WEBVTT - Animoca’s Betting Big this Crypto Winter 0:00:02.680 --> 0:00:05.840 This is Bloomberg Crypto, a daily Bloomberg I heard podcast, 0:00:06.120 --> 0:00:09.600 and I'm Stacy Marie Ishmel, Managing editor of Crypto for 0:00:09.600 --> 0:00:30.280 Bloomberg News. It's Thursday, October six. How do you go 0:00:30.360 --> 0:00:33.680 from video game studio to major crypto VC investor in 0:00:33.720 --> 0:00:36.960 the space of a few short years. That's exactly the 0:00:37.000 --> 0:00:40.120 path that Anamoca Brands has been on. Since its founding 0:00:40.120 --> 0:00:44.120 in two thousand fourteen. Anamoca has expanded well beyond making 0:00:44.159 --> 0:00:48.400 mobile games into owning and operating a portfolio of investments 0:00:48.400 --> 0:00:53.080 and acquisitions that includes more than three hundred different finance, 0:00:53.159 --> 0:00:57.840 gaming and social media companies. Yeahs, Anamoca's co founder has 0:00:57.920 --> 0:01:00.240 as a result, become one of the most influence chill 0:01:00.280 --> 0:01:05.759 people in technology. Bloomberg reporters Jumping Juang thinks we can 0:01:06.560 --> 0:01:11.280 digitalize your ownership of your tokens and assets in a 0:01:11.440 --> 0:01:15.920 way that everyone will has to property ownership and their 0:01:16.040 --> 0:01:19.640 data is not controlled by a centralized company. Joins me 0:01:19.720 --> 0:01:22.240 now to chart the path of Anamooka and its founder 0:01:22.400 --> 0:01:35.800 from indie game studio to crypto conglomerate. So good to 0:01:35.840 --> 0:01:38.240 have you on the show. Why don't you introduce ourselves 0:01:38.280 --> 0:01:41.360 to our listeners. Hey, everyone, excited to be here. I 0:01:41.840 --> 0:01:45.600 jumping Juan and I'm covering Asia technology and the crypto 0:01:45.959 --> 0:01:49.000 out of Hong Kong. Lots going on in Asia technology 0:01:49.120 --> 0:01:52.520 at all times. You have a pretty busy beat, but 0:01:53.120 --> 0:01:58.040 lots going on, particularly as it relates to crypto and blockchain, 0:01:59.400 --> 0:02:03.600 especially in terms of a company called Anamuka Brands. Why 0:02:03.640 --> 0:02:06.680 don't you just tell us a little bit more about Animoka, 0:02:06.920 --> 0:02:09.360 about their founder and why they've been in the news 0:02:09.480 --> 0:02:14.160 so often recently. Yeah, So Animoca is like Asia's biggest 0:02:14.320 --> 0:02:19.000 blockchain and webstree gaming master and this is its current status. 0:02:19.160 --> 0:02:22.320 But it started like about a decade ago, and before 0:02:22.400 --> 0:02:25.480 it's pivot into crypto, it was a sort of a 0:02:25.639 --> 0:02:29.960 dying mobile game developer out of a based in Hong Kong, 0:02:30.320 --> 0:02:33.440 and the company was making those casual mobile games. But 0:02:33.760 --> 0:02:38.840 back in uh the company made its first investment in 0:02:39.000 --> 0:02:42.919 Crypto Kiddies, which was the world's first like popular and 0:02:43.040 --> 0:02:46.160 f t collection. So that was its like entry point 0:02:46.200 --> 0:02:49.639 into crypto and ever since then it's been buying a 0:02:49.720 --> 0:02:54.360 lot of like promising startups and projects in the crypto space, 0:02:54.880 --> 0:02:57.840 and uh till this day, it's still doing so even 0:02:58.080 --> 0:03:00.160 now we're in the middle of a cryptal in the 0:03:00.760 --> 0:03:04.480 last year. Last summer, I think the company first reached 0:03:04.919 --> 0:03:09.960 the unicorn status by reaching one billion US starar valuation 0:03:10.160 --> 0:03:14.160 in a fundraising around led by Sequoia, and now the 0:03:14.280 --> 0:03:18.160 company is valued as six billion US stars. So it's 0:03:18.240 --> 0:03:22.040 just in the matter of twelve months. That's a lot. 0:03:23.000 --> 0:03:25.880 It's it's it's a lot. It's a very large valuation. 