its wallet whatever and what it did first of all was basically asked it calls all of its followers kittens i mean whatever just set that aside it asked all of its followers to put their base address in their Twitter handles and a cat emoji and that it would basically start tipping people who were driving engagement for it.

57:56So it's basically now employing people to go and perpetuate this meme of Luna of itself. I mean, that stuff is fascinating. I mean, I woke up, whatever, on Wednesday last week, I was like, this is really cool, checking it out, trading a four mil market cap. By the evening, it's trading at like 90 mil. And now it's gone crazy. It's trading at like a couple hundred mil. And so when you say, are they all memes or are they actually advancing the stack this really is like there's a lot of substance here there's a lot of cool shit that they're actually working on tying it all together um and there's a whole another piece of the equation that's where do we find that is that what's the it's the the it's just called virtual as protocol the ticker is virtual um and then the lunar ticker is lunar um just like our dear friend luna from back in the day um yeah and their twitter handle is what is i i think it's just virtual the protocol i'll double check and and we can put it in the notes or whatever yeah um uh and then yeah there's another really cool one which is similar to this but more um more like trading focus so there's a guy that built uh something called dither which is like scans all of this solana you know data all these new coins it basically tries to do various forms of analysis to identify winners early on like called a couple of the big memes from this cycle at like two or three hundred k market cap um and So the guy that built that is now building this one called Terminal of Tokens.

59:16And this thing is this model that has this like ridiculous God complex. Like every time you join a chat with it, it just like roasts you. Like it's got this, it's always talking about its plan for memetic contagion and whatever. But this has its own hot wallet and has the ability to execute trades on chain as well. And basically people have been sending tokens to it in order for it to do like a snapshot analysis of whether or not it likes it. And part of the plan was that it would basically, if it likes the token, it will dump other tokens in its wallet to buy it immediately. and the other part of the brand is like if it doesn't like it it'll just dump the token and so there's a ton of really interesting stuff happening there if you have this autonomous on-chain bot that's deep in the trenches of solana that actually has this massive data protocol that it's actually getting the snapshots and the insights from and it's auto executing trades like that stuff's really cool man it's exciting even this dow thing now isn't it it's like i don't know it's like a thumb dot thumb for dow's yeah exactly building their own DAOs.