1 00:00:06,080 --> 00:00:08,600 Speaker 1: Welcome to trillions. I'm Joel Webber and I'm Eric Beltis 2 00:00:12,280 --> 00:00:18,439 Speaker 1: Eric Um, how much gaming are you doing during the pandemic? Well, 3 00:00:18,960 --> 00:00:21,720 Speaker 1: we have Roku and Realko allows you to get these 4 00:00:21,800 --> 00:00:23,759 Speaker 1: free old school games. So I have been playing a 5 00:00:23,760 --> 00:00:28,280 Speaker 1: little Galagha and mini golf and maybe some chess, but 6 00:00:28,920 --> 00:00:31,520 Speaker 1: that probably doesn't count. I think my nine year old 7 00:00:31,560 --> 00:00:35,560 Speaker 1: is a better representative. He's become highly addicted to Roadblocks, 8 00:00:36,080 --> 00:00:38,640 Speaker 1: which is his interactive platform game. Is kind of cool, 9 00:00:38,800 --> 00:00:41,960 Speaker 1: and he likes his Nintendo Switch. So I think he's 10 00:00:42,040 --> 00:00:45,960 Speaker 1: probably more of a representative of like what people are 11 00:00:46,000 --> 00:00:48,159 Speaker 1: doing in the lockdown in terms of gaming. But he's 12 00:00:48,200 --> 00:00:51,519 Speaker 1: definitely gamed more in the past four months. You know. 13 00:00:51,520 --> 00:00:54,160 Speaker 1: It's a constant battle to you know, keep him doing 14 00:00:54,200 --> 00:00:56,800 Speaker 1: other things versus that. But you could feel the poll. Yeah, 15 00:00:56,840 --> 00:01:01,560 Speaker 1: and my guys almost five. That pole is for real Lego. 16 00:01:01,880 --> 00:01:04,240 Speaker 1: That's his His go to game on the on the 17 00:01:04,280 --> 00:01:06,319 Speaker 1: phone is all the Lego games. Those are great, he 18 00:01:06,360 --> 00:01:09,920 Speaker 1: also loves, and that's representative of the bigger trend. No, Eric, 19 00:01:09,959 --> 00:01:13,720 Speaker 1: like the gaming industry has just been its rocket ship. 20 00:01:14,120 --> 00:01:16,479 Speaker 1: What's it look like in the E T F Lanscape? Yes, 21 00:01:16,560 --> 00:01:19,480 Speaker 1: so there's four of them, esp O, which is van 22 00:01:19,560 --> 00:01:23,199 Speaker 1: Eck up this year. Remember this is a year where 23 00:01:23,440 --> 00:01:26,039 Speaker 1: the S and ps up two percent and emerging markets 24 00:01:26,040 --> 00:01:27,640 Speaker 1: are down one percent. A lot of these funds have 25 00:01:27,640 --> 00:01:32,120 Speaker 1: emerging market exposure as well. So is astonishing. Hero is 26 00:01:32,120 --> 00:01:36,600 Speaker 1: the Global X that's um, NERD is round Hill that's up, 27 00:01:37,560 --> 00:01:39,640 Speaker 1: and gamer g A m R is e t F 28 00:01:39,760 --> 00:01:42,959 Speaker 1: MG that's up. So and collectively they have about five 29 00:01:43,840 --> 00:01:47,520 Speaker 1: million dollars maybe six hundred million. To me, that is 30 00:01:47,560 --> 00:01:52,080 Speaker 1: astonishingly low. Given the numbers that I just read off 31 00:01:52,120 --> 00:01:55,720 Speaker 1: to you. They're having a shiny object moment. The numbers 32 00:01:56,280 --> 00:01:59,120 Speaker 1: in the video game industry which will go over are massive. 33 00:01:59,480 --> 00:02:02,360 Speaker 1: They dwore some other areas where them ETFs are, you know, 34 00:02:02,600 --> 00:02:05,520 Speaker 1: multiple billions. So I hope we can get into that, 35 00:02:06,120 --> 00:02:08,800 Speaker 1: not only where the performance coming from, but also why 36 00:02:09,360 --> 00:02:13,000 Speaker 1: there is some hesitancy from advisors to try to ride this. 37 00:02:13,200 --> 00:02:16,000 Speaker 1: Uh there's it's a little bit of a mystery and 38 00:02:16,080 --> 00:02:21,519 Speaker 1: to help us navigate these games. Matt Cantraman, a Bloomberg 39 00:02:21,520 --> 00:02:26,280 Speaker 1: Intelligent analyst, and Will Hershey, who's behind NERD that roundto 40 00:02:26,440 --> 00:02:28,520 Speaker 1: et F you mentioned, are going to be joining us 41 00:02:32,440 --> 00:02:35,840 Speaker 1: this time. I trillions. Welcome to the meta fverse, the 42 00:02:35,880 --> 00:02:40,960 Speaker 1: future of the gaming industry. I want to start really 43 00:02:41,040 --> 00:02:43,440 Speaker 1: just with the nuts and bolts, start with will here. 44 00:02:44,120 --> 00:02:47,560 Speaker 1: You walk into an advisor's office, right, it's a boomer, 45 00:02:48,120 --> 00:02:50,400 Speaker 1: you know, it's like a six year old advisor. He's 46 00:02:50,400 --> 00:02:53,480 Speaker 1: got all these wealthy clients. What do you do to 47 00:02:53,600 --> 00:02:56,519 Speaker 1: pitch him on this industry? What numbers are you throwing 48 00:02:56,560 --> 00:02:59,280 Speaker 1: at him? Well, I first I pull out my Atari 49 00:02:59,360 --> 00:03:01,400 Speaker 1: because that's the only console that he's gonna be able 50 00:03:01,440 --> 00:03:03,960 Speaker 1: to relate to. No um. I think at the at 51 00:03:03,960 --> 00:03:06,519 Speaker 1: the highest level, you look at the overall gaming industries 52 00:03:06,919 --> 00:03:10,600 Speaker 1: revenue figures and you're talking about, call it for last year, 53 00:03:10,600 --> 00:03:13,480 Speaker 1: around a hundred and fifty billion dollars in revenues. That's 54 00:03:13,480 --> 00:03:16,600 Speaker 1: bigger than the global box office and music industries combine. 55 00:03:17,480 --> 00:03:20,240 Speaker 1: And it's a It's an industry that's also growing while 56 00:03:20,280 --> 00:03:24,280 Speaker 1: other forms of entertainment or shrinking. UM So, coming into coronavirus, 57 00:03:24,360 --> 00:03:27,560 Speaker 1: I think you're probably looking at high single digit growth 58 00:03:27,680 --> 00:03:30,079 Speaker 1: rates year over year kind of for the next few years. 