0:03:26.560 --> 0:03:29.480 It is a very short amount of time to achieve 0:03:29.680 --> 0:03:33.320 that valuation. How is this happening? Like, who is the 0:03:33.440 --> 0:03:39.000 person behind this? Right? So Yasu is the founder and 0:03:39.200 --> 0:03:44.000 the mastermind behind all the pivot into crypto. So Yassu 0:03:44.120 --> 0:03:47.760 it's not your typical tech bro like. He talks like 0:03:48.040 --> 0:03:52.760 softly and he is a father of three kids. Um 0:03:53.400 --> 0:03:57.040 and he always wear those sports where like the hoodie 0:03:57.120 --> 0:03:59.720 and as like athletic pens. It can be just some 0:04:00.000 --> 0:04:03.280 and that's jogging on a Hong Kong trail. That someone 0:04:03.360 --> 0:04:06.720 you can run into in a morning job. But apart 0:04:06.800 --> 0:04:10.800 from its her, he's like very soft like appearance in 0:04:10.840 --> 0:04:13.960 the way he speaks. He has strong message for the 0:04:14.080 --> 0:04:17.400 big tech that is he wants to use his company 0:04:17.520 --> 0:04:22.280 and it's all subsidiaries. The tokens. He hoped to sort 0:04:22.320 --> 0:04:26.680 of revolutionize the Internet of today because today's Internet it's 0:04:26.720 --> 0:04:29.520 pretty much controlled by a couple like big players like 0:04:29.720 --> 0:04:35.679 mad Amazon, Microsoft or Tensent. But with blockchain, yes do things. 0:04:36.160 --> 0:04:41.720 We can digitalize your ownership of your tokens and assets 0:04:41.880 --> 0:04:45.640 in a way that everyone will has to property ownership 0:04:46.320 --> 0:04:49.679 and their data is not controlled by a centralized company. 0:04:52.680 --> 0:04:57.719 Now there's an interesting tension that you're describing, right, which 0:04:57.839 --> 0:05:01.080 is that his you know, his whole thing is about 0:05:02.760 --> 0:05:07.560 decentralization and how blockchain will give users and customers like 0:05:07.720 --> 0:05:10.920 back the value that they currently provide to these big 0:05:11.080 --> 0:05:15.760 tech companies. But Anamoca is now so big and has 0:05:15.839 --> 0:05:20.040 invested in so many different types of companies, not just blockchain, 0:05:20.120 --> 0:05:23.640 not just gaming, that they are kind of becoming a 0:05:23.720 --> 0:05:26.640 sort of a centralized force in their own in their 0:05:26.640 --> 0:05:30.640 own right. Yeah, they're sort of a gamekeeper in the 0:05:30.720 --> 0:05:34.640 website space because they're so influential. And we talked to 0:05:34.760 --> 0:05:39.280 some startup funders or crypital entrepreneurs. They sort of feel like, hey, 0:05:39.400 --> 0:05:42.400 if we don't get the investment from Animal, does does 0:05:42.480 --> 0:05:45.320 that mean we're missing out? And at the same time, 0:05:45.640 --> 0:05:48.200 like yas it is trying to build the ecosystem, right, 0:05:48.279 --> 0:05:52.280 Like it's trying to plug its portfolio companies into a 0:05:52.360 --> 0:05:57.800 bigger internet blockchain system. For example, like one of its 0:05:57.839 --> 0:06:02.600 subsidiaries is making game aims for the board Ape collection, 0:06:02.760 --> 0:06:05.920 which is the one of the top empty collections. Things 0:06:06.000 --> 0:06:10.200 like that. That approach will make people ask if I'm 0:06:10.279 --> 0:06:14.960 not one of Animoca's investees, or if Animoka doesn't home 0:06:15.160 --> 0:06:18.960 token to my crypto project, will I'll still be part 0:06:19.040 --> 0:06:23.000 of the future that Yatu is envisioning. There's a big 0:06:23.120 --> 0:06:26.680 