1 00:00:05,440 --> 00:00:12,760 Speaker 1: Welcome to Trallians. I'm Joel Webber and I'm Eric bel Tunis. Eric. 2 00:00:13,000 --> 00:00:15,560 Speaker 1: There was an announcement recently by kind of a big 3 00:00:15,560 --> 00:00:20,720 Speaker 1: company formerly known as Facebook, now known as Meta Platforms, 4 00:00:21,400 --> 00:00:25,600 Speaker 1: and I'm curious what your your take was on all 5 00:00:25,600 --> 00:00:28,920 Speaker 1: of that, because what I saw was a company rebranding 6 00:00:28,920 --> 00:00:32,120 Speaker 1: itself and the market just kind of went nuts for 7 00:00:32,120 --> 00:00:35,040 Speaker 1: this idea of the metaverse. Yeah, you know, I'd heard 8 00:00:35,040 --> 00:00:36,640 Speaker 1: of the metaverse. I mean, this is not a term 9 00:00:36,640 --> 00:00:40,200 Speaker 1: I was unfamiliar with, and when I saw the announcement, 10 00:00:40,240 --> 00:00:42,720 Speaker 1: I kind of thought, well, Facebook has really been that 11 00:00:42,840 --> 00:00:44,440 Speaker 1: name has kind of been through the mud, and maybe 12 00:00:44,440 --> 00:00:47,279 Speaker 1: they were just trying to like make an easy like 13 00:00:47,400 --> 00:00:51,560 Speaker 1: news start. But when they did that, what happened that 14 00:00:51,720 --> 00:00:53,800 Speaker 1: really caught my attention as an E t F analyst 15 00:00:53,920 --> 00:00:56,560 Speaker 1: is the e t F with the ticker meta, which 16 00:00:56,600 --> 00:00:59,480 Speaker 1: I assume Facebook probably wanted but couldn't get because it 17 00:00:59,520 --> 00:01:03,080 Speaker 1: was taken the round hill ball metaverse. Et f UM 18 00:01:03,120 --> 00:01:06,119 Speaker 1: started to see flows very quickly like and I thought, well, 19 00:01:06,160 --> 00:01:09,080 Speaker 1: maybe people are like accidentally buying it, But over the 20 00:01:09,120 --> 00:01:12,240 Speaker 1: past sixteen seventeen days, it just takes in more and 21 00:01:12,319 --> 00:01:17,000 Speaker 1: more money. It's very reminiscent of Hack after the Sony 22 00:01:17,080 --> 00:01:20,840 Speaker 1: Pictures Hack, where this news event becomes a catalyst moment 23 00:01:20,880 --> 00:01:24,440 Speaker 1: for a theme. It's the perfect situation and Meadow was 24 00:01:24,560 --> 00:01:27,240 Speaker 1: right there waiting. And I'll give you some numbers. It's 25 00:01:27,280 --> 00:01:31,559 Speaker 1: now grown by sixfold since you know the Zuck moment, 26 00:01:32,120 --> 00:01:35,440 Speaker 1: and it's also seen volume grow by fifty times. The 27 00:01:35,480 --> 00:01:39,080 Speaker 1: options activity has grown by forty five times. The ETF 28 00:01:39,120 --> 00:01:42,920 Speaker 1: is becoming. It's just it's basically done what you want 29 00:01:42,959 --> 00:01:45,720 Speaker 1: to see in two years in about three weeks, which 30 00:01:45,800 --> 00:01:50,120 Speaker 1: is impressive. So joining us on this episode of Joinings, 31 00:01:50,160 --> 00:01:54,720 Speaker 1: We've got Matthew Ball, the guy behind the et F 32 00:01:54,920 --> 00:01:58,440 Speaker 1: meta Also joining us Matt Canterman, an e t F 33 00:01:58,480 --> 00:02:01,400 Speaker 1: analyst with Bloomberg Intelligence, where he's also the co host 34 00:02:01,440 --> 00:02:05,400 Speaker 1: of a podcast called Into the Metaverse, along with another 35 00:02:05,440 --> 00:02:12,760 Speaker 1: Bloomberg Intelligence guest, Rebecca Sin, this time on Trilliance Exploring 36 00:02:12,800 --> 00:02:20,080 Speaker 1: the Metaverse. Mr Cantorman, Mr Ball, Rebecca Sin, Welcome to Trilliance, 37 00:02:20,919 --> 00:02:23,400 Speaker 1: nice to be here, Thanks for having us. Okay, So, 38 00:02:24,240 --> 00:02:27,000 Speaker 1: Matthew Ball, I want to start with you. Last time 39 00:02:27,480 --> 00:02:30,160 Speaker 1: you and I connected a couple of years ago, you 40 00:02:30,240 --> 00:02:32,800 Speaker 1: wrote like an article for Bloomberg Business week and then 41 00:02:32,800 --> 00:02:34,440 Speaker 1: all of a sudden, like you're back with an E 42 00:02:34,560 --> 00:02:37,440 Speaker 1: T F. What's been going on? Man? Quite a bit? 43 00:02:37,480 --> 00:02:39,600 Speaker 1: I mean, funnily enough, the article that I wrote for 44 00:02:39,639 --> 00:02:44,119 Speaker 1: Bloomberg was on the ongoing and soon to be precipitous 45 00:02:44,120 --> 00:02:47,080 Speaker 1: decline of Hollywood in the box office. This is like 46 00:02:47,160 --> 00:02:50,600 Speaker 1: before times, it was like nineteen pre pandemic was certainly 47 00:02:50,600 --> 00:02:52,480 Speaker 1: pretty pandemic. But it's a good way to look at 48 00:02:52,520 --> 00:02:55,920 Speaker 1: the metaverse, which is through my career I've jumped a 49 00:02:55,960 --> 00:02:58,520 Speaker 1: few different times. At one point I was a wild 50 00:02:58,600 --> 00:03:01,080 Speaker 1: firefighter in initial at act, if you can believe it. 51 00:03:01,919 --> 00:03:05,120 Speaker 1: But I've spent most of the past fifteen years jumping 52 00:03:05,200 --> 00:03:07,600 Speaker 1: from what I saw to be the new thing. At 53 00:03:07,639 --> 00:03:10,840 Speaker 1: one point, that was the digital apps economy. Shortly thereafter 54 00:03:10,919 --> 00:03:14,560 Speaker 1: it was digital communities. I then moved into s VAUD 55 00:03:14,600 --> 00:03:18,040 Speaker 1: a few years before the streaming wars began, and then 56 00:03:18,040 --> 00:03:21,200 Speaker 1: over the past five years, I shifted over to video gaming, 57 00:03:21,320 --> 00:03:24,639 Speaker 1: and that very cleanly brought me to the metaverse, albeit 58 00:03:24,680 --> 00:03:26,160 Speaker 1: at a time in which I still thought it was 59 00:03:26,200 --> 00:03:30,000 Speaker 1: fifteen years away from fruition and at least five years 60 00:03:30,000 --> 00:03:34,000 Speaker 1: from the public consciousness. And so what came first this 61 00:03:34,160 --> 00:03:37,560 Speaker 1: e t F or or the idea of of just 62 00:03:37,840 --> 00:03:41,040 Speaker 1: you know, putting a finger into what what this space 63 00:03:41,080 --> 00:03:43,480 Speaker 1: could look like. So I've been writing about the metaverse 64 00:03:43,480 --> 00:03:49,360 Speaker 1: since mid but it was mid twenty in which this 65 00:03:49,440 --> 00:03:54,440 Speaker 1: is a macro super theme started to become an idea 66 00:03:55,200 --> 00:03:57,880 Speaker 1: that investors would start to look at this. And then 67 00:03:58,240 --> 00:04:00,280 Speaker 1: in the intwoing months in the back half of the year, 68 00:04:00,880 --> 00:04:03,640 Speaker 1: we had roadblocks. File there s one. It was the 69 00:04:03,680 --> 00:04:06,640 Speaker 1: first time in which we had the metaverse really driving 70 00:04:07,280 --> 00:04:10,320 Speaker 1: a story to the street. We also had the I 71 00:04:10,440 --> 00:04:14,120 Speaker 1: p O of unity. Those two combined were some of 72 00:04:14,120 --> 00:04:16,520 Speaker 1: the biggest ideas the gaming industry had ever seen. They 73 00:04:16,600 --> 00:04:18,880 Speaker 1: very quickly became some of the biggest companies in the 74 00:04:18,920 --> 00:04:22,400 Speaker 1: gaming industry, and that gave us a lot more confirmation 75 00:04:22,520 --> 00:04:24,520 Speaker 1: that now was actually the right time for an e 76 00:04:24,640 --> 00:04:28,480 Speaker 1: t F. And so we began in late the second 77 00:04:28,560 --> 00:04:32,320 Speaker 1: quarter of devising the methodology behind the index. In the 78 00:04:32,320 --> 00:04:35,840 Speaker 1: third quarter, we began doing initial conversations with various et 79 00:04:35,960 --> 00:04:40,039 Speaker 1: F providers. Secured that in the first quarter of one. 80 00:04:40,480 --> 00:04:43,719 Speaker 1: But to be honest, even midway in the second quarter, 81 00:04:44,560 --> 00:04:46,799 Speaker 1: we were concerned that we were too early. We didn't 82 00:04:46,800 --> 00:04:49,520 Speaker 1: think we couldn't have a viable e t F. But 83 00:04:49,600 --> 00:04:51,760 Speaker 1: we thought that it was largely going to spend a 84 00:04:51,839 --> 00:04:55,719 Speaker 1: year or two proving itself from a returns perspective, but 85 00:04:55,880 --> 00:05:00,400 Speaker 1: struggling to actually penetrate the average investor, certainly institu Oceans, 86 00:05:00,440 --> 00:05:04,599 Speaker 1: but even many retail investors. Um And just before we 87 00:05:04,640 --> 00:05:07,600 Speaker 1: go to meta here, for those of us who are 88 00:05:07,600 --> 00:05:11,880 Speaker 1: the uninitiated, how do you even attempt to explain what 89 00:05:11,920 --> 00:05:15,680 Speaker 1: the metaverse is when you know we're very early innings 90 00:05:15,720 --> 00:05:19,360 Speaker 1: in what may transpire. It's a good question, and obviously 91 00:05:19,440 --> 00:05:23,159 Speaker 1: I'm asked quite frequently. The honest answer is I tailor 92 00:05:23,240 --> 00:05:26,800 Speaker 1: it to the audience, and that's based on the varying 93 00:05:26,839 --> 00:05:30,360 Speaker 1: degrees in which they're familiar with the Internet. It's antecedents 94 00:05:30,400 --> 00:05:33,040 Speaker 1: and so forth. But I think the most fun way 95 00:05:33,120 --> 00:05:35,360 Speaker 1: I have to describe it is a riff on Daniel X, 96 00:05:35,440 --> 00:05:38,320 Speaker 1: the founder and CEO of Spotify. He talks about the 97 00:05:38,320 --> 00:05:41,400 Speaker 1: first fifty eight or twenty years of the consumer Internet 98 00:05:41,800 --> 00:05:46,280 Speaker 1: as being this relentless quest to break down anything made 99 00:05:46,279 --> 00:05:50,200 Speaker 1: of atoms and converted into bits. Think of your alarm clock. 100 00:05:50,279 --> 00:05:53,040 Speaker 1: We all used to go to bed with an alarm 101 00:05:53,120 --> 00:05:57,239 Speaker 1: clock on our nightstand made of atoms. And then today 102 00:05:57,360 --> 00:05:59,840 Speaker 1: we actually go to bed with an alarm clock on 103 00:06:00,160 --> 00:06:03,440 Speaker 1: our iPhone on our nightstand. We converted an alarm clock 104 00:06:03,520 --> 00:06:06,600 Speaker 1: from something made of atoms into something made of bits software. 105 00:06:07,360 --> 00:06:10,400 Speaker 1: This next stage, the metaverse, you can think of as 106 00:06:10,480 --> 00:06:14,920 Speaker 1: reconstituting that alarm clock using bits, but into virtual atoms. 