59 00:03:30,720 --> 00:03:32,400 Speaker 1: I think what we're seeing now was stay at home. 60 00:03:32,480 --> 00:03:35,520 Speaker 1: You mentioned it in the intro. We're gonna have growth 61 00:03:35,600 --> 00:03:37,560 Speaker 1: rates that are above that for the next few years 62 00:03:37,640 --> 00:03:40,120 Speaker 1: and then the bigger the bigger question here. And I 63 00:03:40,160 --> 00:03:42,760 Speaker 1: believe that gaming is a secular trend, right You're playing 64 00:03:42,800 --> 00:03:45,320 Speaker 1: into the fact that younger people don't want to be 65 00:03:45,360 --> 00:03:48,680 Speaker 1: passive in terms of the way that they engage with entertainment. 66 00:03:48,760 --> 00:03:51,640 Speaker 1: They want to be involved, whether that's social media or 67 00:03:51,720 --> 00:03:55,400 Speaker 1: gaming or watching on Twitch. It's more about being involved. 68 00:03:56,040 --> 00:03:58,920 Speaker 1: And I think I think what we're seeing going on 69 00:03:59,040 --> 00:04:02,040 Speaker 1: right now is is a short term uptick, but that's 70 00:04:02,040 --> 00:04:05,120 Speaker 1: more representative of a long term trend um. And that's 71 00:04:05,200 --> 00:04:07,160 Speaker 1: kind of the high level pitch. I'd make the advisor 72 00:04:07,800 --> 00:04:09,880 Speaker 1: and just real quick, go over the numbers. What's the 73 00:04:09,960 --> 00:04:14,120 Speaker 1: annual revenue and give us something that's in close to 74 00:04:14,200 --> 00:04:17,359 Speaker 1: that for a reference point. You're talking about a hundred 75 00:04:17,360 --> 00:04:20,279 Speaker 1: and fifty billion UM, So there aren't that quite that 76 00:04:20,440 --> 00:04:23,520 Speaker 1: many reference points. I'm trying to think off the top 77 00:04:23,560 --> 00:04:26,799 Speaker 1: of my head, and there's nothing that's like right around 78 00:04:26,839 --> 00:04:29,000 Speaker 1: that size. I think, Erica, you like to point to 79 00:04:29,080 --> 00:04:32,159 Speaker 1: some of the other thematics. It's bigger than some of 80 00:04:32,160 --> 00:04:34,080 Speaker 1: the others that have have garnered way more in terms 81 00:04:34,120 --> 00:04:38,400 Speaker 1: of assets, right, It's bigger than robotics it's bigger than cybersecurity. Yeah, 82 00:04:38,240 --> 00:04:40,599 Speaker 1: that those numbers would be bigger, and then you've got 83 00:04:40,600 --> 00:04:42,719 Speaker 1: the growth rate, and then I guess I would go 84 00:04:42,760 --> 00:04:45,600 Speaker 1: back and just say, how do how do those companies 85 00:04:45,800 --> 00:04:50,440 Speaker 1: produce that revenue? Because are people buying games like they 86 00:04:50,520 --> 00:04:52,919 Speaker 1: used to or they're moving on to more Because I know, 87 00:04:53,080 --> 00:04:56,080 Speaker 1: like with my son, if if I asked him last night, 88 00:04:56,160 --> 00:04:58,800 Speaker 1: if I gave you fifty dollars right now, what would 89 00:04:58,839 --> 00:05:00,880 Speaker 1: you do with it? It's twenty five of it He 90 00:05:01,040 --> 00:05:04,360 Speaker 1: used with for roebucks and he'd buy like stuff to 91 00:05:04,440 --> 00:05:07,000 Speaker 1: make his like avatar look better. He'd do this some 92 00:05:07,400 --> 00:05:11,160 Speaker 1: private server thing. Um, it's all very there's he has 93 00:05:11,160 --> 00:05:13,640 Speaker 1: a whole plan of what he'll do. But that's a 94 00:05:13,640 --> 00:05:15,880 Speaker 1: platform that's free, but he's about to spend money on it. 95 00:05:16,000 --> 00:05:17,880 Speaker 1: So is that the new Are you giving him that money? 96 00:05:17,960 --> 00:05:20,040 Speaker 1: By the way, No, he has to earn it. In fact, 97 00:05:20,120 --> 00:05:23,039 Speaker 1: roebucks are what we do for allowance. Basically there's no 98 00:05:23,080 --> 00:05:26,320 Speaker 1: more dollars. So this is like what we thought was 99 00:05:26,360 --> 00:05:29,000 Speaker 1: gonna happen with crypto. It's just happening in a digital 100 00:05:29,160 --> 00:05:31,960 Speaker 1: in a digital world with with Fortnite's b bucks, with 101 00:05:32,040 --> 00:05:35,280 Speaker 1: roadblocks it's like digital economies are being built within games, 102 00:05:35,320 --> 00:05:37,720 Speaker 1: and we'll see if that shapes out to be kind 103 00:05:37,760 --> 00:05:39,719 Speaker 1: of what everyone kind of wants to call the metaverse 104 00:05:39,880 --> 00:05:42,400 Speaker 1: every where at Neil Stevenson snow Crash. That's kind of 105 00:05:42,400 --> 00:05:45,920 Speaker 1: this concept of our our younger generation is gonna live 106 00:05:45,960 --> 00:05:48,800 Speaker 1: inside these digital worlds. But in terms of what you're 107 00:05:48,839 --> 00:05:51,560 Speaker 1: what you're alluding to, eric Um, it's a shift that 108 00:05:51,600 --> 00:05:53,520 Speaker 1: we've seen in the business model. Right when I was 109 00:05:53,640 --> 00:05:55,719 Speaker 1: when I was growing up, you'd go to the game stop, 110 00:05:55,839 --> 00:05:59,080 Speaker 1: you buy the physical version of the game. You'd go 111 00:05:59,120 --> 00:06:01,320 Speaker 1: home and you play it with friend or brother or 112 00:06:01,680 --> 00:06:04,000 Speaker 1: or your sister or whomever, and that was kind of 113 00:06:04,040 --> 00:06:06,760 Speaker 1: the extent of the engaging with the content. Now what 114 00:06:06,800 --> 00:06:11,240 Speaker 1: we've seen is, via technology and kind of online gaming, 115 00:06:11,240 --> 00:06:15,160 Speaker 1: we're broadly the ability for games companies to deliver new 116 00:06:15,160 --> 00:06:18,760 Speaker 1: and engaging content over the Internet. So, you know what 117 00:06:19,000 --> 00:06:22,400 Speaker 1: that's meant is a shift in the business models one 118 00:06:22,520 --> 00:06:25,400 Speaker 1: to kind of this more games as a service model, 119 00:06:25,400 --> 00:06:29,599 Speaker 1: where games are free to play and are monetized via 120 00:06:29,640 --> 00:06:33,480 Speaker 1: in game monetization. Uh, kind of what we call micro transactions, right, 121 00:06:33,520 --> 00:06:35,760 Speaker 1: buying a new outfit for your character, buying a new 122 00:06:35,880 --> 00:06:39,279 Speaker 1: dance move whatever it might mean, um and and that's 123 00:06:39,360 --> 00:06:42,400 Speaker 1: ultimately meant over the past several years, it's meant multiple 124 00:06:42,480 --> 00:06:45,480 Speaker 1: expansion for a lot of the game publishers, because if 125 00:06:45,520 --> 00:06:48,440 Speaker 1: you're able to deliver content digitally, that can be a 126 00:06:48,480 --> 00:06:51,320 Speaker 1: whole lot more profitable from a margin standpoint than having 127 00:06:51,320 --> 00:06:54,520 Speaker 1: to shift out physical games every time. You know, you're 128 00:06:54,560 --> 00:06:57,600 Speaker 1: trying to put out new content and and taking that 129 00:06:57,760 --> 00:07:00,880 Speaker 1: taking that one step further. What it's also meant is 130 00:07:01,200 --> 00:07:03,760 Speaker 1: intellectual property has never been more valuable than it is 131 00:07:03,920 --> 00:07:06,520 Speaker 1: right now in gaming. People are playing the same games 132 00:07:06,560 --> 00:07:09,920 Speaker 1: now for five ten years, and that's kind of we're 133 00:07:09,920 --> 00:07:12,600 Speaker 1: seeing the development of franchises the same way we've seen 134 00:07:12,640 --> 00:07:16,920 Speaker 1: it in Hollywood and blockbuster movies. Is is i P 135 00:07:17,240 --> 00:07:19,679 Speaker 1: is super super valuable right now because you can continue 136 00:07:19,720 --> 00:07:22,320 Speaker 1: to monetize it again and again, Matt, let's bring you 137 00:07:22,360 --> 00:07:27,600 Speaker 1: in here that i P conversation. The producers of this 138 00:07:27,720 --> 00:07:30,680 Speaker 1: Who are the players that you as an analyst, you're 139 00:07:30,760 --> 00:07:33,960 Speaker 1: you're most interested in watching. One of the big names 140 00:07:33,960 --> 00:07:36,200 Speaker 1: that everyone looks at is Take two because they owned 141 00:07:36,240 --> 00:07:38,640 Speaker 1: rock Star and everyone knows Grand Theft Auto. And to 142 00:07:39,240 --> 00:07:42,800 Speaker 1: further Will's point about comparing to the box office. Basically, 143 00:07:42,800 --> 00:07:46,640 Speaker 1: everybody saw Avengers a game. Most successful movie in the 144 00:07:46,640 --> 00:07:50,160 Speaker 1: box office ever, so grand Theft Auto five cost about 145 00:07:50,320 --> 00:07:54,840 Speaker 1: half to make versus m Avengers end game, and it's 146 00:07:54,840 --> 00:07:58,240 Speaker 1: made more than double lifetime. So to kind of put 147 00:07:58,280 --> 00:08:01,560 Speaker 1: it in perspective, the biggest video games out there are 148 00:08:01,880 --> 00:08:04,800 Speaker 1: much more profitable over time than than any movie that's 149 00:08:04,800 --> 00:08:07,200 Speaker 1: ever been made. And that's and that's mostly because of 150 00:08:07,200 --> 00:08:09,280 Speaker 1: what Will is alluding to the fact that of this 151 00:08:09,360 --> 00:08:12,000 Speaker 1: life services model. So take two, I mean ten Cent, 152 00:08:12,480 --> 00:08:15,800 Speaker 1: the HK listed China company, is the global leader in 153 00:08:15,800 --> 00:08:18,720 Speaker 1: the industry. But if you dig into ten cents weeds 154 00:08:18,720 --> 00:08:22,680 Speaker 1: they have investments in ownership of multiple gaming companies globally. Um, 155 00:08:22,760 --> 00:08:25,480 Speaker 1: they own Riot Games, who makes League of Legends, They 156 00:08:25,560 --> 00:08:28,360 Speaker 1: own Stakes and Activision and ub Saw. So they're they're 157 00:08:28,360 --> 00:08:32,199 Speaker 1: they're they're global electronic arts. Everyone knows for the sports games, 158 00:08:32,440 --> 00:08:35,240 Speaker 1: they don't own that intellectual property, but they've built up 159 00:08:35,280 --> 00:08:39,800 Speaker 1: these these licenses that are almost impenetrable by by competition. 160 00:08:39,880 --> 00:08:42,800 Speaker 1: So they have the factor monopolies in the sports arena 161 00:08:42,840 --> 00:08:45,640 Speaker 1: where they where they where they compete the best, uh, 162 00:08:45,679 --> 00:08:47,319 Speaker 1: you know, And then you also look at companies I 163 00:08:47,360 --> 00:08:49,560 Speaker 1: mentioned us off. They have some great I P but 164 00:08:49,679 --> 00:08:51,760 Speaker 1: all of the biggest companies that are in the easy 165 00:08:51,840 --> 00:08:54,120 Speaker 1: t F indusees you know, like Wills, like like the 166 00:08:54,240 --> 00:08:56,960 Speaker 1: like the nerd to et F. These are the industry 167 00:08:57,040 --> 00:09:00,000 Speaker 1: leaders and the value does come from the intellectual property 168 00:09:00,040 --> 00:09:03,760 Speaker 1: for sure. I also want to bring up these two 169 00:09:03,800 --> 00:09:06,280 Speaker 1: companies that have been you know, hitted in like a 170 00:09:06,360 --> 00:09:10,520 Speaker 1: decades long rivalry and there this rivalry is about to 171 00:09:10,600 --> 00:09:13,280 