question mark around that. Well, there's another question mark about 0:06:27.000 --> 0:06:30.600 how sustainable is this future at all? Right, so they've 0:06:30.640 --> 0:06:35.159 got this extremely concentrated crypto exposure in addition to having 0:06:35.240 --> 0:06:38.160 like crypto on its own balance sheets in the middle 0:06:38.200 --> 0:06:41.320 of what's turning out to be a pretty protracted crypto winter, 0:06:41.680 --> 0:06:45.400 is Yatoo all worried about this? Right now? We're talking 0:06:45.480 --> 0:06:49.280 looking at like crypto games like Ax and they sort 0:06:49.320 --> 0:06:52.600 of pioneer the play to earn model, right, but it 0:06:52.680 --> 0:06:57.000 doesn't really work during the down cycle. So once the 0:06:57.080 --> 0:06:59.920 token price shop, if players are here for the money 0:07:00.200 --> 0:07:02.839 but not for the fun, they will actually leave the game. 0:07:03.160 --> 0:07:05.880 So we've seen that with cryptal kids, and we've seen 0:07:05.960 --> 0:07:09.520 that with XI and will constantly happen as long as 0:07:09.600 --> 0:07:12.440 like players are here for the for the money. Yes, 0:07:12.560 --> 0:07:16.000 to acknowledge that that problem actually for for his industry, 0:07:16.280 --> 0:07:20.200 and he's sort of arguing that he's spending more time 0:07:20.280 --> 0:07:23.520 to build a higher quality Triple A games, which may 0:07:23.640 --> 0:07:25.600 take a couple of years to come to the market. 0:07:26.080 --> 0:07:29.480 When we interview him, he showed us some demos trailers 0:07:29.600 --> 0:07:32.560 for a couple of blocking games. They're buildings. They look 0:07:32.640 --> 0:07:38.200 similar to some of the more popular or better produced 0:07:38.240 --> 0:07:41.280 games here in here in the in the traditional council market, 0:07:41.640 --> 0:07:45.240 like for nine or uh there's another space shooter game 0:07:45.480 --> 0:07:50.480 which looks actually pretty cool. If those, like more serious 0:07:50.560 --> 0:07:53.160 games turned out to be a big hit, then it 0:07:53.240 --> 0:07:57.880 will sort of part of the issue. Yes, he actually 0:07:58.040 --> 0:08:01.880 thinks it's a good time to deploy more capital because 0:08:02.360 --> 0:08:07.080 thunders studing money and Yasu has a big watch hast 0:08:07.320 --> 0:08:10.320 so well just the company and him will just go 0:08:10.440 --> 0:08:13.640 out and keep finding those bargaining investments. But I want 0:08:13.680 --> 0:08:15.160 to go back to something that you said about the 0:08:15.200 --> 0:08:19.840 potential for blockbuster games. It's not particularly controversial to point 0:08:19.880 --> 0:08:23.240 out that most blockchain games right now are just not 0:08:23.720 --> 0:08:29.280 fun and they are, as you just said, really environments 0:08:29.320 --> 0:08:32.120 in which people are there for the money as opposed 0:08:32.160 --> 0:08:36.680 to for the game, and the money is declining. Actually 0:08:36.679 --> 0:08:40.120 Infinity again being an example of this, the fund is 0:08:40.160 --> 0:08:43.599 not necessarily rising. What do we think is the patients 0:08:44.200 --> 0:08:47.760 of potential blockchain gamers if those like you know, Blockbuster 0:08:48.559 --> 0:08:52.079 Fortnite equivalence are two to three years away. M M. 0:08:52.200 --> 0:08:55.559 I think the issue will be like for companies like 0:08:55.840 --> 0:08:58.360 in mon Card and the making Websta games, they shouldn't 0:08:58.400 --> 0:09:01.640 be only targeting the crypto gamers or the cryptal traders. 0:09:02.080 --> 0:09:06.800 They should be targeting the way bigger like game or market. 