107 00:06:15,640 --> 00:06:19,080 Speaker 1: There's a broad belief that that is a more intuitive 108 00:06:19,120 --> 00:06:21,680 Speaker 1: model of interaction. You can take a look at forty 109 00:06:21,760 --> 00:06:24,880 Speaker 1: years of the Internet's history and see is constantly shifting 110 00:06:25,240 --> 00:06:30,479 Speaker 1: towards more tactile, more immersive, more visual experiences in much 111 00:06:30,520 --> 00:06:33,160 Speaker 1: the same way we started on the Internet, representing ourselves 112 00:06:33,160 --> 00:06:37,080 Speaker 1: with the user name and email address, sharing via text messages, 113 00:06:37,240 --> 00:06:42,200 Speaker 1: message boards, slowly shifting too limited web pages, then profiles 114 00:06:42,240 --> 00:06:46,920 Speaker 1: full of photos, video streams, Instagram stories. This next step 115 00:06:47,040 --> 00:06:51,479 Speaker 1: is shifting online existence commerce into virtual three D objects. 116 00:06:52,080 --> 00:06:54,599 Speaker 1: And I just follow up on that because there's a 117 00:06:54,640 --> 00:06:57,520 Speaker 1: really important point that Matt has made um and you 118 00:06:57,520 --> 00:07:00,400 Speaker 1: can check out We've talked about this extensively on our podcast. 119 00:07:00,400 --> 00:07:03,520 Speaker 1: Into the metaverse. But the metaverse is not a device. 120 00:07:04,000 --> 00:07:06,839 Speaker 1: You know, it's not defined by any individual access point, 121 00:07:06,880 --> 00:07:09,000 Speaker 1: and there's a lot of misconception that the metaverse is 122 00:07:09,040 --> 00:07:11,480 Speaker 1: a VR headset or it's an a R goggles, and 123 00:07:11,520 --> 00:07:13,920 Speaker 1: that's not the case. The metaverse is device agnostic. The 124 00:07:13,920 --> 00:07:16,760 Speaker 1: metaverse is the Internet. That's what Matt was saying. It's 125 00:07:16,840 --> 00:07:19,520 Speaker 1: enabling the Internet with real time three D software. Unity 126 00:07:19,600 --> 00:07:21,960 Speaker 1: likes to put out a stat that today two percent 127 00:07:22,000 --> 00:07:23,880 Speaker 1: of the Internet is enabled by real time three D. 128 00:07:24,280 --> 00:07:26,800 Speaker 1: And whether you think the CEO is is full of 129 00:07:26,800 --> 00:07:28,640 Speaker 1: it or not, there's a trend in the direction. He 130 00:07:28,680 --> 00:07:30,760 Speaker 1: thinks that ten years, fifty percent of the Internet will 131 00:07:30,760 --> 00:07:32,920 Speaker 1: be enabled by real time three D. So you're talking 132 00:07:32,960 --> 00:07:35,680 Speaker 1: about making the Internet exactly as Matt was saying, much 133 00:07:35,720 --> 00:07:38,720 Speaker 1: more immersive and much more three D enabled. And and 134 00:07:38,760 --> 00:07:41,240 Speaker 1: that's really the metaverse again, it's not a device. It's 135 00:07:41,280 --> 00:07:44,480 Speaker 1: a really important point to make. And so, um, you know, 136 00:07:44,560 --> 00:07:46,600 Speaker 1: as somebody who has a ten year old kid, he 137 00:07:46,640 --> 00:07:49,480 Speaker 1: plays Roadblocks, I've seen it. He loves it. He plays 138 00:07:49,480 --> 00:07:53,160 Speaker 1: with his friends. That's the metaverse, right, Matt Kenterman. Absolutely 139 00:07:53,240 --> 00:07:55,880 Speaker 1: Roadblocks is like the only pure play in the metaverse 140 00:07:55,960 --> 00:08:00,240 Speaker 1: right now. It is a virtual, social, shared persistent experience platform. 141 00:08:00,280 --> 00:08:02,920 Speaker 1: That that is the definition of a metaverse platform. Now, 142 00:08:03,200 --> 00:08:04,960 Speaker 1: there are ways that they can make it more immersive. 143 00:08:05,120 --> 00:08:07,440 Speaker 1: There are ways that they can enhance that experience. There 144 00:08:07,480 --> 00:08:09,840 Speaker 1: are ways they can do more from the business side 145 00:08:09,840 --> 00:08:13,360 Speaker 1: on the monetization. But Roadblox is you know, Roadblocks Fortnite 146 00:08:13,680 --> 00:08:16,400 Speaker 1: with ten cents done with honor of King's um. You know, 147 00:08:16,440 --> 00:08:19,040 Speaker 1: these are some of the leading metaverse platforms out there today, 148 00:08:19,040 --> 00:08:23,600 Speaker 1: even Minecraft within Microsoft, and so absolutely the metaverse exists today. 149 00:08:23,640 --> 00:08:25,880 Speaker 1: But you know, we just interviewed Craig Donado, the chief 150 00:08:25,920 --> 00:08:28,720 Speaker 1: business officer, on our podcast, and we're still in the 151 00:08:28,760 --> 00:08:31,320 Speaker 1: first inning. You know, if you put this in baseball terms, 152 00:08:31,360 --> 00:08:33,000 Speaker 1: we're not even close to getting out of the bottom 153 00:08:33,000 --> 00:08:36,000 Speaker 1: of the first yet. And so let's put this into 154 00:08:36,000 --> 00:08:38,240 Speaker 1: dollars and cents. Your job is analyst of Bloomberg Intelligence, 155 00:08:38,320 --> 00:08:41,040 Speaker 1: is to try to find out the opportunity for investors 156 00:08:41,080 --> 00:08:44,240 Speaker 1: who use bloomber terminals. So in one of my recent notes, 157 00:08:44,360 --> 00:08:46,760 Speaker 1: I actually you know, associated one of your bits which 158 00:08:46,760 --> 00:08:49,720 Speaker 1: talked about how the metaverse would be have a revenue 159 00:08:49,720 --> 00:08:54,200 Speaker 1: of eight four estimated by you, um, how do people 160 00:08:54,200 --> 00:08:56,480 Speaker 1: make money in the metaverse? Explain that? So, you know, 161 00:08:56,559 --> 00:08:59,720 Speaker 1: our our forecast for the metaverse reaching eight billion by 162 00:08:59,760 --> 00:09:02,160 Speaker 1: twenty twenty four is really driven by the consumer facing 163 00:09:02,160 --> 00:09:04,559 Speaker 1: client applications. You know, I thought Matt and his team 164 00:09:04,559 --> 00:09:06,559 Speaker 1: with Roundhill when they were marketing three TF did a 165 00:09:06,600 --> 00:09:09,040 Speaker 1: good job of explaining that, and from that perspective, it's 166 00:09:09,040 --> 00:09:11,840 Speaker 1: actually quite a conservative forecast. So we looked at, you know, 167 00:09:11,920 --> 00:09:14,720 Speaker 1: four key areas. You know, from one hand, the metaverse 168 00:09:14,800 --> 00:09:17,160 Speaker 1: is clearly growing out of online games. It's clearly the 169 00:09:17,200 --> 00:09:20,800 Speaker 1: evolution of games into these shared social experience platforms. And 170 00:09:20,840 --> 00:09:23,120 Speaker 1: so we looked at the online games market, which includes 171 00:09:23,160 --> 00:09:26,760 Speaker 1: the software revenue, the services revenue, the advertising revenue. It 172 00:09:26,760 --> 00:09:29,280 Speaker 1: also includes engine, the game engine, the real time three 173 00:09:29,320 --> 00:09:32,400 Speaker 1: D software, which is so important. We looked at um, 174 00:09:32,440 --> 00:09:35,600 Speaker 1: you know, social media advertising. You know, the metaverse platforms 175 00:09:35,640 --> 00:09:38,040 Speaker 1: are going to be the next social platforms. They're going 176 00:09:38,080 --> 00:09:41,040 Speaker 1: to eat into the advertising revenue of these big social platforms, 177 00:09:41,040 --> 00:09:43,160 Speaker 1: so we took a big chunk of that. We looked 178 00:09:43,160 --> 00:09:46,160 Speaker 1: at live entertainment, which I think is a really burgeoning opportunity, 179 00:09:46,280 --> 00:09:49,360 Speaker 1: like such as virtual concerts, which alone is targeting a 180 00:09:49,360 --> 00:09:52,440 Speaker 1: thirty billion opportunity just within the concerts. So that adds in, 181 00:09:52,760 --> 00:09:54,800 Speaker 1: and then it's also the hardware that really used to 182 00:09:54,840 --> 00:09:57,920 Speaker 1: access it. Although it's not any specific piece of hardware. 183 00:09:57,960 --> 00:09:59,880 Speaker 1: The hardware clearly plays a piece, and that adds up 184 00:09:59,880 --> 00:10:02,000 Speaker 1: to eight hundred billion. But there's so much that we 185 00:10:02,040 --> 00:10:04,439 Speaker 1: haven't scratched the surface on. We didn't touch enterprise, we 186 00:10:04,480 --> 00:10:08,080 Speaker 1: didn't touch education, because these are more long term opportunities 187 00:10:08,120 --> 00:10:10,920 Speaker 1: where the monetization potential is still questionable in terms of 188 00:10:10,960 --> 00:10:14,240 Speaker 1: direct revenue. And then there's also you know, secondary items 189 00:10:14,240 --> 00:10:16,559 Speaker 1: such as you know, the cloud services that back all 190 00:10:16,600 --> 00:10:18,560 Speaker 1: this up, the telecom services that back all this up, 191 00:10:18,559 --> 00:10:22,079 Speaker 1: all the infrastructure that goes into building the actual networks 192 00:10:22,120 --> 00:10:24,960 Speaker 1: that power the metaverse. That's all behind the scenes. That 193 00:10:25,040 --> 00:10:27,200 Speaker 1: doesn't even touch So when when Tim Sweeney comes out 194 00:10:27,240 --> 00:10:29,720 Speaker 1: and says the metaverse is already a trillion dollar opportunity, 195 00:10:30,040 --> 00:10:32,040 Speaker 1: it absolutely is when you start including all of those 196 00:10:32,040 --> 00:10:35,959 Speaker 1: secondary tertiary markets. And Rebecca, let me bring you into 197 00:10:35,960 --> 00:10:38,440 Speaker 1: this um as a new member of our team, and 198 00:10:38,559 --> 00:10:41,439 Speaker 1: I advised you to be bold and say interesting things 199 00:10:41,559 --> 00:10:44,319 Speaker 1: in your notes. I think your fifth note said that 200 00:10:44,400 --> 00:10:47,800 Speaker 1: metaverse CTFs could have eighty billion dollars in the next 201 00:10:47,800 --> 00:10:51,240 Speaker 1: ten years. That is bold. I mean, honestly, I would 202 00:10:51,280 --> 00:10:53,160 Speaker 1: say maybe eight to ten. But you went for the 203 00:10:53,760 --> 00:10:56,080 Speaker 1: home run there. I guess with inflation, you definitely could 204 00:10:56,240 --> 00:10:58,800 Speaker 1: get a little help there, But what's your logic to that. 205 00:10:58,920 --> 00:11:00,880 Speaker 1: I'm I'm wondering if you just were hanging out with 206 00:11:00,920 --> 00:11:04,440 Speaker 1: Matt cantervittle too much. So I remember when that note 207 00:11:04,520 --> 00:11:06,600 Speaker 1: first came out and you laughed at me, you said, 208 00:11:06,640 --> 00:11:10,440 Speaker 1: record are you crazy? And in hindsight, this was before 209 00:11:10,640 --> 00:11:14,760 Speaker 1: Facebook had rebranded to Meta and before Korea launched their 210 00:11:14,760 --> 00:11:18,600 Speaker 1: e t S, and I really genuinely thought that the 211 00:11:18,640 --> 00:11:22,040 Speaker 1: market could be this large. And so I had predicted 212 00:11:22,040 --> 00:11:26,080 Speaker 1: that the e t F meta space would become eighty 213 00:11:26,160 --> 00:11:30,320 Speaker 1: billion and that could potentially be six hundred million in revenues. 