Speaker 1: continue again with a kind of a new chapter. And 172 00:09:13,320 --> 00:09:17,800 Speaker 1: that's Sony and Microsoft, right, who are known for consoles, right, 173 00:09:17,880 --> 00:09:19,440 Speaker 1: And you know, I think that's one of the things 174 00:09:19,440 --> 00:09:22,360 Speaker 1: that's really been interesting with gaming is obviously everybody's got smartphones, 175 00:09:22,360 --> 00:09:25,520 Speaker 1: you've got games on all those, but the consoles remains 176 00:09:25,600 --> 00:09:29,880 Speaker 1: sort of the heartbeat of the gaming industry. And both 177 00:09:29,880 --> 00:09:32,360 Speaker 1: of them are about to bring out new consoles by 178 00:09:32,360 --> 00:09:33,880 Speaker 1: the end of the year. What what's that going to 179 00:09:33,960 --> 00:09:37,040 Speaker 1: do to the business. It's an exciting time to be 180 00:09:37,120 --> 00:09:40,000 Speaker 1: a gamer. Is just an amazing year. You have the 181 00:09:40,040 --> 00:09:44,360 Speaker 1: new consoles, as you mentioned, cloud gaming is starting to emerge, um, 182 00:09:44,440 --> 00:09:47,800 Speaker 1: and then you factor in the COVID boost. But for sure, um, 183 00:09:47,840 --> 00:09:50,360 Speaker 1: you know I I I personally have been an Xbox 184 00:09:50,440 --> 00:09:53,880 Speaker 1: owner my whole life. UM, I plan on buying both. Um, 185 00:09:54,760 --> 00:09:57,200 Speaker 1: I will be I will be that that weird nerd 186 00:09:57,320 --> 00:10:00,120 Speaker 1: that that buys both this time around. Look at it 187 00:10:00,160 --> 00:10:02,480 Speaker 1: at the end of the day. UM, you know, if 188 00:10:02,480 --> 00:10:04,120 Speaker 1: we wanted the clock back a little bit. When we 189 00:10:04,120 --> 00:10:06,959 Speaker 1: had the seventh generation cycles that consoles that was the 190 00:10:07,080 --> 00:10:10,320 Speaker 1: Xbox three sixty and the p S three, Microsoft and 191 00:10:10,360 --> 00:10:13,439 Speaker 1: Sony basically were fifty fifty. They basically sold the same 192 00:10:13,520 --> 00:10:16,240 Speaker 1: number of consoles. But then in the most recent generation 193 00:10:16,320 --> 00:10:18,719 Speaker 1: that was started in with the PS four and the 194 00:10:18,880 --> 00:10:22,040 Speaker 1: Xbox One, Sony has outsold Microsoft more than two to one, 195 00:10:22,440 --> 00:10:25,120 Speaker 1: and the main driver of that has been their exclusive content. 196 00:10:25,280 --> 00:10:28,000 Speaker 1: They're they're self developed games that they make as well 197 00:10:28,040 --> 00:10:31,040 Speaker 1: as third party games they get exclusive distribution for. Sony 198 00:10:31,120 --> 00:10:34,600 Speaker 1: realized that was going to be their competitive advantage over Microsoft. 199 00:10:35,240 --> 00:10:37,960 Speaker 1: Microsoft tried to be a home entertainment platform and it 200 00:10:38,040 --> 00:10:40,440 Speaker 1: didn't didn't resonate, and they didn't have the games to 201 00:10:40,440 --> 00:10:43,679 Speaker 1: back up the platform, and that's what led to Sony dominating. 202 00:10:43,880 --> 00:10:45,760 Speaker 1: So Microsoft has made a lot of moves in the 203 00:10:45,800 --> 00:10:48,679 Speaker 1: last couple of years. They've they've doubled their studio account 204 00:10:48,720 --> 00:10:52,080 Speaker 1: to over ten now. Um. But with acquisitions of smaller 205 00:10:52,120 --> 00:10:55,960 Speaker 1: studios to bolster their content. They're also really pushing subscriptions. 206 00:10:55,960 --> 00:10:59,040 Speaker 1: They have their Xbox game Pass subscription service which has 207 00:10:59,120 --> 00:11:01,839 Speaker 1: tons of has over two hundred games in there. I 208 00:11:01,880 --> 00:11:05,400 Speaker 1: literally haven't been using it NonStop, um you know, during 209 00:11:05,440 --> 00:11:08,240 Speaker 1: the during the lockdowns. Don't tell my boss, but um, 210 00:11:08,320 --> 00:11:10,600 Speaker 1: you know, uh you know, we've been uh, you know, 211 00:11:10,640 --> 00:11:13,120 Speaker 1: playing lots of games there. They've over ten million subscribers 212 00:11:13,120 --> 00:11:15,440 Speaker 1: in there now and now with cloud gaming, they're gonna 213 00:11:15,480 --> 00:11:18,120 Speaker 1: bundle their cloud gaming right into those subscriptions, so it 214 00:11:18,120 --> 00:11:21,000 Speaker 1: won't be any additional costs to the users. So, um, 215 00:11:21,040 --> 00:11:24,840 Speaker 1: Microsoft is taking a different route to differentiate itself. You know, 216 00:11:24,880 --> 00:11:26,840 Speaker 1: the Xbox, the new console, is going to be the 217 00:11:26,840 --> 00:11:30,040 Speaker 1: most powerful box, but they're also giving you other ways 218 00:11:30,080 --> 00:11:33,280 Speaker 1: to to to interact with their services and their games. 