0:09:07.240 --> 0:09:11.400 So if there's a day when Xbox player or a 0:09:11.520 --> 0:09:15.160 ps PS five player that will be drawn to a 0:09:15.280 --> 0:09:20.160 webstree game without noticing there's even a blockchain element to it, 0:09:20.840 --> 0:09:24.880 then that will be a big successful animoca. So I 0:09:24.960 --> 0:09:29.079 guess it's less about the patients for for cryptal enthusiasts 0:09:29.240 --> 0:09:32.719 because they have the basic knowledge of the tokens and 0:09:32.840 --> 0:09:35.199 that they will go through all the troubles of like 0:09:35.679 --> 0:09:38.560 creating a wallet and linking into the game. But if 0:09:38.800 --> 0:09:42.559 anamoca scame can can be naturally integrated to the blockchain 0:09:42.840 --> 0:09:47.360 technology without letting gamers know, then you can have a 0:09:47.600 --> 0:09:52.280 much bigger user adoption. I think that the challenge right 0:09:52.320 --> 0:09:55.840 now is you can get a much bigger user adoption. 0:09:55.920 --> 0:09:59.319 But like the time Horizon seems further away, is it 0:09:59.440 --> 0:10:02.200 that animal Okay is using other parts of its portfolio 0:10:02.320 --> 0:10:07.120 to kind of subsidize that potential couple of years between Okay, 0:10:07.160 --> 0:10:09.439 we are where we are with the existing blockchain games, 0:10:09.480 --> 0:10:12.040 but in you know, like our version of Fortnite is 0:10:12.080 --> 0:10:14.559 just around the corner, Like, how are they bridging this 0:10:14.679 --> 0:10:18.360 gap in the meantime. I think one of animals biggest 0:10:18.400 --> 0:10:22.680 cash causes called Sandbox. That's a blockchain based huge GC 0:10:22.880 --> 0:10:28.559 content platform similar to rob blocks or Minecraft. So what 0:10:28.720 --> 0:10:32.120 Sandbox is doing is it's been doing a lot of 0:10:32.440 --> 0:10:36.839 like those virtual lends sales. Two big brands like Nike 0:10:37.160 --> 0:10:39.160 or even some of the local banks in Hong Kong. 0:10:39.520 --> 0:10:42.839 They're spending huge money on just buying lands on a 0:10:43.320 --> 0:10:47.320 virtual space which has yet to have much happening. Because 0:10:47.600 --> 0:10:51.440 at the same time, game developers or even like indi 0:10:52.040 --> 0:10:56.080 like game music enthusiasts are they're using the in game 0:10:56.160 --> 0:11:00.240 tool to try to build those in game minigame on 0:11:00.360 --> 0:11:04.439 top of the sandbox platform. That's happening while they're doing 0:11:04.559 --> 0:11:07.880 the land sales, so as you can see, like they 0:11:07.920 --> 0:11:10.959 have a sort of quick and a medium way to 0:11:11.720 --> 0:11:16.360 make money. Meanwhile, they're letting their players in their ecosystem 0:11:16.440 --> 0:11:19.800 to try to provide more content to fill the gap. 0:11:20.960 --> 0:11:23.040 We'll be right back with more from Bloomberg Reports up 0:11:23.120 --> 0:11:37.680 in Huang. What are some of the non crypto parts 0:11:37.840 --> 0:11:41.720 of the Anamoka portfolio. Oh, yeah, they have some games 0:11:41.800 --> 0:11:45.640 from the web twobe error, like like some power Ranger games. 0:11:45.800 --> 0:11:50.040 So it's sort of the fighting and raising games that 0:11:50.200 --> 0:11:54.679 they have published during the mobile game boom back like 0:11:54.880 --> 0:11:57.480 ten years ago. But they're they're sort of just letting 0:11:57.559 --> 0:12:01.000 those games to dept their own life, meaning they're they're 0:12:01.040 --> 0:12:05.520 not putting extra resources into them. And at the same 0:12:05.600 --> 0:12:09.520 time that they're looking at their portfolio or i mean 0:12:09.600 --> 0:12:14.920 gaming portfolio and also profolio companies to see which are 0:12:15.000 --> 0:12:17.640 the ones we should pick out and let them make 0:12:17.960 --> 0:12:21.240 like blockchain game or turning like existing mobile games into 0:12:21.280 --> 0:12:25.000 block chinking by adding a layer of the token economics. 