214 00:11:30,760 --> 00:11:34,440 Speaker 1: And in November, after Korea launched for new e t F, 215 00:11:34,520 --> 00:11:37,800 Speaker 1: so on October twelve, Korea launched for new Metaverse et 216 00:11:37,920 --> 00:11:39,800 Speaker 1: F S and it was one of the fastest growing 217 00:11:39,800 --> 00:11:42,199 Speaker 1: ETFs to have gained a hundred million. So to give 218 00:11:42,240 --> 00:11:45,000 Speaker 1: you some context, in Korea, two of their et f 219 00:11:45,040 --> 00:11:48,080 Speaker 1: Samsung and Miray, reached a hundred million in assets in 220 00:11:48,200 --> 00:11:50,440 Speaker 1: just under two weeks, so it was round six days. 221 00:11:50,800 --> 00:11:53,959 Speaker 1: And so this is a record number of inflows. And 222 00:11:54,120 --> 00:11:57,040 Speaker 1: in early November, I had published that the metaworse space 223 00:11:57,080 --> 00:12:00,360 Speaker 1: would reach two billion, and this was achieved Act week 224 00:12:00,440 --> 00:12:03,640 Speaker 1: earlier this week, and looking at Meta, you know, Meta 225 00:12:03,679 --> 00:12:06,400 Speaker 1: has seen inflows of seven hundred million. But even in 226 00:12:06,440 --> 00:12:08,760 Speaker 1: the Korea space alone, between the four et f s, 227 00:12:09,040 --> 00:12:12,319 Speaker 1: they've already surpassed six hundred and fifty million in assets 228 00:12:12,360 --> 00:12:14,960 Speaker 1: and they only just launched less than one month ago. 229 00:12:15,120 --> 00:12:16,880 Speaker 1: And so I really believe that this space has a 230 00:12:16,920 --> 00:12:19,800 Speaker 1: lot of potential. In Asia alone, we have other regions 231 00:12:19,840 --> 00:12:22,920 Speaker 1: like Australia, Taiwan, Hong Kong, Singapore that are all looking 232 00:12:22,960 --> 00:12:25,880 Speaker 1: to launch metaverse et s, and so the appetite in 233 00:12:25,880 --> 00:12:28,360 Speaker 1: Asia is huge, and so I can see that this 234 00:12:28,400 --> 00:12:31,600 Speaker 1: market could really reach eighty billion. Yeah, and I think 235 00:12:31,840 --> 00:12:35,360 Speaker 1: eric it it's important to talk a little bit about 236 00:12:35,880 --> 00:12:38,880 Speaker 1: where the long term can go here, and I think 237 00:12:38,880 --> 00:12:42,520 Speaker 1: that there are a few different perspectives. First is Matt's 238 00:12:42,559 --> 00:12:45,680 Speaker 1: where he talks about how much of the potential metaverse 239 00:12:45,720 --> 00:12:49,720 Speaker 1: economy sits outside of the consumer facing applications. Well, the 240 00:12:49,840 --> 00:12:54,319 Speaker 1: UN estimates that the global economy eighty seven trillion dollars 241 00:12:54,440 --> 00:12:58,680 Speaker 1: is roughly eighteen percent digital. Now, of course, the Gaffam 242 00:12:59,040 --> 00:13:02,920 Speaker 1: or big tech five companies Google, Amazon, Facebook, Apple, and 243 00:13:02,960 --> 00:13:06,959 Speaker 1: Microsoft are about one point three trillion of that. The 244 00:13:07,000 --> 00:13:09,920 Speaker 1: truth is that the vast majority of the digital economy 245 00:13:09,960 --> 00:13:13,040 Speaker 1: sits outside of those big five companies, And in fact, 246 00:13:13,080 --> 00:13:16,360 Speaker 1: we know that outside of that eighteen of the global 247 00:13:16,400 --> 00:13:19,439 Speaker 1: economy that's digital, much of it is still powered by 248 00:13:19,480 --> 00:13:24,200 Speaker 1: digital technology. Over time, we have seen the percentage of 249 00:13:24,200 --> 00:13:28,240 Speaker 1: the global economy that is digital go up. My expectation 250 00:13:28,400 --> 00:13:30,880 Speaker 1: is that that will continue to go up, in part 251 00:13:30,960 --> 00:13:34,440 Speaker 1: powered by the metaverse, as the metaverse also gains share 252 00:13:34,559 --> 00:13:39,120 Speaker 1: of that digital portion. Jensen Wang, the Nvidio CEO, has 253 00:13:39,120 --> 00:13:42,000 Speaker 1: said that he expects the economy of the metaverse to 254 00:13:42,120 --> 00:13:45,400 Speaker 1: eventually exceed that of the physical world. In other words, 255 00:13:45,440 --> 00:13:47,720 Speaker 1: he's talking about a future state in which the global 256 00:13:47,720 --> 00:13:52,320 Speaker 1: economy is perhaps to a hundred trillion dollars and fifty 257 00:13:52,920 --> 00:13:56,000 Speaker 1: or more of that is in the metaverse. That seems 258 00:13:56,080 --> 00:13:59,320 Speaker 1: a little large to me, but it doesn't surprise me 259 00:13:59,440 --> 00:14:04,000 Speaker 1: that invests are so excited to invest in this theme. Technologists, 260 00:14:04,400 --> 00:14:07,720 Speaker 1: business owners, investors have come to terms with the fact 261 00:14:07,760 --> 00:14:10,720 Speaker 1: that the Internet caught many of us by surprise. The 262 00:14:10,840 --> 00:14:16,160 Speaker 1: mobile Internet came much faster and proliferated faster than we anticipated, 263 00:14:16,240 --> 00:14:20,040 Speaker 1: cloud was more disruptive. Just as business leaders have learned 264 00:14:20,040 --> 00:14:23,640 Speaker 1: about disruption theory investors have learned about the pace of change, 265 00:14:23,960 --> 00:14:35,480 Speaker 1: the enormity of a platform shift, and they're preparing. I 266 00:14:35,560 --> 00:14:37,400 Speaker 1: have three visions in my head. You tell me which 267 00:14:37,440 --> 00:14:40,240 Speaker 1: one is probably the most where we're going. One is 268 00:14:40,280 --> 00:14:44,040 Speaker 1: Ready Player. One the oasis where one thing kind of 269 00:14:44,080 --> 00:14:47,480 Speaker 1: becomes like the where everybody puts on their goggles and 270 00:14:47,480 --> 00:14:51,400 Speaker 1: they all live in there, and yet society crumbles around them. 271 00:14:51,400 --> 00:14:54,720 Speaker 1: That's probably like a dark vision, but that's one. The 272 00:14:54,760 --> 00:14:58,640 Speaker 1: other one is more like Mark Zuckerberg's commercial on Good 273 00:14:58,640 --> 00:15:01,480 Speaker 1: Morning America where he's sitting there a meeting talking to people, 274 00:15:01,520 --> 00:15:03,360 Speaker 1: a how you doing like zoom, but like you're like 275 00:15:03,400 --> 00:15:06,000 Speaker 1: a robot or like a fake version of yourself, whereas 276 00:15:06,000 --> 00:15:08,760 Speaker 1: we're in the skeleton outfit. Then the other is something 277 00:15:08,800 --> 00:15:11,000 Speaker 1: like Roadblocks, which I see my son playing, where he's 278 00:15:11,000 --> 00:15:14,160 Speaker 1: too dimensional and he's sort of interacting. I I guess 279 00:15:14,200 --> 00:15:16,120 Speaker 1: I'll throw this to Matt cantonman, you know, because I 280 00:15:16,120 --> 00:15:20,400 Speaker 1: saw you shaking your head like um, you know, especially 281 00:15:20,400 --> 00:15:22,760 Speaker 1: with Matthew Ball saying that that that much of this 282 00:15:23,800 --> 00:15:27,720 Speaker 1: total revenue could come for total economic activity could come 283 00:15:27,760 --> 00:15:31,000 Speaker 1: from in there, it seems like the oasis would be 284 00:15:31,040 --> 00:15:34,800 Speaker 1: the vision that would exist. No no, I don't think so. 285 00:15:34,920 --> 00:15:38,000 Speaker 1: I think that is a way to access the metaverse, 286 00:15:38,080 --> 00:15:40,720 Speaker 1: but it's not the way to access the metaverse. I mean, 287 00:15:41,480 --> 00:15:43,240 Speaker 1: you know, if you just think about the iterations of 288 00:15:43,240 --> 00:15:46,320 Speaker 1: the Internet, right, we went from web pages to you know, 289 00:15:46,440 --> 00:15:50,040 Speaker 1: social to mobile, and now we're entering the metaverse era 290 00:15:50,080 --> 00:15:53,120 Speaker 1: of the Internet. And really we're just enabling everything that's 291 00:15:53,120 --> 00:15:55,640 Speaker 1: out there with real time three D software and making 292 00:15:55,640 --> 00:15:58,800 Speaker 1: it more social and more persistent. So an analogy would be, 293 00:15:58,840 --> 00:16:01,200 Speaker 1: for example, you have face Book. You know, you're scrolling 294 00:16:01,200 --> 00:16:03,600 Speaker 1: your wall or Instagram, and it's all photos and posts. 295 00:16:03,640 --> 00:16:06,560 Speaker 1: It's all static, it's two D. It's not immersive. You're 296 00:16:06,560 --> 00:16:09,640 Speaker 1: not interacting with it in lifetime. Imagine if that was 297 00:16:09,720 --> 00:16:12,840 Speaker 1: a virtual bulletin board and you and your avatar were 298 00:16:12,840 --> 00:16:15,640 Speaker 1: walking around and pinning things to the board and others 299 00:16:15,640 --> 00:16:17,840 Speaker 1: were coming up and reading it in lifetime and the 300 00:16:17,960 --> 00:16:21,200 Speaker 1: changes they make affect your board. That is a metaverse 301 00:16:21,400 --> 00:16:23,600 Speaker 1: in theory, right, And then you talk about the business 302 00:16:23,600 --> 00:16:26,520 Speaker 1: opportunities around that. So it doesn't have to be locking 303 00:16:26,560 --> 00:16:28,960 Speaker 1: yourself in a headset. It doesn't have to be putting 304 00:16:29,000 --> 00:16:31,640 Speaker 1: yourself away from the world. It's it's just a new 305 00:16:31,680 --> 00:16:34,400 Speaker 1: way to interact and immerse yourself with others in a 306 00:16:34,480 --> 00:16:37,920 Speaker 1: virtual world. I kind of love this question of anchoring 307 00:16:37,960 --> 00:16:40,480 Speaker 1: in science fiction because, of course, the metaverse comes from 308 00:16:40,520 --> 00:16:45,480 Speaker 1: snow Crash, and many, especially critics, tend to highlight the 309 00:16:45,480 --> 00:16:48,200 Speaker 1: fact that all of the most popular conceptions of the 310 00:16:48,240 --> 00:16:52,640 Speaker 1: metaverse or a virtual future come from dystopic science fiction novels. 311 00:16:53,480 --> 00:16:56,800 Speaker 1: I found it funny because, of course, utopias aren't the 312 00:16:56,880 --> 00:17:02,160 Speaker 1: best situation or construct human drama. By definition. There's a 313 00:17:02,200 --> 00:17:05,000 Speaker 1: reason why we don't find many sci fi novels, nor 314 00:17:05,080 --> 00:17:08,080 Speaker 1: any novels at all, that are set in a pacific 315 00:17:08,160 --> 00:17:12,280 Speaker 1: perfect version of the future. It's a good narrative device. 