Investing in gaming - Web3 perspective - Zamin Jaleel, Gaming investor, KubeVC

investing in gaming this is interesting do you want these mics whatever you get no I don't get whatever you want Hello you think it's good yep yeah um and you've got your clicker there um the green big green one to go forward yeah hello hey guys I'm from QVC I manage the web 3 portfolio um I lead the web3 strategy portfolio construction really focus towards gaming nft D5 both tokens as well as equity you know there's a report by Convoy recently that you know I find fascinating to see I think the investors in gaming are sort of now have doubled down and tripled down with you know Convoy sort of

reporting that you know the market cap the market um for gaming was 184 billion dollars in 2022 and you know it's at an interesting point right where there's recession and the markets are down but what we're seeing is that gaming is probably one of the most resilient industries that exists in today's world and I think that's the opportunity and what fascinates me more than anything else is you know I think the LTV of those customers which is lifetime value of those users that you know at such a young age where kids are now playing games you know at for five six seven hours a day and it becomes the digital sort of interaction right right after school they go back and play games in school they're playing games I mean look I grew up playing Cricket for UAE for about 10 years and if it wasn't playing sports then for me the easy go to was playing Counter-Strike or um Counter-Strike Call of Duty um recently you know for the past four or five years been playing fortnite as

an example and it was more of you know the social experience that drove me towards understanding what it looks like and how do you really take advantage of and you know the younger generation and gaming sort of allows everyone to come together so here you know we're seeing that there's an accelerant and it's exponentially growing no matter what the markets have to say and yeah I mean look the global gaming landscape is just been thriving right we're close to three billion users more than three billion users today and it's only going to grow I mean it comes from everything from Super Hyper casual gaming to core games itself and what was interesting about you know the stats that I was reading about the Middle East specifically was most of them are actually women um I think I think if I'm not mistaken it's 35 of people in Saudi are women that are playing the games and to me that's fascinating it's something that you know

we haven't seen before and here's an opportunity for us to take advantage of you know the ever-growing ecosystem in gaming you know it's tough but listen I think the market is a very interesting inflection point right even though we're seeing early stage I guess it's necessity is the mother of innovation in these cases where you know gaming at the very early stages there's money being deployed Left Right Center into you know Finding product Market fit and unlike you know Venture investing is tough anyway but gaming makes a tenfold harder I guess because you really have to pick winners and it's far in between that you're gonna find an outright winner I think you have to back the teams that really you know are fascinating with innovative ideas right we saw something called axi Infinity back in 2016 2017 that you know they started off something called play to earn in 2017 and 2018 no

one really cared about blockchain gaming but The Innovation being at the Forefront of you know using uh the blockchain technology to see if there was a market was fascinating and look um they've gone through a hard time but I don't think there's a better team than Sky Mavis to go and figure things out to go and build the foundation like they've done right um I don't know if you guys saw the latest news but you know axi is being integrated into the app store which to me is fascinating I think it's a testament to what those guys have built and um you know being resilient in an ecosystem where the upside is so much more and creating the foundation not being afraid to take the risk and finding ambitious Founders I think is the most challenging aspect right Sky Mavis could have you know shut down and moved on but I think the ultimate resilience is what allows them to continue to thrive and say you know let's move on let's go build again right

I think here even though we're seeing late stage deals being crushed uh both across web 2 and web2 right whether we look at the token side gaming tokens are probably down 90 95 percent unfortunately and even from the Venture investing and late stage deals with seeing significantly much less deals being done but earlier and earlier we're seeing the best deals at you know reasonable valuations that allow us to take a risk and unlike you know 18 24 months ago where the terms were more favorable for the founders here's an opportunity for Founders to you know level the playing field in terms of you know working with the VCS and choosing and picking which Founders that you know the VCS want to interact with given that there's conviction in the space I'm gonna go take an example of something in gaming that you know has been a big almost like a issue for me right something like you know where FIFA where

you know I spent thousands and thousands of dollars playing ultimate team year in year out at the beginning of you know August we end up buying FIFA whichever Edition fast forward nine months 10 months the game the width is zero right in the sense that the assets that we've bought are basically zero today um and you know 2021 let's say let's take the example of last year you know the game of FIFA 22 came out um 23 came out right um we spent thousands and thousands of dollars what ended up happening was you know come August now those assets are worth zero if there was a way in which digital ownership across games can become Collectibles I think it's a fascinating space and I think look the bigger folks in the industry are not gonna just jump in because I think it's integral to their brands and understanding how do you really take advantage of you know ever moving technology at the pace in which it's being Innovative is very tricky right