219 00:11:33,559 --> 00:11:35,559 Speaker 1: And at the end of the day, as Will mentioned this, 220 00:11:35,640 --> 00:11:38,480 Speaker 1: games as the service models all about engaged and they 221 00:11:38,480 --> 00:11:40,880 Speaker 1: don't care where they get that engagement from, whether it's 222 00:11:40,920 --> 00:11:43,040 Speaker 1: their game or someone else's game, whether you're playing on 223 00:11:43,040 --> 00:11:45,559 Speaker 1: a phone, a console, or a PC. They just want 224 00:11:45,679 --> 00:11:47,760 Speaker 1: you in their ecosystem. And and this has been a 225 00:11:47,800 --> 00:11:50,959 Speaker 1: big culture shift for Microsoft in the last few years, 226 00:11:51,200 --> 00:11:53,480 Speaker 1: not just in gaming, I mean their entire business has 227 00:11:53,480 --> 00:11:56,560 Speaker 1: gone from being a closed ecosystem to an open cloud architecture, 228 00:11:56,840 --> 00:12:00,200 Speaker 1: and their gaming businesses now it's following that. Now. I 229 00:12:00,240 --> 00:12:03,560 Speaker 1: will just add that we in the US and in 230 00:12:03,600 --> 00:12:06,320 Speaker 1: the West love to talk about console gaming because there's 231 00:12:06,320 --> 00:12:09,400 Speaker 1: a very high console penetration rate. People grew up with 232 00:12:09,440 --> 00:12:13,160 Speaker 1: a Super Nintendo. Um, if you look across the globe, 233 00:12:13,720 --> 00:12:16,640 Speaker 1: I really see the biggest opportunity in mobile because what's 234 00:12:16,679 --> 00:12:20,000 Speaker 1: going on right now is smartphone technology has gotten so 235 00:12:20,040 --> 00:12:23,559 Speaker 1: good that you can play the best video games in 236 00:12:23,600 --> 00:12:24,960 Speaker 1: the world if you want to call them triple A 237 00:12:25,040 --> 00:12:31,000 Speaker 1: video games on iPhone, fives on Android, potatoes, whatever, whatever 238 00:12:31,040 --> 00:12:34,240 Speaker 1: you want to call them. Um, what that's really done 239 00:12:34,400 --> 00:12:36,640 Speaker 1: is two things that's made games even more global than 240 00:12:36,679 --> 00:12:40,000 Speaker 1: they already were, and in doing so, has really unlocked 241 00:12:40,000 --> 00:12:43,320 Speaker 1: emerging markets. And I look at Latin America and Southeast 242 00:12:43,360 --> 00:12:45,800 Speaker 1: Asia is really kind of the two most exciting growth 243 00:12:45,840 --> 00:12:48,400 Speaker 1: areas for the gaming industry going forward, and it's all 244 00:12:48,440 --> 00:12:52,520 Speaker 1: about introducing new gamers who never had had a Supernintendo 245 00:12:52,600 --> 00:12:56,120 Speaker 1: growing up, that are now getting introduced via smartphones and 246 00:12:56,240 --> 00:12:57,880 Speaker 1: to the best games in the world. I think that's 247 00:12:57,880 --> 00:13:00,560 Speaker 1: a really important point that's going on right now. Okay, 248 00:13:00,559 --> 00:13:04,040 Speaker 1: so now comes the most important question that I'm gonna 249 00:13:04,040 --> 00:13:07,720 Speaker 1: asking the whole interview. How much view game on a 250 00:13:07,760 --> 00:13:10,120 Speaker 1: day to day basis, like twenty four hours in a day. 251 00:13:10,640 --> 00:13:15,560 Speaker 1: How much do you dedicate to gaming? Um, I haven't been. 252 00:13:15,600 --> 00:13:19,120 Speaker 1: I haven't been gaming recently, but I would say I 253 00:13:19,120 --> 00:13:21,360 Speaker 1: don't know, maybe a half hour. Like it's it's great 254 00:13:21,400 --> 00:13:24,000 Speaker 1: because nowadays you can, you know, you can just jump 255 00:13:24,040 --> 00:13:27,079 Speaker 1: into a game, play one play one round or match, 256 00:13:27,160 --> 00:13:29,240 Speaker 1: and then and then kind of sign off and do that, 257 00:13:29,400 --> 00:13:32,360 Speaker 1: you know, whenever you want. Well, that's just that's that's 258 00:13:32,400 --> 00:13:36,640 Speaker 1: just that's disappointing. That's disappointing. I mean, I'm a solid 259 00:13:36,720 --> 00:13:41,120 Speaker 1: four hours a day or so easily. Um, I wake 260 00:13:41,200 --> 00:13:42,960 Speaker 1: up early in the morning just so I can play 261 00:13:43,080 --> 00:13:45,200 Speaker 1: video games during lockdown. You know, I normally am a 262 00:13:45,280 --> 00:13:47,240 Speaker 1: wake up early, go to the gym, go to work person. 263 00:13:47,280 --> 00:13:49,520 Speaker 1: But there's no going to work, so and it's very 264 00:13:49,559 --> 00:13:51,400 Speaker 1: easy just to sit in front of the TV when 265 00:13:51,400 --> 00:13:53,599 Speaker 1: you're home and play. So my wife and I we 266 00:13:53,679 --> 00:13:55,880 Speaker 1: beat Overcooked two. That's a great game to play as 267 00:13:55,880 --> 00:13:58,520 Speaker 1: a couple. Really works in your communication skills. And if 268 00:13:58,520 --> 00:14:01,000 Speaker 1: you survive that game without ripping other's throats out, that 269 00:14:01,120 --> 00:14:04,400 Speaker 1: that's a huge accomplishment. I've beaten fours of Horizon four, 270 00:14:04,480 --> 00:14:06,719 Speaker 1: which is this huge open world racing game. That's what 271 00:14:06,760 --> 00:14:09,199 Speaker 1: I've been playing recently. But I played through the entire 272 00:14:09,280 --> 00:14:11,320 Speaker 1: Halo collection because the new Halo is coming out at 273 00:14:11,360 --> 00:14:12,600 Speaker 1: the end of the year, so I was like, I 274 00:14:12,600 --> 00:14:14,320 Speaker 1: gotta play all the games again and get ready for 275 00:14:14,320 --> 00:14:16,480 Speaker 1: the new game. So I've been playing everything that I 276 00:14:16,480 --> 00:14:17,839 Speaker 1: can get my hands on. But it's all in the 277 00:14:17,880 --> 00:14:20,000 Speaker 1: subscription service that I told you about, so it's like, 278 00:14:20,480 --> 00:14:22,120 Speaker 1: you know, it's already paid for, it's just there. I's 279 00:14:22,160 --> 00:14:24,560 Speaker 1: gotta play it, so it's it's fantastic. But now I've 280 00:14:24,560 --> 00:14:27,320 Speaker 1: definitely been playing more since the lockdowns, and you know 281 00:14:27,480 --> 00:14:29,960 Speaker 1: our our estimates that we've published on the terminal on 282 00:14:30,040 --> 00:14:32,560 Speaker 1: b I Go, I always have to throw the plug. Um. 283 00:14:32,600 --> 00:14:34,560 Speaker 1: You know, we've looked at the user base