316 00:17:13,080 --> 00:17:15,080 Speaker 1: But to take a step back, I think one of 317 00:17:15,080 --> 00:17:17,679 Speaker 1: the most interesting things about asking this question of what 318 00:17:17,760 --> 00:17:20,600 Speaker 1: does the metaverse look like? A question many people ask, 319 00:17:21,400 --> 00:17:24,639 Speaker 1: is that innovation is recursive. This is actually why disruption 320 00:17:24,840 --> 00:17:29,080 Speaker 1: is so threatening to today's companies. A technology is created, 321 00:17:29,400 --> 00:17:33,080 Speaker 1: which leads to new behaviors, which leads to new use 322 00:17:33,119 --> 00:17:38,080 Speaker 1: cases for that technology, which leads to follow on innovations, creations, 323 00:17:38,200 --> 00:17:42,159 Speaker 1: emergence of new business models, new companies. If you went 324 00:17:42,240 --> 00:17:46,360 Speaker 1: to or two thousand and five and ask someone what 325 00:17:46,440 --> 00:17:51,240 Speaker 1: does twenty one look like. The closest you'd get to 326 00:17:51,240 --> 00:17:55,679 Speaker 1: today was essentially platitudes like more people online, more often 327 00:17:55,800 --> 00:17:59,359 Speaker 1: from more places with better broadband. You don't get people 328 00:17:59,480 --> 00:18:03,840 Speaker 1: describe being TikTok, which now owns the Billboard one. You 329 00:18:03,920 --> 00:18:10,040 Speaker 1: certainly don't get the expectation that app based trading platforms 330 00:18:10,080 --> 00:18:14,240 Speaker 1: with zero commission would lead to Yolo options trading on 331 00:18:14,280 --> 00:18:18,520 Speaker 1: the subway because your board, which simultaneously rescues a company 332 00:18:18,560 --> 00:18:23,240 Speaker 1: from bankruptcy. You don't get the idea that the most 333 00:18:23,440 --> 00:18:27,880 Speaker 1: popular real time three D rendered experience globally would be 334 00:18:27,920 --> 00:18:31,160 Speaker 1: Battle Royal games that didn't even exist until a few 335 00:18:31,240 --> 00:18:36,359 Speaker 1: years ago. Innovation is recursive, It inspires, it is responded to, 336 00:18:37,119 --> 00:18:38,520 Speaker 1: and so I think we can take a look at 337 00:18:38,560 --> 00:18:42,600 Speaker 1: some of the early conceptions of the metaverse. The truth 338 00:18:42,680 --> 00:18:46,719 Speaker 1: is it will probably look, feel and change our lives 339 00:18:46,720 --> 00:18:49,199 Speaker 1: in a way we can't anticipate. No one thought that 340 00:18:49,280 --> 00:18:52,879 Speaker 1: social media was going to lead to election engineering by 341 00:18:52,920 --> 00:18:56,040 Speaker 1: foreign states in the way that it did, And that's 342 00:18:56,040 --> 00:18:58,680 Speaker 1: actually what's going to happen here. It's the threat, it's 343 00:18:58,720 --> 00:19:02,520 Speaker 1: the opportunity. Okay, So I want to ask another type 344 00:19:02,520 --> 00:19:05,879 Speaker 1: of question, which was and and Matthew I'd love your 345 00:19:05,920 --> 00:19:12,200 Speaker 1: perspective on this. Facebook embroiled in this massive, massive scandal 346 00:19:13,600 --> 00:19:16,040 Speaker 1: basically pulls a rabbit out of a hat with like 347 00:19:16,200 --> 00:19:21,199 Speaker 1: maybe you know a rebrand that will in you know, 348 00:19:21,320 --> 00:19:23,199 Speaker 1: when we look back on this for years, like it 349 00:19:23,240 --> 00:19:26,520 Speaker 1: could be like the greatest business case study of all 350 00:19:26,560 --> 00:19:29,560 Speaker 1: time if they pull this thing off or it's Facebook 351 00:19:30,560 --> 00:19:34,680 Speaker 1: now formerly Facebook also known as Metal Platforms, and all 352 00:19:34,800 --> 00:19:38,160 Speaker 1: of the problems and societal issues that we've been grappling 353 00:19:38,160 --> 00:19:41,919 Speaker 1: with in this Facebook context are now just amplified to 354 00:19:42,040 --> 00:19:44,359 Speaker 1: the inth degree because now it's all in the metaverse. 355 00:19:44,880 --> 00:19:49,120 Speaker 1: So where do you rate the rebrand scale of one 356 00:19:49,119 --> 00:19:53,199 Speaker 1: to ten, ten being the greatest thing ever? Well? I 357 00:19:53,240 --> 00:19:55,480 Speaker 1: think Mark has received some criticism as to whether or 358 00:19:55,480 --> 00:19:57,560 Speaker 1: not this is a sleight of hand, whether his interest 359 00:19:57,560 --> 00:20:01,040 Speaker 1: in the metaverse is new, and I think that misses 360 00:20:01,080 --> 00:20:05,480 Speaker 1: a lot of context. Two years after he acquired Instagram 361 00:20:05,560 --> 00:20:09,040 Speaker 1: for a billion, he acquired Oculus VR for more than 362 00:20:09,080 --> 00:20:15,120 Speaker 1: twice that sum. In he reportedly tried to purchase Unity now, 363 00:20:15,119 --> 00:20:18,640 Speaker 1: a seventy billion dollar game engine company. A few years ago, 364 00:20:18,680 --> 00:20:21,840 Speaker 1: they acquired a company called Control Labs, the leader in 365 00:20:22,000 --> 00:20:26,760 Speaker 1: brain to machine computer interfaces. They have been investing in 366 00:20:26,840 --> 00:20:31,480 Speaker 1: this and other technologies for many, many years. His interest 367 00:20:31,600 --> 00:20:35,480 Speaker 1: in this concept is certainly not new. I also want 368 00:20:35,520 --> 00:20:38,960 Speaker 1: to highlight that Mark is actually a survivor of the 369 00:20:39,040 --> 00:20:42,919 Speaker 1: pre mobile era. Facebook has become a case study for 370 00:20:43,000 --> 00:20:45,480 Speaker 1: the speed with which a company can pivot to mobile, 371 00:20:45,560 --> 00:20:49,159 Speaker 1: But that history often forgets He was late to mobile. 372 00:20:49,600 --> 00:20:54,199 Speaker 1: Why because they bet on ht amount not apps. In 373 00:20:54,280 --> 00:20:56,919 Speaker 1: two thousand and eight, Apple launched the app store. In 374 00:20:57,000 --> 00:20:59,080 Speaker 1: two thousand and nine, they came out with their famous 375 00:20:59,119 --> 00:21:02,879 Speaker 1: campaign there is an app for that in Sesame Street 376 00:21:03,040 --> 00:21:07,199 Speaker 1: parodied that campaign, and yet it wasn't until twelve that 377 00:21:07,280 --> 00:21:10,520 Speaker 1: Facebook actually launched a native app. Before then, it was 378 00:21:10,560 --> 00:21:15,400 Speaker 1: a thin client based on HTML. Mark called that in 379 00:21:15,440 --> 00:21:19,639 Speaker 1: the biggest mistake in the company's history. Within one month 380 00:21:20,240 --> 00:21:23,240 Speaker 1: of rewriting the app to native code, time in the 381 00:21:23,280 --> 00:21:28,199 Speaker 1: Facebook feed doubled. Imagine that. Imagine just changing your code 382 00:21:28,520 --> 00:21:33,800 Speaker 1: and doubling engagement in an engagement based platform. Now they survived, 383 00:21:34,119 --> 00:21:37,160 Speaker 1: But what did happen in two thousand and nine, when 384 00:21:37,160 --> 00:21:41,400 Speaker 1: Facebook had three fifty million monthly active users. What's app 385 00:21:41,520 --> 00:21:45,840 Speaker 1: was founded? It was specifically founded on being app based communication. 386 00:21:46,359 --> 00:21:49,560 Speaker 1: They ultimately bought that company for fourteen billion dollars. It's 387 00:21:49,600 --> 00:21:52,800 Speaker 1: now believed to be the most popular of the Facebook 388 00:21:52,840 --> 00:21:57,080 Speaker 1: constellation of applications. What I see in this rebrand is 389 00:21:57,080 --> 00:22:01,400 Speaker 1: a manifestation of many, many years of investment and belief. 390 00:22:01,760 --> 00:22:05,760 Speaker 1: But most importantly, someone who understands the threat of platform 391 00:22:05,800 --> 00:22:09,320 Speaker 1: shifts sees an opportunity to grow. They've been stymming by 392 00:22:09,320 --> 00:22:11,760 Speaker 1: their lack of an operating system. They have a business 393 00:22:11,760 --> 00:22:15,159 Speaker 1: model predicated upon one very flawed business model, and so 394 00:22:15,200 --> 00:22:18,720 Speaker 1: he sees opportunity. But I think there's a genuine belief 395 00:22:18,880 --> 00:22:24,520 Speaker 1: that this rebrand can be an important signal to investors, 396 00:22:24,760 --> 00:22:29,680 Speaker 1: to partners, to current employees, to potential employees, and to consumers. 397 00:22:29,920 --> 00:22:32,680 Speaker 1: It's very dangerous to have one of the most valuable 398 00:22:32,720 --> 00:22:36,840 Speaker 1: companies on Earth and tell every shareholder you should now 399 00:22:36,920 --> 00:22:40,040 Speaker 1: evaluate me on a thing I say is five to 400 00:22:40,119 --> 00:22:43,359 Speaker 1: ten years away and which I am going to incinerate 401 00:22:43,440 --> 00:22:47,399 Speaker 1: ten billion dollars per annum in pursuit of whether or 402 00:22:47,400 --> 00:22:50,240 Speaker 1: not Meta is the right name is not particularly interesting 403 00:22:50,280 --> 00:22:53,040 Speaker 1: to me. I'm no branding expert. I look at whether 404 00:22:53,080 --> 00:22:54,760 Speaker 1: or not this is new. I don't think it is. 405 00:22:54,800 --> 00:22:57,480 Speaker 1: Whether or not it's important, I do think so, And 406 00:22:57,480 --> 00:22:59,960 Speaker 1: whether or not it has utility, and irrespective of the 407 00:23:00,040 --> 00:23:03,399 Speaker 1: specific name, I do see that it's a powerful signal. 