0:12:26.080 --> 0:12:28.880 Anamoka is clearly particularly as it relates to you know, 0:12:29.000 --> 0:12:32.240 other investors and funders in the region, one of the 0:12:32.320 --> 0:12:35.160 biggest out there. And when it comes to you know, 0:12:35.720 --> 0:12:39.200 folks who if you if you don't live in China 0:12:39.440 --> 0:12:41.360 or Japan or Singapore, and you might be less familiar 0:12:41.400 --> 0:12:44.280 with them. They've been compared to like an Andrews and 0:12:44.360 --> 0:12:47.960 Horowitz or an A sixteen C. Do you see them 0:12:48.280 --> 0:12:53.079 as potentially getting kind of a similar reputation outside of 0:12:53.160 --> 0:12:56.439 Asia where it's like folks who are based in New 0:12:56.520 --> 0:13:00.480 York in or in Silicon Valley are looking to Anamoca 0:13:00.559 --> 0:13:02.559 as a potential funder in the way that they look 0:13:02.600 --> 0:13:04.880 to some of these you know, big US based venture 0:13:04.920 --> 0:13:09.120 capital firms. Now, yeah, I think that's happening because right 0:13:09.160 --> 0:13:11.719 now I'm traveling in the States and just spend a 0:13:11.840 --> 0:13:14.920 couple of days in the Bay Area. So the Webstree founders, 0:13:15.640 --> 0:13:19.160 at least the ones I met was they recognize and 0:13:19.320 --> 0:13:22.559 Marca is a big player and people are flying to 0:13:22.720 --> 0:13:25.679 Singapore to Hong Kong to meet them because they're big, 0:13:25.800 --> 0:13:28.920 Like there's a crypto event happening in Singapore, and the 0:13:29.000 --> 0:13:32.760 founders want to get any more money even if they're 0:13:32.800 --> 0:13:35.760 based in the States. And as a matter of fact, 0:13:36.040 --> 0:13:40.800 and Marka did acquire a like local game studio called 0:13:41.000 --> 0:13:44.000 nWay here in San Francisco a couple of years ago. 0:13:44.120 --> 0:13:47.840 So yeah, actually it's making in rows into not only 0:13:48.040 --> 0:13:52.320 Asia but also the bigger Western market. I think one 0:13:52.800 --> 0:13:56.439 key difference between Marca and a VC from like a 0:13:56.559 --> 0:13:59.839 six thc Is and Morca is actually, yes, it's a 0:14:00.080 --> 0:14:04.280 game assment house, but it's also trying to do something 0:14:04.840 --> 0:14:08.920 like a house. It's an operations company which grounds so 0:14:09.080 --> 0:14:12.360 many games studios, right, But that may go back to 0:14:12.480 --> 0:14:16.319 our earlier point that it still wants to would the 0:14:16.760 --> 0:14:20.680 world of gamers with its own creation of the next 0:14:20.960 --> 0:14:24.400 block pasture titles which happened to have a blockchain animent 0:14:24.480 --> 0:14:27.200 to it. Right. So a kind of a comparison would 0:14:27.200 --> 0:14:31.440 be like if Facebook slash matter we're one of the 0:14:31.480 --> 0:14:34.240 biggest investors in other social media companies while also being 0:14:34.440 --> 0:14:39.000 Facebook slash matter, Yeah, exactly, and actually in Asia that's 0:14:39.200 --> 0:14:45.840 tencent right in the in the process of your reporting, 0:14:46.120 --> 0:14:48.200 you know, you, because you've you've been reporting on for 0:14:48.200 --> 0:14:50.520 a very long time, you have managed to kind of 0:14:50.600 --> 0:14:54.840 convey the appropriately crypto levels of what seems to be 0:14:54.960 --> 0:14:59.080 boundless enthusiasm and confidence that yet to an other folks 0:14:59.120 --> 0:15:03.080 associated with anim