expanding about 284 00:14:34,600 --> 00:14:37,720 Speaker 1: thirty globally for gamers since since the startup lockdowns in 285 00:14:37,760 --> 00:14:40,960 Speaker 1: mid March. UM revenue is up, you know, the growth rate. 286 00:14:41,000 --> 00:14:43,160 Speaker 1: Will was talking about a high single digit paces like 287 00:14:43,200 --> 00:14:45,600 Speaker 1: the long term trend, but we're about ten to twenty 288 00:14:45,600 --> 00:14:49,360 Speaker 1: points higher than that during this period. Um, and looking 289 00:14:49,400 --> 00:14:51,120 Speaker 1: at the US, you know, looking at the U S 290 00:14:51,160 --> 00:14:54,640 Speaker 1: mobile market for example, grew in the second quarter. So 291 00:14:54,640 --> 00:14:58,160 Speaker 1: so the numbers are pretty huge right now, just go 292 00:14:58,280 --> 00:15:00,640 Speaker 1: to the numbers how many people game out of in 293 00:15:00,680 --> 00:15:03,000 Speaker 1: the world, if is there some kind of way to 294 00:15:03,080 --> 00:15:05,520 Speaker 1: estimate that or what percentage of people. I mean, the 295 00:15:05,600 --> 00:15:08,080 Speaker 1: numbers you here thrown around are somewhere around two and 296 00:15:08,080 --> 00:15:13,320 Speaker 1: a half billion. Now that includes uh, definitely includes mobile, right, 297 00:15:13,400 --> 00:15:16,320 Speaker 1: and it definitely includes also kind of what I would 298 00:15:16,360 --> 00:15:20,000 Speaker 1: call casual or hyper casual mobile, right, which is candy 299 00:15:20,040 --> 00:15:23,520 Speaker 1: crush mores with friends, those countless games in that calculation. 300 00:15:23,600 --> 00:15:26,320 Speaker 1: But I mean over two billions the big number, no 301 00:15:26,400 --> 00:15:29,720 Speaker 1: matter how you want to slice it. If you're talking 302 00:15:29,880 --> 00:15:32,880 Speaker 1: hardcore gamers like the guys like me that are that 303 00:15:32,920 --> 00:15:35,480 Speaker 1: play multiple hours a day, it's still in the hundreds 304 00:15:35,480 --> 00:15:38,240 Speaker 1: of millions globally for sure. Um, when you add up 305 00:15:38,240 --> 00:15:41,280 Speaker 1: console PC and the hardcore mobile players. I mean in China, 306 00:15:41,360 --> 00:15:44,440 Speaker 1: there's lots of hardcore mobile players because you know, that's 307 00:15:44,440 --> 00:15:53,400 Speaker 1: where all the game development is. Most of these video 308 00:15:53,440 --> 00:15:56,760 Speaker 1: game ETFs have a good amount of exposure in Asia. 309 00:15:56,840 --> 00:16:01,120 Speaker 1: In fact, Asia's typically the predominant area US might be 310 00:16:02,200 --> 00:16:05,320 Speaker 1: typically um, there's one company in there that is at 311 00:16:05,360 --> 00:16:07,880 Speaker 1: the top of a lot of these and I gotta 312 00:16:08,320 --> 00:16:09,600 Speaker 1: I see it all the time as an E t 313 00:16:09,720 --> 00:16:11,360 Speaker 1: F analysts, But again I'm an E t F anists, 314 00:16:11,360 --> 00:16:14,240 Speaker 1: So don't dig into the companies which just ten Cent UM. 315 00:16:14,280 --> 00:16:17,120 Speaker 1: You know, they're also in cloud computing ETFs, they're obviously 316 00:16:17,120 --> 00:16:19,960 Speaker 1: in emerging markets in China. E t F s UM 317 00:16:20,120 --> 00:16:23,480 Speaker 1: will talk to me about why it's in there, how 318 00:16:23,560 --> 00:16:26,240 Speaker 1: much of their revenue actually comes from gaming, and like 319 00:16:26,280 --> 00:16:29,880 Speaker 1: who's running ten Cent are they? Why are they so good? 320 00:16:29,920 --> 00:16:32,480 Speaker 1: Like they seem to just keep rising in the ranks 321 00:16:32,520 --> 00:16:36,640 Speaker 1: of these ETFs UM and they're they're everywhere. Now, yeah, 322 00:16:36,680 --> 00:16:39,000 Speaker 1: I mean at a higher level, ten Cent is I 323 00:16:39,040 --> 00:16:42,080 Speaker 1: think just past Ali Baba as the biggest company in 324 00:16:42,160 --> 00:16:44,480 Speaker 1: China on a market cap basis. So it is a behemoth. 325 00:16:44,520 --> 00:16:47,520 Speaker 1: It is an Internet giant that just so happens to 326 00:16:47,640 --> 00:16:50,920 Speaker 1: have kind of really built an empire focused around gaming. 327 00:16:50,920 --> 00:16:53,680 Speaker 1: And I think China is it kind of a unique 328 00:16:53,680 --> 00:16:56,200 Speaker 1: market where they were able to start and gaming as 329 00:16:56,240 --> 00:16:58,440 Speaker 1: kind of the core of their business and expand from there. 330 00:16:58,800 --> 00:17:01,240 Speaker 1: In the US, you're kind of seeing large tech get 331 00:17:01,280 --> 00:17:03,640 Speaker 1: into gaming a little bit later. UM. But in terms 332 00:17:03,680 --> 00:17:05,480 Speaker 1: of Tencent, I like to call them like a mini 333 00:17:05,600 --> 00:17:08,679 Speaker 1: gaming and esports et f on their own because of 334 00:17:08,720 --> 00:17:12,159 Speaker 1: how many h great investments they've made into the space 335 00:17:12,200 --> 00:17:16,360 Speaker 1: and how many companies under like subsidiary companies within their 336 00:17:16,400 --> 00:17:19,000 Speaker 1: portfolio that they have that are doing really compressive things. 337 00:17:19,040 --> 00:17:22,600 Speaker 1: To give you a few examples, UM, Tencent bought Riot Games, 338 00:17:22,600 --> 00:17:25,000 Speaker 1: which is League of Legends, probably the biggest e sport 339 00:17:25,040 --> 00:17:28,440 Speaker 1: in the world. They bought that, um a few years back. 340 00:17:28,480 --> 00:17:32,159 Speaker 1: They also owned around Epic Games, which is Fortnite. They 341 00:17:32,200 --> 00:17:34,480 Speaker 1: own super Cell which is Clash of Clans, a big 342 00:17:34,560 --> 00:17:38,080 Speaker 1: mobile e sports, so they've really built like the premier. 