408 00:23:05,520 --> 00:23:09,040 Speaker 1: And I just translate Matt into cynical financial analysts PEA 409 00:23:09,080 --> 00:23:11,679 Speaker 1: because I have the same view, but from a cynical perspective, 410 00:23:11,720 --> 00:23:14,040 Speaker 1: and it's that you know, when Facebook was in the 411 00:23:14,040 --> 00:23:15,919 Speaker 1: web era, they were the walled garden or if not 412 00:23:16,000 --> 00:23:19,120 Speaker 1: one of the large walled garden platforms. And everyone wants 413 00:23:19,119 --> 00:23:20,840 Speaker 1: to be the walled garden because you get to clip 414 00:23:20,880 --> 00:23:23,920 Speaker 1: coupons for free on other people spending and commissions on 415 00:23:23,960 --> 00:23:26,480 Speaker 1: app stores and whatnot. Right we went to mobile, they 416 00:23:26,480 --> 00:23:29,080 Speaker 1: lost being in the waled garden. You know, they have great, 417 00:23:29,160 --> 00:23:32,720 Speaker 1: powerful platforms, but Apple and Google and others really became 418 00:23:32,760 --> 00:23:36,160 Speaker 1: these these waled garden platforms. And so the cynical view 419 00:23:36,240 --> 00:23:38,800 Speaker 1: was also they see the metaverse as this opportunity to 420 00:23:38,840 --> 00:23:41,760 Speaker 1: reclaim that position in the market. And you know, as 421 00:23:41,760 --> 00:23:45,760 Speaker 1: Matt was saying, build out ancillary revenue streams beyond advertising 422 00:23:45,880 --> 00:23:49,280 Speaker 1: from devices and content, but also from creating an app 423 00:23:49,320 --> 00:23:52,080 Speaker 1: platform that where people come to them and pay them 424 00:23:52,200 --> 00:23:55,320 Speaker 1: and they take commissions from other people that spending. I mean, look, 425 00:23:55,520 --> 00:23:58,320 Speaker 1: that's assuredly true because the business model on their new 426 00:23:58,359 --> 00:24:01,840 Speaker 1: devices requires that here. Whether or not you want to 427 00:24:01,880 --> 00:24:04,720 Speaker 1: say it starts at one end or the other is 428 00:24:04,800 --> 00:24:09,080 Speaker 1: I think a question of determination. But certainly the history 429 00:24:09,119 --> 00:24:12,560 Speaker 1: of companies that are disrupted or stimed does lead to 430 00:24:12,560 --> 00:24:16,000 Speaker 1: philosophical change. Brad Smith at Microsoft, the president, has said 431 00:24:16,320 --> 00:24:20,280 Speaker 1: Microsoft was on the wrong side of open versus closed. 432 00:24:20,880 --> 00:24:25,120 Speaker 1: One can very fairly wonder if Microsoft had not been 433 00:24:25,359 --> 00:24:29,479 Speaker 1: largely boxed out of the hardware and operating system of 434 00:24:29,520 --> 00:24:33,119 Speaker 1: the mobile era, they would have had that change of perspective. 435 00:24:33,359 --> 00:24:36,199 Speaker 1: I think that's absolutely valid, and that's the nature of 436 00:24:36,240 --> 00:24:40,040 Speaker 1: any person. Frankly, if I'm Mark Zuckerberg and I'm gonna 437 00:24:40,080 --> 00:24:43,960 Speaker 1: make this pivot and it's gonna be a big pivot, 438 00:24:44,480 --> 00:24:48,880 Speaker 1: there's one There's one ticker that I would really love 439 00:24:49,040 --> 00:24:52,600 Speaker 1: to have if I'm going from Facebook into the metaverse, 440 00:24:52,720 --> 00:24:55,199 Speaker 1: and that ticker seems like it would be meta. But 441 00:24:55,240 --> 00:24:59,080 Speaker 1: that ticket was taken by you. How many times have 442 00:24:59,119 --> 00:25:02,560 Speaker 1: you heard from Mark Yeah or Facebook to try and 443 00:25:02,600 --> 00:25:07,919 Speaker 1: get the ticker that you got first? Not once? Come on? 444 00:25:09,600 --> 00:25:12,760 Speaker 1: Just like just random briefcases of cash show up. Does 445 00:25:12,760 --> 00:25:16,639 Speaker 1: that count? Well, We've gotten a number of briefcases in 446 00:25:16,880 --> 00:25:22,359 Speaker 1: cash in creates, many of them and I think a 447 00:25:22,400 --> 00:25:25,040 Speaker 1: good deal of any metaverse oriented companies R and D 448 00:25:25,160 --> 00:25:27,880 Speaker 1: Budget might be might be well positioned to bet there. 449 00:25:27,920 --> 00:25:32,920 Speaker 1: But no, the response has been from investors, Okay, let 450 00:25:32,920 --> 00:25:35,960 Speaker 1: me let me pivot there to another Mark Zuckerberg question. 451 00:25:36,400 --> 00:25:38,320 Speaker 1: I'll throw this to Matt Cantonman, since I know you 452 00:25:38,560 --> 00:25:40,600 Speaker 1: spend a lot of time in the metaverse. Last time 453 00:25:40,600 --> 00:25:42,679 Speaker 1: we had you on about video games, you you were up. 454 00:25:42,720 --> 00:25:44,959 Speaker 1: He was like gaming while he was on the like 455 00:25:45,200 --> 00:25:49,040 Speaker 1: you're you're like, you're in it. And so there's an 456 00:25:49,040 --> 00:25:51,680 Speaker 1: elon must put this tweet out, which had Mark Zuckerberg 457 00:25:51,760 --> 00:25:55,720 Speaker 1: in his like you know during his explanatory video, except 458 00:25:55,800 --> 00:25:58,760 Speaker 1: the caption said if you die in the metaverse, you 459 00:25:58,920 --> 00:26:02,000 Speaker 1: die in real life. And Okay, fine, it's funny, but 460 00:26:02,240 --> 00:26:07,520 Speaker 1: it taps into it's true, it taps into this sort 461 00:26:07,560 --> 00:26:10,240 Speaker 1: of I don't know, um, I think Matthew Ball said 462 00:26:10,240 --> 00:26:13,440 Speaker 1: earlier dystopian, this idea that we're all gonna like live 463 00:26:13,480 --> 00:26:16,760 Speaker 1: in there, and what are the consequences to humanity of 464 00:26:16,800 --> 00:26:20,040 Speaker 1: like putting all of our spirit in this fake world. 465 00:26:20,880 --> 00:26:22,600 Speaker 1: If you take it from a high level and you 466 00:26:22,680 --> 00:26:27,720 Speaker 1: look at what's driving consumer demand for these sorts of experiences, 467 00:26:28,160 --> 00:26:31,320 Speaker 1: it's all about self expression. In the real world, we 468 00:26:31,320 --> 00:26:34,640 Speaker 1: wear the clothes we wear, we buy handbags, we buy 469 00:26:34,680 --> 00:26:37,639 Speaker 1: other things because we want to give off an impression 470 00:26:37,640 --> 00:26:40,600 Speaker 1: of ourselves to others around us. We want those items 471 00:26:40,600 --> 00:26:42,920 Speaker 1: that we wear, that we buy, that we interact with 472 00:26:43,200 --> 00:26:45,960 Speaker 1: to tell a story about ourselves. And in the metaverse, 473 00:26:46,000 --> 00:26:48,639 Speaker 1: in the virtual world, it's the same thing. What your 474 00:26:48,680 --> 00:26:51,240 Speaker 1: avatar wears, what they look like, what they do that, 475 00:26:51,440 --> 00:26:55,119 Speaker 1: the dance moves they do, um, the items they wear. 476 00:26:55,240 --> 00:26:58,080 Speaker 1: You know, in roadblocks, somebody paid the equivalent of four 477 00:26:58,119 --> 00:27:01,240 Speaker 1: thousand U S dollars for a virtual g bag. It's 478 00:27:01,280 --> 00:27:04,080 Speaker 1: not an n f T. It's not something you can 479 00:27:04,280 --> 00:27:06,840 Speaker 1: pick out, you can't sell it, you can't do anything 480 00:27:06,840 --> 00:27:09,040 Speaker 1: with it. But it just is an expression of their 481 00:27:09,119 --> 00:27:11,760 Speaker 1: virtual self. And they thought that value was enough to 482 00:27:11,800 --> 00:27:14,560 Speaker 1: justify that. So, you know, when I think about it 483 00:27:14,600 --> 00:27:17,520 Speaker 1: that way, although you may not physically die, you know 484 00:27:17,880 --> 00:27:20,400 Speaker 1: you have an emotional connection to this avatar that you've 485 00:27:20,400 --> 00:27:22,840 Speaker 1: created of yourself in the metaverse at some point, and 486 00:27:22,880 --> 00:27:24,960 Speaker 1: at that level, when that character dies, you can feel 487 00:27:24,960 --> 00:27:28,960 Speaker 1: something from that. Rebecca, what do you think the resale 488 00:27:29,040 --> 00:27:32,119 Speaker 1: value for that four thousand dollar Gucci bag looks like 489 00:27:33,359 --> 00:27:36,439 Speaker 1: so I think coming from a female Asian perspective, you know, 490 00:27:36,760 --> 00:27:39,320 Speaker 1: Asians do love to shop and females do love their 491 00:27:39,359 --> 00:27:42,679 Speaker 1: shopping bag. I'm surprised or May's hasn't jumped on this 492 00:27:42,800 --> 00:27:45,120 Speaker 1: and come up with a virtual Kelly or Broken, because 493 00:27:45,119 --> 00:27:48,000 Speaker 1: I'm sure that would sell much more than the Gucci bag. 494 00:27:48,000 --> 00:27:50,399 Speaker 1: But I definitely think there's a market for this. And 495 00:27:50,440 --> 00:27:52,720 Speaker 1: what's interesting is looking at the e t F space 496 00:27:52,760 --> 00:27:55,400 Speaker 1: from an Asian perspective, most of the flows that we've 497 00:27:55,440 --> 00:27:59,240 Speaker 1: gotten is from retail, and this is a shift from 498 00:27:59,560 --> 00:28:01,880 Speaker 1: where you normally see growth. So usually in the et 499 00:28:01,960 --> 00:28:05,439 Speaker 1: F spaces institutional clients that are supporting this, but in Asia, 500 00:28:05,520 --> 00:28:08,000 Speaker 1: most of the flowing Korea is all from retail more 501 00:28:08,000 --> 00:28:12,239 Speaker 1: than and the head of e t F s at 502 00:28:12,320 --> 00:28:16,080 Speaker 1: Mira Mr. June said that since the simultaneous launch of 503 00:28:16,119 --> 00:28:18,360 Speaker 1: four meta e t F s in Korea last month, 504 00:28:18,400 --> 00:28:21,480 Speaker 1: the theme has learned much attention from retail investors and 505 00:28:21,520 --> 00:28:24,720 Speaker 1: the media, and so companies are actually in Korea are 506 00:28:24,800 --> 00:28:27,639 Speaker 1: actually spending money to further develop the R and D 507 00:28:27,720 --> 00:28:31,359 Speaker 1: and capital investments and so in Asia, retail is a 508 00:28:31,440 --> 00:28:35,359 Speaker 1: huge market. You know, the Chinese market drive the retail population, 509 00:28:35,440 --> 00:28:37,439 Speaker 1: and so I think there is huge potential, especially in 510 00:28:37,440 --> 00:28:40,160 Speaker 1: Asia for this growth. So actually let's just stick with 511 00:28:40,200 --> 00:28:41,360 Speaker 1: you for a little bit because I want to talk 512 00:28:41,360 --> 00:28:44,120 Speaker 1: about sort of what what's inside the e t f 513 00:28:44,200 --> 00:28:46,840 Speaker 1: s themselves, right, and like you you mentioned the ones 514 00:28:46,880 --> 00:28:49,160 Speaker 1: that have popped up in Asia, but we've also got 515 00:28:49,240 --> 00:28:52,120 Speaker 1: Mr Balls here what stands out to you in terms 516 00:28:52,200 --> 00:28:54,680 Speaker 1: of like what companies the e t f s are 517 00:28:54,680 --> 00:28:59,840 Speaker 1: actually holding. So in Korea, the market is ultimately trying 518 00:28:59,880 --> 00:29:01,920 Speaker 1: to support the Korean market, and so for all of 519 00:29:01,960 --> 00:29:04,600 Speaker 1: these four e t f s, they've picked Korean companies. 