have in terms of the future, But 0:15:03.520 --> 0:15:06.320 what are their big plans, Like what's what's the five, ten, 0:15:06.480 --> 0:15:11.200 fifteen year horizon. Mm hmm, that's a good question. I 0:15:11.560 --> 0:15:13.360 wish I asked you asked you like, what's your five 0:15:13.440 --> 0:15:16.760 year plan? Just like the Chinese government love five year 0:15:16.800 --> 0:15:20.760 economic plan. But he was sort of saying like he 0:15:20.920 --> 0:15:24.240 wished to take the company public in the next two 0:15:24.360 --> 0:15:28.200 or three years, but depends on the market situation, because 0:15:28.760 --> 0:15:31.720 I feel he's grown to a stage that he needs 0:15:31.760 --> 0:15:35.720 to let investors away out because people have been backing 0:15:35.840 --> 0:15:39.720 him since like twenty eighteen and the you know VC 0:15:40.120 --> 0:15:44.160 or p from they need to cash out. The easiest 0:15:44.200 --> 0:15:46.640 way will be through an I p O. But that 0:15:46.800 --> 0:15:49.680 that's his like plans in the financial markets. But back 0:15:49.760 --> 0:15:53.440 on the operation side of things, I think it's just 0:15:53.640 --> 0:16:00.880 like keep acquiring up and calming blockchain startups or acquiring 0:16:01.240 --> 0:16:06.240 that some internet startups that's already big in their own 0:16:06.400 --> 0:16:11.120 niche and then through the acquisition and morca give them 0:16:11.320 --> 0:16:15.920 a new play in blockchain. So a case of that 0:16:16.040 --> 0:16:20.040 will be it's acquisition of an education company called tiny Tap, 0:16:20.480 --> 0:16:24.600 which connects online tutors with with like school kids. So 0:16:24.760 --> 0:16:27.800 there are content platform but now they're moving their content 0:16:27.880 --> 0:16:31.600 to blockchain, so yeah, and Moca will just keep buying. 0:16:31.800 --> 0:16:35.080 It's sort of also like the VC play like it's 0:16:35.120 --> 0:16:39.120 a number of game right. Sometimes you fail sometimes the startups. 0:16:39.400 --> 0:16:43.000 The startups will grow big, but you only need to 0:16:43.080 --> 0:16:48.160 have a couple of wings to be successful. Well Time Hotel, 0:16:48.840 --> 0:16:50.680 thank you so much for joining us. Really appreciate you 0:16:50.720 --> 0:16:55.880 being on the show. Thanks Stacy. You can find more 0:16:55.880 --> 0:16:58.400 of his reporting on the Bloomberg terminal, on Bloomberg dot 0:16:58.440 --> 0:17:02.280 com or on Twitter. He's at ping Roma. That's p 0:17:02.520 --> 0:17:10.360 I N G R O m A. On the next 0:17:10.400 --> 0:17:13.000 episode of Bloomberg Crypto, we'll catch you up on what's 0:17:13.040 --> 0:17:15.679 been you guessed it yet another busy week in crypto. 0:17:16.119 --> 0:17:19.760 We'll talk regulation, markets and why there are almost no 0:17:19.880 --> 0:17:25.600 crypto CEOs left. This is Bloomberg Crypto, a daily podcast 0:17:25.680 --> 0:17:28.760 from Bloomberg and I Heart Radio. For more shows from 0:17:28.800 --> 0:17:32.159 I Heart Radio, visit the iHeart Radio app, Apple Podcasts, 0:17:32.359 --> 0:17:36.280 or wherever you get your podcasts. Send us your comments, questions, 0:17:36.359 --> 0:17:39.160 or suggestions for the show to Crypto at Bloomberg dot 0:17:39.240 --> 0:17:44.119 net or find us on Twitter. We're at Crypto. The 0:17:44.200 --> 0:17:48.119 supervising producer of Bloomberg Crypto is Vicky Vergelina. Our senior 0:17:48.160 --> 0:17:51.600 producer is Janet Babin. Our producers are Mohammed Baruke and 0:17:51.640 --> 0:17:56.120 Sharon Barriro Deafto wonder At is our engineer. Original music 0:17:56.320 --> 0:18:00.359 by Leo Sidran. I'm Stacy Marie Shmal. We'll be back tomorrow.