343 00:17:38,200 --> 00:17:40,399 Speaker 1: They also owned five percent of Activision Blizzard and a 344 00:17:40,400 --> 00:17:43,600 Speaker 1: few percent in Ubisa, so they're they've really built just 345 00:17:43,680 --> 00:17:48,159 Speaker 1: kind of a tremendous portfolio of underlying um underlying companies 346 00:17:48,160 --> 00:17:49,840 Speaker 1: that are doing things in the games industry on the 347 00:17:49,880 --> 00:17:52,720 Speaker 1: on the game development side. They also have stakes in 348 00:17:52,720 --> 00:17:55,600 Speaker 1: in a few Chinese game streaming platforms that have been 349 00:17:55,600 --> 00:17:58,119 Speaker 1: great investments for them as well. So they've done a 350 00:17:58,160 --> 00:18:01,119 Speaker 1: ton in terms of investing capital all and I almost 351 00:18:01,119 --> 00:18:03,159 Speaker 1: look at them as like a Berkshire Hathaway East if 352 00:18:03,200 --> 00:18:05,880 Speaker 1: you will, if you look at how many public companies 353 00:18:05,960 --> 00:18:08,359 Speaker 1: are companies they've had public and their portfolio and how 354 00:18:08,359 --> 00:18:10,639 Speaker 1: well they've gone. And Matt, let me just follow up 355 00:18:10,640 --> 00:18:12,760 Speaker 1: with that. You know, we'll just said the sports a 356 00:18:12,760 --> 00:18:15,920 Speaker 1: couple of times. Um, just define this and like, what 357 00:18:16,320 --> 00:18:20,240 Speaker 1: section of this whole revenue pie is e sports? And 358 00:18:20,280 --> 00:18:22,600 Speaker 1: I will anecdotally tell you. I asked my nine year 359 00:18:22,640 --> 00:18:26,560 Speaker 1: old last night, what would you rather do? Go to 360 00:18:26,600 --> 00:18:30,200 Speaker 1: go to an Eagles game right from I'm from Philly, 361 00:18:30,359 --> 00:18:35,119 Speaker 1: or watch a bunch of guys play roadblocks? And my heartbro, 362 00:18:36,560 --> 00:18:39,400 Speaker 1: he picked, he picked watched people play roadblocks. I'm like, 363 00:18:40,160 --> 00:18:42,640 Speaker 1: that just makes no sense to me because when I 364 00:18:42,680 --> 00:18:45,680 Speaker 1: was in the eighties, Yeah, you'd stand around the pac 365 00:18:45,760 --> 00:18:47,959 Speaker 1: Man game if some guy was on fire. But I 366 00:18:48,000 --> 00:18:50,719 Speaker 1: wasn't gonna go and watch. I was more interested in 367 00:18:50,760 --> 00:18:54,320 Speaker 1: actual sports. Um, are real sports gonna fade away? And 368 00:18:54,359 --> 00:18:56,320 Speaker 1: the sports kind of like take over? Is that what 369 00:18:56,400 --> 00:18:58,720 Speaker 1: we're looking at here? I don't. I don't think it 370 00:18:58,800 --> 00:19:02,199 Speaker 1: will fade away, just a it's just an additional, you know, 371 00:19:02,280 --> 00:19:05,640 Speaker 1: differentiated offering. Look, I mean the sports too, there's lots 372 00:19:05,640 --> 00:19:07,960 Speaker 1: of ways to measure it and once you count as 373 00:19:08,040 --> 00:19:10,440 Speaker 1: E sports. But it's it's a couple of billion dollars 374 00:19:10,480 --> 00:19:12,399 Speaker 1: on top of the numbers that will and I've already 375 00:19:12,400 --> 00:19:15,199 Speaker 1: been discussing, it's in addition to that, most of that 376 00:19:15,280 --> 00:19:18,520 Speaker 1: comes from from media rights and selling the rights for 377 00:19:18,640 --> 00:19:21,240 Speaker 1: like streaming on the internet or even on TV. Uh. 378 00:19:21,280 --> 00:19:23,639 Speaker 1: You know. Speaking of Philly, you know the Overwatch League 379 00:19:23,640 --> 00:19:25,720 Speaker 1: that's one of activisions leagues. They had the finals in 380 00:19:25,800 --> 00:19:28,639 Speaker 1: Philly last year. Um. You know, Comcast has been a 381 00:19:28,640 --> 00:19:31,640 Speaker 1: big supporter of that. They own one of the franchises, um, 382 00:19:31,680 --> 00:19:33,720 Speaker 1: you know, and then they have they're building a stadium 383 00:19:33,720 --> 00:19:36,080 Speaker 1: in Philly and E sports Arena, so, um, you know, 384 00:19:36,119 --> 00:19:37,960 Speaker 1: a lot, a lot of investment is going into E 385 00:19:38,040 --> 00:19:40,359 Speaker 1: sports and you know, at the end of the day, 386 00:19:40,920 --> 00:19:44,080 Speaker 1: you know, for the large video game publishers, E sports 387 00:19:44,160 --> 00:19:46,240 Speaker 1: is going to be very incremental in terms of the 388 00:19:46,520 --> 00:19:49,720 Speaker 1: profit contribution. Like it's basically break even for Activision at 389 00:19:49,720 --> 00:19:53,439 Speaker 1: this point. But what it does, it's it's much higher 390 00:19:53,520 --> 00:19:56,000 Speaker 1: return on your marketing spect because if you're gonna go 391 00:19:56,040 --> 00:19:59,160 Speaker 1: out there and promote your game as a competitive game, 392 00:19:59,240 --> 00:20:01,719 Speaker 1: anyone can get this good and rise to these ranks. 