520 00:29:05,000 --> 00:29:07,400 Speaker 1: And so for instance, Hub, which is one of them, 521 00:29:07,440 --> 00:29:10,760 Speaker 1: it's uh, it operates in the entertainment space. And so 522 00:29:10,920 --> 00:29:13,480 Speaker 1: Matthew and I were actually debating this last week, just saying, 523 00:29:13,520 --> 00:29:17,040 Speaker 1: you know, do you really consider these companies met first 524 00:29:17,080 --> 00:29:20,760 Speaker 1: companies or are they just entertainment systems entertainment companies? And 525 00:29:20,760 --> 00:29:22,880 Speaker 1: so I think it really depends on what your definition is. 526 00:29:23,040 --> 00:29:25,600 Speaker 1: For instance, in Taiwan, they already have e t f 527 00:29:25,640 --> 00:29:29,560 Speaker 1: s that they consider our metaverse ETFs. But it ultimately 528 00:29:29,600 --> 00:29:32,080 Speaker 1: comes down to what your definition of metaverses. And I 529 00:29:32,120 --> 00:29:41,400 Speaker 1: think everyone has a different definition, And you know, my 530 00:29:41,440 --> 00:29:44,320 Speaker 1: son at one point wanted to get paid for chores 531 00:29:44,320 --> 00:29:47,360 Speaker 1: and roebucks and that was my first indicator that this 532 00:29:47,480 --> 00:29:50,120 Speaker 1: is like a really big you know, uh something that 533 00:29:50,280 --> 00:29:53,040 Speaker 1: was to you know, something to watch. And when I 534 00:29:53,040 --> 00:29:55,560 Speaker 1: think of crypto as being the sort of like Internet, 535 00:29:55,600 --> 00:29:59,000 Speaker 1: you know, money that that can be seamlessly transferred, is 536 00:29:59,480 --> 00:30:03,120 Speaker 1: roebuck or whatever might be used in the metaverse a 537 00:30:03,240 --> 00:30:07,160 Speaker 1: threat to crypto or just because crypto actually plug into it? Um, 538 00:30:07,640 --> 00:30:10,680 Speaker 1: Matthew Ball, how do you see that that that's sort 539 00:30:10,720 --> 00:30:14,560 Speaker 1: of like playing out with crypto and the metaverse. It's interesting. 540 00:30:14,600 --> 00:30:17,680 Speaker 1: I think it's very frequent to hear this conflation of 541 00:30:17,720 --> 00:30:20,440 Speaker 1: Web three or crypto with the metaverse. I tend to 542 00:30:20,480 --> 00:30:24,560 Speaker 1: think that it's a bit like conflating industrialization or electrification 543 00:30:24,720 --> 00:30:29,440 Speaker 1: with democratic republics. One is a technological process, the other 544 00:30:29,520 --> 00:30:33,840 Speaker 1: is about how we organize in society. Where these two 545 00:30:33,920 --> 00:30:38,480 Speaker 1: themes intersect is about what the metaverse economy needs to thrive. 546 00:30:38,560 --> 00:30:40,440 Speaker 1: And one way to think about that is the old 547 00:30:40,480 --> 00:30:44,800 Speaker 1: adage possession is nine tenths of the law. Well, in 548 00:30:45,000 --> 00:30:49,200 Speaker 1: most central server models, you can never take possession of 549 00:30:49,320 --> 00:30:53,160 Speaker 1: anything you don't own it. Where it is is on 550 00:30:53,200 --> 00:30:57,400 Speaker 1: a central server with a central database saying you eric 551 00:30:57,600 --> 00:31:00,760 Speaker 1: have this thing. It can be deleted, it can be removed, 552 00:31:00,800 --> 00:31:03,320 Speaker 1: they can disagree, it can be sees you can never 553 00:31:03,400 --> 00:31:07,200 Speaker 1: take possession of it. And note that in the real world, 554 00:31:07,880 --> 00:31:10,040 Speaker 1: the fact that you have something in your possession doesn't 555 00:31:10,040 --> 00:31:12,840 Speaker 1: mean the government can't take it, but we reflect that 556 00:31:12,920 --> 00:31:15,760 Speaker 1: the vast majority of the power goes to you holding it. 557 00:31:16,200 --> 00:31:20,360 Speaker 1: The perspective in the crypto community is that blockchain technology 558 00:31:20,360 --> 00:31:22,960 Speaker 1: for n f T s and assets is critical to 559 00:31:23,200 --> 00:31:27,200 Speaker 1: ensuring the requisite property rights and trust in the market 560 00:31:27,560 --> 00:31:31,920 Speaker 1: for investment. Are you going to buy a ten dollar 561 00:31:32,000 --> 00:31:35,440 Speaker 1: parcel of land or two million dollar avatar that you 562 00:31:35,480 --> 00:31:38,520 Speaker 1: can never truly take possession of that you have no 563 00:31:38,640 --> 00:31:43,640 Speaker 1: guaranteed rights to and in a dispute the owning party 564 00:31:43,680 --> 00:31:46,080 Speaker 1: can just take it from you until the court forces 565 00:31:46,120 --> 00:31:49,480 Speaker 1: it back to you, you individual person who makes twenty 566 00:31:49,880 --> 00:31:55,080 Speaker 1: dollars per year. These don't require decentralization as a solution, 567 00:31:55,440 --> 00:32:02,000 Speaker 1: but decentralization is the increasingly deployed solution with rapid adoption 568 00:32:02,240 --> 00:32:07,200 Speaker 1: and crucially a considerable amount of revenue behind it, which 569 00:32:07,720 --> 00:32:10,720 Speaker 1: seems to drive more adoption from developers and in turn 570 00:32:10,920 --> 00:32:14,000 Speaker 1: users and Ultimately, and this is a key point for 571 00:32:14,120 --> 00:32:17,280 Speaker 1: all of the failures and struggles and gas fees of 572 00:32:17,360 --> 00:32:21,680 Speaker 1: crypto standards don't necessarily win because they're the best. We 573 00:32:21,720 --> 00:32:25,560 Speaker 1: saw that with Beta max and VHS. They win when 574 00:32:25,640 --> 00:32:30,400 Speaker 1: they are considered legitimate and adopted on mass. That is 575 00:32:30,440 --> 00:32:34,520 Speaker 1: what we are starting to see here. You know, applying 576 00:32:34,800 --> 00:32:38,600 Speaker 1: decentralized blockchain and n f T technology as an economy 577 00:32:39,080 --> 00:32:41,320 Speaker 1: is really a business decision for whether it's a game 578 00:32:41,400 --> 00:32:44,920 Speaker 1: or a metaverse platform. It's not an enabling technology at 579 00:32:44,960 --> 00:32:47,040 Speaker 1: its core. You can do a lot of the things 580 00:32:47,080 --> 00:32:51,000 Speaker 1: like providing transferability of items between experiences. You know, if 581 00:32:51,080 --> 00:32:53,080 Speaker 1: Roadblocks and Fortnite wanted to make it so you can 582 00:32:53,160 --> 00:32:55,600 Speaker 1: move items between them, they could do that today without 583 00:32:55,600 --> 00:32:57,320 Speaker 1: a blockchain. They don't need n f T s to 584 00:32:57,360 --> 00:33:00,520 Speaker 1: do that. It's just another layer of ownership and really 585 00:33:00,560 --> 00:33:02,840 Speaker 1: having that decentralized, you know, no one owns it, but 586 00:33:02,920 --> 00:33:07,080 Speaker 1: you monitor that goes with it. That's the real difference. Yeah, 587 00:33:07,080 --> 00:33:09,680 Speaker 1: I mean, I love talking about interoperability and Sharry and 588 00:33:09,720 --> 00:33:15,280 Speaker 1: exchange because there are really severe tech problems in hurdles. 589 00:33:16,120 --> 00:33:18,080 Speaker 1: One of my favorites is actually just to talk about this. 590 00:33:19,520 --> 00:33:23,040 Speaker 1: You know, epistemological question or ontological question about what is 591 00:33:23,040 --> 00:33:27,560 Speaker 1: an avatar? Does an avatar have clothes? Is an avatar 592 00:33:27,680 --> 00:33:30,040 Speaker 1: with a hat and actually an avatar with a hat? 593 00:33:30,160 --> 00:33:32,760 Speaker 1: Or is it an avatar that has an object known 594 00:33:32,800 --> 00:33:35,840 Speaker 1: as a hat? Does an avatar actually have skin? What 595 00:33:35,960 --> 00:33:39,360 Speaker 1: color is the skin? Is that a separate object. Does 596 00:33:39,520 --> 00:33:45,760 Speaker 1: a gelatinous jellyfish and a bodybuilder avatar move in the 597 00:33:45,840 --> 00:33:48,760 Speaker 1: same way? We assume no, But these are actual technical 598 00:33:48,840 --> 00:33:52,200 Speaker 1: decisions that have to be made. When you copy an 599 00:33:52,240 --> 00:33:55,160 Speaker 1: image or I send you a jpeg, it's just bringing 600 00:33:55,240 --> 00:33:59,120 Speaker 1: visual representation. But three D objects require rigging and motion. 601 00:33:59,760 --> 00:34:03,720 Speaker 1: It's when we are talking about interoperation and sharing of objects. 602 00:34:04,200 --> 00:34:08,920 Speaker 1: We are talking about a hard problem of technology. However, 603 00:34:09,920 --> 00:34:14,680 Speaker 1: the harder problem is always policy. It is business. Technology 604 00:34:14,760 --> 00:34:17,600 Speaker 1: can be solved. You can scale up with machine learning, 605 00:34:17,920 --> 00:34:21,399 Speaker 1: you can compress, you can simplify, you can say your 606 00:34:21,480 --> 00:34:24,720 Speaker 1: world has rigging, mind doesn't I'm just going to import 607 00:34:24,760 --> 00:34:27,440 Speaker 1: it and they'll be the same for me. The challenges 608 00:34:27,560 --> 00:34:31,239 Speaker 1: always business policy. One of the reasons why we see 609 00:34:31,520 --> 00:34:35,480 Speaker 1: such network effects in crypto is to some extent, developing 610 00:34:35,640 --> 00:34:39,080 Speaker 1: means giving up that you can't actually develop something and 611 00:34:39,120 --> 00:34:43,480 Speaker 1: then control what people do with it. It's lego. Similarly, 612 00:34:43,480 --> 00:34:45,799 Speaker 1: when you take a look at the virtual world platforms 613 00:34:45,840 --> 00:34:49,800 Speaker 1: of Minecraft and Roadblocks, the fact that their interoperability is 614 00:34:49,920 --> 00:34:54,440 Speaker 1: essentially federated has real technical limitations and that you can't 615 00:34:54,520 --> 00:34:56,880 Speaker 1: do everything you might want to do as a developer 616 00:34:56,920 --> 00:34:59,920 Speaker 1: on Roadblocks, but you do benefit from the network of 617 00:35:00,000 --> 00:35:04,839 Speaker 1: efects of everyone else. And part of the problem here 618 00:35:05,080 --> 00:35:09,359 Speaker 1: is this path of interoperation with crypto from non crypto, 619 00:35:09,480 --> 00:35:12,799 Speaker 1: from closed platforms to other closed platforms. Many including Mark, 620 00:35:12,880 --> 00:35:15,160 Speaker 1: have said that they want to do this, but there's 621 00:35:15,200 --> 00:35:18,520 Speaker 1: no roadmap for how you do that. Um okay, Matthew, Bob, 622 00:35:18,560 --> 00:35:19,759 Speaker 1: I want to bring it back to e t S 623 00:35:19,800 --> 00:35:22,160 Speaker 1: a little bit here and and actually talk about your 624 00:35:22,200 --> 00:35:24,960 Speaker 1: your holdings. How do you decide what goes in this? 625 00:35:25,080 --> 00:35:27,680 Speaker 1: I mean you have I've looked at the index. Uh, 626 00:35:27,880 --> 00:35:32,320 Speaker 1: you have an expert council. Who's on this expert council? 