um I see a world where FIFA Ultimate Team and the NBA and all of these guys come together where the assets live on chain where the game doesn't have to live on June um just specifically to the example of you know FIFA and NBA um here here lies an opportunity for these guys to make the nfts become Collectibles um with you know me having a Ronaldo card of 99 is extremely valuable and by the time the game you know the new game comes out that's what zero and I wish that gets changed and I have no doubt that it gets changed in the short time you know I think the ownership aspect of it is extremely fascinating and no one's done it um well yet but I think you know we'll see a huge change towards it and the other aspect of it is community right more than anything else more than any other time in the world here's an opportunity for you to really build community um you know we learned a lot of mistakes that we did in you know the past three years which was um you know maybe doing the icos idos

was too early raising Capital too early through uh through the community and I think as long as you're not hurting the community and working with the community build something meaningful their lives the biggest opportunity opportunity even though there's High barriers of Entry um you know there's there's such a unique position at time where everyone within the gaming sector has to come together bring the best Solutions whatever happens there is such a unique opportunity to be at the intersection of gaming and blockchain and look ultimately if if there is less than 100 million less than a billion users in three to four or five years we've actually failed as an industry in gaming specifically so as I mentioned I think you know the 100 billion 100 million 100 billion um that number is very you know it's close we're at 8 billion today I think you know fast forward three years I don't see how the gaming sector if

executed well doesn't become a trillion dollar industry I think you know if we read it where alien worlds only has one ninth of you know Minecraft games not to say that listen I think Roblox is truly a testament or Minecraft have done so so well in capturing the younger audience which is the most fascinating thing you know actually Infinity as much as you know people want to call it Ponzi I think they were the closest ones who showed us that there is a there is a way in which you can integrate the blockchain again did they were too early they made a lot of mistakes but I think they rectified in the long run right and how we how we drive adoption is actually through combining what worked in web 2 and taking it to the next level and there's a world in which you know the web 2 web 3 have to come together you know I actually hate the terminologies of blockchain gaming crypto gaming I think it's just gaming as a whole that is so fascinating as individuals as you

know team players as everything is you know gaming essentially has to be the bridge in which you're able to communicate right and today from what would from the stats that we see in the numbers that we end up seeing what we see is that a lot of it is actually speculative right it's not true Gamers um but it's going to change one way or the other you know we have all of these chains that exist right the binance chain um Solana and Avalanche and you know we see great games like Godzilla or sharpnell and axi and all of these games that exist But ultimately we're looking to find which gaming chain wins and um today I think the founders actually have a unique opportunity which is choosing which chain they want to build on whether it's Solana whether it's Aptos or whether it's missed and they get to choose and you know they have there's a world in which you know all of it comes together in a multi-chain world and the only way it works is if everyone builds

together right yeah just to show you some more stats that gaming you know as long as the game is cool um The Gamers have a fascinating time playing those games where we ultimately see is that there's never going to be one chain you know today there's not a single chain that has won the Battle of gaming um here I think you know as as a VC investing in gaming what we see and understanding from the folks at the chains that we spend time with there's still not a clear outright winner and we're looking for that winner the day that whichever chain ends up finding the best game that reaches 100 million users you know 200 million users that chain ultimately wins the Battle of um you know as you would chain most people would recognize and understand you know how to do it but today in in today's world what we see is there's a

unique position for all of these you know it's a Level Playing Field for all of the ends I don't think the grants and all of those are what allow the use the games to become fun the games have to be you know the core mechanisms and mechanic mechanics have to make sense as you know the core games develop itself so I was looking at you know who's raised Capital recently um and we're seeing you know funds like bitcraft like Convoy play double and triple down in terms of investing in the space and it just shows shows you that um the investors that were there for a good time are no longer there um the investors that wanna believe in the space have conviction have all doubled and tripled down on raising larger larger funds because at the end of the day look no one is going away uh whether it's a bull market bear Market the players that we see in today's world are working so close to each other

trying to look what trying to find out what the next 12 18 24 months look like and then taking a long-term approach as well right the household names today you know bitcraft Convoy play Courtside Sequoia Excel we've seen these guys Double Down triple down and there's some of the most sophisticated investors in the space where we have no doubt in is we're going to succeed one way or the other and you know I think it's in the betterment of you know all the games all the Publishers and we see that market being already adopted in web 2 and how do we translate it how do we take advantage of it in web3 is what you know to me is most exciting