627 00:35:32,360 --> 00:35:34,520 Speaker 1: How do you decide who gets in the e t F? 628 00:35:34,560 --> 00:35:37,839 Speaker 1: And how do you figure out what the holdings are? Sure? So, 629 00:35:38,719 --> 00:35:41,600 Speaker 1: the ball metaverse index, which is behind the round hill 630 00:35:41,719 --> 00:35:45,560 Speaker 1: ball metaverse e t F is a passive thematic rules 631 00:35:45,640 --> 00:35:52,719 Speaker 1: based index. We have detailed methodologies under seven categories hardware, networking, compute, 632 00:35:53,120 --> 00:35:59,160 Speaker 1: virtual platforms, payment rails, content assets and services, as well 633 00:35:59,200 --> 00:36:01,080 Speaker 1: as interchanged endors. You can think of that as your 634 00:36:01,160 --> 00:36:05,240 Speaker 1: unity and unreal We define those seven different categories based 635 00:36:05,280 --> 00:36:07,240 Speaker 1: on the core stack that you see in the Internet, 636 00:36:07,239 --> 00:36:11,239 Speaker 1: in which powers virtual worlds and metaverse experiences. Today, we 637 00:36:11,320 --> 00:36:16,239 Speaker 1: allocated value or waitings to each of those categories, not equivalently, 638 00:36:16,880 --> 00:36:18,719 Speaker 1: because if you take a look at the history of 639 00:36:18,760 --> 00:36:21,680 Speaker 1: the Internet, you'll see that the value or the revenue 640 00:36:21,680 --> 00:36:25,200 Speaker 1: pools differed quite significantly over time. If you take a 641 00:36:25,239 --> 00:36:27,319 Speaker 1: look in the nineties, almost all of the revenue from 642 00:36:27,360 --> 00:36:30,279 Speaker 1: the Internet was in hardware and networking. We weren't buying 643 00:36:30,320 --> 00:36:34,560 Speaker 1: Netflix subscriptions. There wasn't paid ranked with keywords being assigned 644 00:36:34,600 --> 00:36:36,719 Speaker 1: to it. You were buying a Dell computer and a 645 00:36:36,800 --> 00:36:40,120 Speaker 1: o L or Exfinity broadband, and so we had to 646 00:36:40,160 --> 00:36:44,080 Speaker 1: wait each of those seven categories. How we come up 647 00:36:44,120 --> 00:36:47,759 Speaker 1: with the rules for each company that's scored within them 648 00:36:47,760 --> 00:36:52,080 Speaker 1: as our proprietary i P. But it's assembled by this 649 00:36:52,239 --> 00:36:55,360 Speaker 1: expert Council. And for context, the expert Council is a 650 00:36:55,440 --> 00:36:58,560 Speaker 1: council of experts. We have the former lead of in 651 00:36:58,719 --> 00:37:03,160 Speaker 1: Video's Enterprise Clouds streaming offering. The person who launched launched 652 00:37:03,239 --> 00:37:07,280 Speaker 1: Amazon's Instant Applications. Former head of developer relations and content 653 00:37:07,320 --> 00:37:12,320 Speaker 1: strategy for Oculus, former general manager of Steam, former general 654 00:37:12,360 --> 00:37:15,319 Speaker 1: partner at Andres and Horowitz in their crypto division, led 655 00:37:15,320 --> 00:37:19,720 Speaker 1: their Crypto School. Former executive from Spotify, the co executive producer, 656 00:37:19,880 --> 00:37:23,400 Speaker 1: lead game designer of Grand Theft, Auto Red Dead Redemption. 657 00:37:24,400 --> 00:37:27,919 Speaker 1: This expert council only four of the seven of which 658 00:37:27,920 --> 00:37:31,440 Speaker 1: I've just described came up with this methodology, and the 659 00:37:31,600 --> 00:37:34,960 Speaker 1: belief was the reason why I hired this expert council 660 00:37:35,680 --> 00:37:38,320 Speaker 1: was essentially a reflection of why the et F exists 661 00:37:38,360 --> 00:37:41,480 Speaker 1: in the first place, which is the enormity of this transformation, 662 00:37:41,800 --> 00:37:45,520 Speaker 1: which spans trillions of dollars in every country, in every industry, 663 00:37:45,640 --> 00:37:49,360 Speaker 1: is far beyond one person myself or even a handful 664 00:37:49,680 --> 00:37:53,600 Speaker 1: to truly understand. Then trying to systematize that in an 665 00:37:53,760 --> 00:37:56,920 Speaker 1: index is even more difficult, and so we spent about 666 00:37:56,920 --> 00:38:00,319 Speaker 1: eight months building out this rules based methodology, which we 667 00:38:00,360 --> 00:38:04,320 Speaker 1: then maintain over time. I'm happy to say that among 668 00:38:04,400 --> 00:38:07,080 Speaker 1: all US listed e t f s, we have the 669 00:38:07,120 --> 00:38:10,000 Speaker 1: second highest ranking of roadblocks. Has been a good look 670 00:38:10,120 --> 00:38:15,160 Speaker 1: recently the fourth highest waiting for Nvidia and among our 671 00:38:15,200 --> 00:38:17,759 Speaker 1: top four holdings, all of which I would consider to 672 00:38:17,760 --> 00:38:23,000 Speaker 1: be the leading metaverse companies today Roadblocks and Video, Unity 673 00:38:23,040 --> 00:38:27,839 Speaker 1: and Microsoft we have the largest combined holdings. Now. One 674 00:38:27,880 --> 00:38:31,120 Speaker 1: of the challenges with the e t F right now 675 00:38:31,719 --> 00:38:34,880 Speaker 1: is it is very differently weighted from Q q Q, 676 00:38:35,640 --> 00:38:39,799 Speaker 1: but it still has many of the same tickers. And 677 00:38:39,840 --> 00:38:41,879 Speaker 1: I think that there are a few different important points there. 678 00:38:42,000 --> 00:38:45,440 Speaker 1: Number one is two of those top holdings, Unity and 679 00:38:45,520 --> 00:38:49,120 Speaker 1: Roadblocks were not public last year. That's a good reflection 680 00:38:49,160 --> 00:38:51,400 Speaker 1: of how this e t F is likely to change 681 00:38:51,400 --> 00:38:55,120 Speaker 1: in the future. While all of the triple Q companies 682 00:38:55,160 --> 00:38:58,799 Speaker 1: are pretty up year over year, Unity and Roadblocks were 683 00:38:58,840 --> 00:39:01,040 Speaker 1: valued at less than five billion a year and a 684 00:39:01,080 --> 00:39:04,200 Speaker 1: half ago. There now fifty and seventy five billion dollar companies. 685 00:39:04,239 --> 00:39:07,720 Speaker 1: So our expectation is that the new companies will grow. 686 00:39:08,560 --> 00:39:11,640 Speaker 1: But the nature of a multidecade change is why you 687 00:39:11,719 --> 00:39:15,880 Speaker 1: need a diversified portfolio and why the composition of this 688 00:39:16,000 --> 00:39:19,879 Speaker 1: index will change as the metaverse changes. Which companies lead 689 00:39:19,880 --> 00:39:22,560 Speaker 1: clobly and and I would just add that you know, 690 00:39:22,600 --> 00:39:24,560 Speaker 1: we also expect a lot of these companies that are 691 00:39:24,600 --> 00:39:27,720 Speaker 1: private that are you know, key metaverse companies like Epic 692 00:39:27,760 --> 00:39:30,680 Speaker 1: Games will eventually go public at some point or another. 693 00:39:30,840 --> 00:39:34,440 Speaker 1: You know it's right now there's unlimited and basically infinite 694 00:39:34,480 --> 00:39:36,799 Speaker 1: amounts of private capital for them to stay private, but 695 00:39:37,120 --> 00:39:39,080 Speaker 1: you know at some point that private capital will want 696 00:39:39,080 --> 00:39:41,560 Speaker 1: to exit, and so you know, it's it's it's almost 697 00:39:41,600 --> 00:39:43,120 Speaker 1: a certainty that at some point in the next few 698 00:39:43,160 --> 00:39:44,759 Speaker 1: years a company like Epic will look to I p 699 00:39:44,880 --> 00:39:48,480 Speaker 1: O and probably will join the index. For you guys 700 00:39:48,520 --> 00:39:51,000 Speaker 1: as well as for us are Bloomberg Metaverse Index and 701 00:39:51,120 --> 00:39:53,880 Speaker 1: become a key you know, key holding in those indicries. 702 00:39:55,920 --> 00:39:57,960 Speaker 1: But as much as we will see more and more 703 00:39:58,000 --> 00:40:01,400 Speaker 1: of these companies sort of you go public or ter 704 00:40:02,239 --> 00:40:05,439 Speaker 1: h Matthew Ball's index, I don't know if there could 705 00:40:05,440 --> 00:40:10,120 Speaker 1: have ever been a bigger gift than uh a rebrand 706 00:40:10,120 --> 00:40:13,799 Speaker 1: of a company going from Facebook to meta and just 707 00:40:13,960 --> 00:40:17,919 Speaker 1: having this massive catalyst moment uh Mr Ball, And I'm 708 00:40:17,960 --> 00:40:23,040 Speaker 1: just wondering had that not happened, where would you be. 709 00:40:24,840 --> 00:40:27,680 Speaker 1: It's a good question, I mean, and I think Eric 710 00:40:27,760 --> 00:40:30,960 Speaker 1: tied this up. There's certainly been some attention, especially in 711 00:40:31,000 --> 00:40:32,480 Speaker 1: the first few days, as to whether or not the 712 00:40:32,560 --> 00:40:36,840 Speaker 1: increased inflows were just erroneous trades. I think the assets 713 00:40:36,840 --> 00:40:39,719 Speaker 1: have been incredibly sticky. We're now at eighteen consecutive days 714 00:40:39,719 --> 00:40:42,880 Speaker 1: of inflows. Those inflows have grown from five to fifty 715 00:40:43,000 --> 00:40:46,319 Speaker 1: to sixty to eighty eight million in a day. As 716 00:40:46,320 --> 00:40:49,440 Speaker 1: we get farther and farther from that release date, the 717 00:40:49,480 --> 00:40:51,760 Speaker 1: critical answers if you actually take a look at crypto 718 00:40:51,840 --> 00:40:55,440 Speaker 1: and this is the most important, metaverse oriented tokens have 719 00:40:55,600 --> 00:41:00,440 Speaker 1: grown far, far more than meta and almost universe. What 720 00:41:00,640 --> 00:41:03,399 Speaker 1: this tells me is that the spotlight placed on this 721 00:41:03,520 --> 00:41:06,799 Speaker 1: theme for which we could not have purchased on this timeframe, 722 00:41:07,360 --> 00:41:11,640 Speaker 1: is what's driving the inflows. Greater recognition of the size 723 00:41:11,640 --> 00:41:14,719 Speaker 1: of this opportunity and its magnitude. But I think it's 724 00:41:14,719 --> 00:41:19,520 Speaker 1: important to diversify away from meta platforms here. Yes, in 725 00:41:19,640 --> 00:41:22,520 Speaker 1: July Mark started talking about then at the end of 726 00:41:22,560 --> 00:41:25,640 Speaker 1: October he rebranded. But what has happened since, Well, in 727 00:41:25,800 --> 00:41:28,040 Speaker 1: Video has gone from a company two years ago very 728 00:41:28,040 --> 00:41:30,959 Speaker 1: few people knew to several months ago being the ninth 729 00:41:31,040 --> 00:41:33,760 Speaker 1: largest company on Earth, it's now the sixth largest company 730 00:41:33,800 --> 00:41:37,080 Speaker 1: on Earth. Jensen talks about the metaverse more frequently and 731 00:41:37,160 --> 00:41:40,400 Speaker 1: with greater enthusiasm than anyone else. So you've now got 732 00:41:40,480 --> 00:41:43,759 Speaker 1: the seventh and sixth largest company on Earth, Microsoft, the 733 00:41:43,880 --> 00:41:46,919 Speaker 1: largest company on Earth Satya. Nadela went on a tour 734 00:41:47,080 --> 00:41:50,759 Speaker 1: released videos talking about his vision for the metaverse, how 735 00:41:50,880 --> 00:41:54,040 Speaker 1: his company is going to transform. A few days ago, 736 00:41:54,760 --> 00:41:58,600 Speaker 1: Google announced that it was reconfiguring its organization for the 737 00:41:58,840 --> 00:42:04,399 Speaker 1: xr VR, Google Play Team, Google Labs, and Area one 738 00:42:04,480 --> 00:42:08,040 Speaker 1: twenty their special Projects group. We're going to be reorganized 739 00:42:08,160 --> 00:42:11,719 Speaker 1: into a due reporting unit. We don't know exactly what 740 00:42:11,840 --> 00:42:14,120 Speaker 1: that looks like. It sounds like the metaverse to me. 741 00:42:14,719 --> 00:42:18,960 Speaker 1: In addition, Amazon started rewriting their job postings in m 742 00:42:19,080 --> 00:42:23,720 Speaker 1: L in hardware in their Wearable's division to talk about 743 00:42:23,719 --> 00:42:26,680 Speaker 1: the metaverse. Reports have come out from Morgan Stanley and 744 00:42:26,719 --> 00:42:30,560 Speaker 1: others trying to estimate if Facebook Reality Labs is spending 745 00:42:30,560 --> 00:42:33,839 Speaker 1: twelve billion per anum on the metaverse, what is Amazon doing. 746 00:42:34,239 --> 00:42:37,640 Speaker 1: Their estimate is six to eight billion dollars per year. 747 00:42:38,000 --> 00:42:41,480 Speaker 1: Apple has filed more patents in the last year relating 748 00:42:41,480 --> 00:42:46,160 Speaker 1: to display technology than in their history. That is metaverse 749 00:42:46,239 --> 00:42:51,920 Speaker 1: related investment. I absolutely believe that Facebook has catalyzed interest 750 00:42:51,960 --> 00:42:56,239 Speaker 1: in this scene, but that interest has been constantly reaffirmed 751 00:42:56,280 --> 00:43:00,279 Speaker 1: by the most significant powerful and stand to lose comp's 752 00:43:00,440 --> 00:43:03,000 Speaker 1: on Earth. And if you look at some of this, 753 00:43:03,160 --> 00:43:05,760 Speaker 1: like the share price moves on like Roadbox and Unity recently, 754 00:43:06,320 --> 00:43:10,719 Speaker 1: they didn't budge when Facebook rebranded the metaverse necessarily they 755 00:43:10,719 --> 00:43:12,920 Speaker 1: moved on earnings. And I think what was really impressive 756 00:43:12,960 --> 00:43:14,640 Speaker 1: aside from shortcovering, because I think there was a lot 757 00:43:14,640 --> 00:43:18,000 Speaker 1: of shortcovering that you know, catalyzed modes, but you know, 758 00:43:18,120 --> 00:43:19,600 Speaker 1: I think if you look at Roadblocks, there was a 759 00:43:19,600 --> 00:43:22,440 Speaker 1: lot of concern. I had this concern that not only 760 00:43:22,480 --> 00:43:25,920 Speaker 1: would every all the metrics tail off as we emerged 761 00:43:26,000 --> 00:43:29,640 Speaker 1: from the pandemic, but the engagement, the hours of engagement 762 00:43:29,680 --> 00:43:32,520 Speaker 1: per daily active user on the platform would fall down. 763 00:43:32,560 --> 00:43:35,360 Speaker 1: People would go back to spending less time on the platform. 764 00:43:35,400 --> 00:43:37,600 Speaker 1: And that's not the case. It's actually going up still. 765 00:43:37,840 --> 00:43:40,200 Speaker 1: People are now spending more time than they did during 766 00:43:40,239 --> 00:43:44,560 Speaker 1: lockdowns in the second quarter of Roadblocks. That's one of 767 00:43:44,560 --> 00:43:47,040 Speaker 1: the most encouraging data points that you can see for 768 00:43:47,080 --> 00:43:50,680 Speaker 1: this company, because that really proves the viability and sustainability 769 00:43:50,719 --> 00:43:56,320 Speaker 1: of these platforms is not only gains but as social experiences. Okay, Rebecca, 770 00:43:56,360 --> 00:43:58,480 Speaker 1: I want to ask you a question right before we 771 00:43:58,520 --> 00:44:03,880 Speaker 1: wrap here. You wrote a note that Eric uh found 772 00:44:03,880 --> 00:44:06,239 Speaker 1: a little bold. Now that we've had this conversation, how 773 00:44:06,280 --> 00:44:10,200 Speaker 1: do you feel about that number which was what was it? Yeah? 774 00:44:10,239 --> 00:44:13,760 Speaker 1: My e t F number was eighty billion by twenty 775 00:44:13,880 --> 00:44:16,560 Speaker 1: four and I think that we might actually reach this. 776 00:44:16,680 --> 00:44:19,799 Speaker 1: And the reason why is that, especially in Asia, how 777 00:44:19,840 --> 00:44:22,400 Speaker 1: people define metaverse is a lot more broad. So, for instance, 778 00:44:22,440 --> 00:44:25,280 Speaker 1: if we look at Korea before, Korean ETFs that launch 779 00:44:25,360 --> 00:44:28,000 Speaker 1: track the f N Guide k Meta Index and the 780 00:44:28,080 --> 00:44:31,240 Speaker 1: I Select Metaverse Index, and so these are really companies 781 00:44:31,280 --> 00:44:34,479 Speaker 1: in the tech space, anything from social entertainment to live 782 00:44:34,600 --> 00:44:38,840 Speaker 1: entertainment to technology companies. And in Asia we can expect 783 00:44:38,880 --> 00:44:41,399 Speaker 1: more metaverse e t s to come just because they 784 00:44:41,400 --> 00:44:44,160 Speaker 1: take a much more broad definition of what the metaverse is. 785 00:44:44,680 --> 00:44:47,400 Speaker 1: And if we look at this from a performance perspective, 786 00:44:48,160 --> 00:44:50,400 Speaker 1: for instance, in the past month, the Korean ETFs have 787 00:44:50,640 --> 00:44:53,719 Speaker 1: a one month return of thirty six percent, and so 788 00:44:54,080 --> 00:44:56,799 Speaker 1: the retail investors are loving this. The returns are phenomenal. 789 00:44:57,680 --> 00:44:59,880 Speaker 1: And if we compare this to meta in the US 790 00:45:00,160 --> 00:45:03,439 Speaker 1: in the past month, meta has performed sevent and so 791 00:45:03,760 --> 00:45:06,759 Speaker 1: for ets for investors, a lot of people just jump 792 00:45:06,800 --> 00:45:08,680 Speaker 1: on the bandwagon. You know, metaverse is the thing right now, 793 00:45:08,680 --> 00:45:10,680 Speaker 1: I'm going to invest into it. But what I love 794 00:45:10,719 --> 00:45:13,920 Speaker 1: about E t s is that it's really about the details. 795 00:45:14,480 --> 00:45:16,239 Speaker 1: And so for each et F, even though they are 796 00:45:16,280 --> 00:45:18,640 Speaker 1: branded as a metaverse et F, the underlying is actually 797 00:45:18,719 --> 00:45:22,000 Speaker 1: drastically different. And so for in Asia, the Korean ETFs 798 00:45:22,040 --> 00:45:24,640 Speaker 1: are solely focused on the Korean market, while for the 799 00:45:24,640 --> 00:45:29,040 Speaker 1: Taiwan ets is solely focused on the Taiwan market. And 800 00:45:29,080 --> 00:45:31,560 Speaker 1: so as investors look to the metaverse, you know, they 801 00:45:31,560 --> 00:45:35,480 Speaker 1: really need to be selective in what they want. And unfortunately, 802 00:45:35,560 --> 00:45:38,120 Speaker 1: not all ETF issuers can have the luxury that Matthew 803 00:45:38,120 --> 00:45:42,400 Speaker 1: Ball has by having a very exclusive set of metaverse 804 00:45:42,480 --> 00:45:45,320 Speaker 1: experts on their committee to select the index. And I 805 00:45:45,360 --> 00:45:47,440 Speaker 1: think that's what's going to be the differentiating factor, and 806 00:45:47,480 --> 00:45:49,440 Speaker 1: you're really going to see a difference of that in 807 00:45:49,480 --> 00:45:52,080 Speaker 1: the return and performance of the index. So I think 808 00:45:52,080 --> 00:45:54,600 Speaker 1: this market is going to continue to grow. Facebook has 809 00:45:54,640 --> 00:45:58,680 Speaker 1: definitely helped my prediction and pushed it to get retail interest, 810 00:45:58,760 --> 00:46:02,279 Speaker 1: and I think we might actually hit us. Okay, Matthew Ball, 811 00:46:02,280 --> 00:46:05,720 Speaker 1: I'm gonna wrap with you. We asked this question of 812 00:46:05,719 --> 00:46:08,200 Speaker 1: of many guests on the on the on the program 813 00:46:08,280 --> 00:46:11,520 Speaker 1: on the podcast, favorite E t F ticker that is 814 00:46:11,560 --> 00:46:16,120 Speaker 1: not your own, well, I think the the Easy Camp 815 00:46:16,160 --> 00:46:19,319 Speaker 1: would have to be hacked. Eric served that one up 816 00:46:19,360 --> 00:46:21,520 Speaker 1: to you on a platter, so we talked about it 817 00:46:21,560 --> 00:46:25,040 Speaker 1: a lot, just out of curiosity here where where else 818 00:46:25,320 --> 00:46:28,200 Speaker 1: can you go with Meta? How many other ticket tickers 819 00:46:28,200 --> 00:46:30,680 Speaker 1: do you have in your back pocket that are Meta related? 820 00:46:31,320 --> 00:46:34,359 Speaker 1: I don't have any. But the crew at round Hill 821 00:46:35,040 --> 00:46:40,239 Speaker 1: are experts in ticker selection. They have filed for meme 822 00:46:40,960 --> 00:46:43,799 Speaker 1: for weed. We'll see if they can get that one 823 00:46:43,840 --> 00:46:47,840 Speaker 1: through on ecy. But those guys are absolute pros at 824 00:46:47,920 --> 00:46:50,839 Speaker 1: what they do, but ticker selection has to be top 825 00:46:50,840 --> 00:46:54,480 Speaker 1: among them. Matthew, Matthew, Rebecca, thank you so much for 826 00:46:54,560 --> 00:46:57,400 Speaker 1: joining us in Trillians. Thank you, thank you so much. 827 00:46:57,560 --> 00:47:04,520 Speaker 1: Thank you. Thanks for listening to Trillions. Until next time. 828 00:47:04,560 --> 00:47:07,440 Speaker 1: You can find us on the Bloomberg Terminal, Bloomberg dot com, 829 00:47:07,520 --> 00:47:11,839 Speaker 1: Apple Podcasts, Spotify, and Wordbells. You'd like to listen, we'd 830 00:47:11,840 --> 00:47:14,120 Speaker 1: love to hear from you. We're on Twitter. I'm at 831 00:47:14,200 --> 00:47:17,880 Speaker 1: Joel Weber Show, He's at Eric faul Jinas. This episode 832 00:47:17,880 --> 00:47:21,480 Speaker 1: of Trillions was produced by Magnus Hendrickson. Francesca Levi is 833 00:47:21,480 --> 00:47:36,000 Speaker 1: the head of Bloomberg Podcast Bye,