393 00:20:02,000 --> 00:20:04,760 Speaker 1: It's a great more direct way to bring more people 394 00:20:04,800 --> 00:20:07,640 Speaker 1: into your ECO system. Sell more copies of your game, 395 00:20:07,760 --> 00:20:12,040 Speaker 1: generate more engagement with more players. So for them, you know, 396 00:20:12,119 --> 00:20:14,760 Speaker 1: even if they break even on actually running sports league, 397 00:20:14,960 --> 00:20:17,000 Speaker 1: they benefit just because more people play their games. Weren't 398 00:20:17,000 --> 00:20:20,400 Speaker 1: people spend money in their games? Now? I would say, 399 00:20:20,520 --> 00:20:22,600 Speaker 1: I, I I know what kind of you're you're talking about, 400 00:20:22,640 --> 00:20:25,520 Speaker 1: Which is this one two billion dollar sports industry? Where 401 00:20:25,560 --> 00:20:27,760 Speaker 1: I look at it, it's around forty five to fifty five. 402 00:20:28,160 --> 00:20:30,840 Speaker 1: And and in doing so, I'm really counting the games 403 00:20:30,880 --> 00:20:32,960 Speaker 1: that are predominant E sports. Let's call it a League 404 00:20:32,960 --> 00:20:36,879 Speaker 1: of Legends or a counter strike. The revenues that those games, 405 00:20:36,880 --> 00:20:40,040 Speaker 1: which are really in my mind been driven by competitive 406 00:20:40,040 --> 00:20:42,680 Speaker 1: play and people watching other people play, if we count 407 00:20:42,720 --> 00:20:46,320 Speaker 1: those as E sports revenues totally different. Um. I think 408 00:20:46,359 --> 00:20:48,760 Speaker 1: what Matt referring to is kind of these these in 409 00:20:48,840 --> 00:20:51,760 Speaker 1: person events that look and feel like traditional sports, and 410 00:20:51,600 --> 00:20:53,800 Speaker 1: and and the meteorites off of those which are certain 411 00:20:53,840 --> 00:20:56,200 Speaker 1: to get sizeable in certain cases, but that's not quite 412 00:20:56,280 --> 00:21:00,000 Speaker 1: there yet. Or to answer your question, are sports going away? Um? 413 00:21:00,040 --> 00:21:02,399 Speaker 1: We recently launched a product that's kind of more focused 414 00:21:02,440 --> 00:21:05,159 Speaker 1: on the traditional sports side. So my personal belief is no, 415 00:21:05,960 --> 00:21:10,760 Speaker 1: But I do think you could see certain sports I'm 416 00:21:10,800 --> 00:21:13,760 Speaker 1: looking at you, like the MLB in particular, that deals with, 417 00:21:14,040 --> 00:21:16,520 Speaker 1: you know, a very high average age of its fan 418 00:21:16,600 --> 00:21:19,520 Speaker 1: base that just as kind of phase out and goes 419 00:21:19,560 --> 00:21:22,520 Speaker 1: the way of boxing or horse racing, just from a 420 00:21:22,600 --> 00:21:25,400 Speaker 1: demographic standpoint, and that I could see kind of baseball 421 00:21:25,440 --> 00:21:27,600 Speaker 1: being replaced if it doesn't figure out a way to 422 00:21:27,640 --> 00:21:29,119 Speaker 1: kind of speed up the game and make it more 423 00:21:29,160 --> 00:21:33,240 Speaker 1: engaging and exciting. Totally agree, But I've stopped baseball for 424 00:21:33,280 --> 00:21:35,200 Speaker 1: the most part. I was just gonna say, if you 425 00:21:35,200 --> 00:21:37,280 Speaker 1: look at the NBA, the n B A is a 426 00:21:37,520 --> 00:21:40,680 Speaker 1: is a joint venture partner in the NBA two K League, 427 00:21:40,720 --> 00:21:43,200 Speaker 1: which is the sports league based on Take two his 428 00:21:43,280 --> 00:21:46,000 Speaker 1: video game two K NBA two K. So the NBA 429 00:21:46,119 --> 00:21:48,240 Speaker 1: is all in on the sports they get it. Um. 430 00:21:48,280 --> 00:21:50,560 Speaker 1: I agree with Will you know, especially during lockdowns, you 431 00:21:50,560 --> 00:21:53,960 Speaker 1: saw MLB players streaming MLB the Show on Twitch all 432 00:21:53,960 --> 00:21:56,400 Speaker 1: the time. Tommy Kinley, who's a picture for the Yankees, 433 00:21:56,640 --> 00:21:59,639 Speaker 1: who's a absolute psycho. He was amazing to watch on 434 00:22:00,080 --> 00:22:01,560 Speaker 1: I would wake up early in the morning just to 435 00:22:01,600 --> 00:22:05,200 Speaker 1: watch him. Um, and I'm super pumped for baseball way back. 436 00:22:05,240 --> 00:22:07,200 Speaker 1: I'm a huge baseball fan, and the Yankees are gonna 437 00:22:07,359 --> 00:22:10,440 Speaker 1: you know, just the evil umpires back. Let's go Yankees. 438 00:22:10,480 --> 00:22:15,040 Speaker 1: But the more that professional league see value in supporting 439 00:22:15,040 --> 00:22:17,840 Speaker 1: an e sports league to complement what they're doing, it 440 00:22:17,960 --> 00:22:21,320 Speaker 1: brings in the younger generation who is kind of disenfranchised 441 00:22:21,320 --> 00:22:23,640 Speaker 1: with sitting around and watching a football game for four 442 00:22:23,680 --> 00:22:26,760 Speaker 1: hours a day. What we're seeing going on right now 443 00:22:26,800 --> 00:22:30,359 Speaker 1: with no traditional sports now hopefully that all changes Thursday 444 00:22:30,400 --> 00:22:34,080 Speaker 1: and we continue on with the schedule, is a unique 445 00:22:34,480 --> 00:22:39,720 Speaker 1: amount of attention being paid to sports simulation e sports. 446 00:22:39,800 --> 00:22:42,280 Speaker 1: So Matt Matt talks about the NBA two K League 447 00:22:42,359 --> 00:22:45,480 Speaker 1: or or Matt and or MLB the show. These these 448 00:22:45,520 --> 00:22:50,200 Speaker 1: games that are meant to simulate traditional sports in normal environment. 449 00:22:50,359 --> 00:22:52,919 Speaker 1: Those aren't that Those aren't the games that people are 450 00:22:52,960 --> 00:22:54,800 Speaker 1: you know, tons of people are watching. I think a 451 00:22:54,800 --> 00:22:56,800 Speaker 1: lot of people think that they hear the sports. They 452 00:22:56,800 --> 00:22:59,520 Speaker 1: think it's like, you know, it's people playing virtual football. 453 00:23:00,119 --> 00:23:04,000 Speaker 1: Really not. And I think the the fantasy games, if 454 00:23:04,040 --> 00:23:06,960 Speaker 1: you will, or or shooting games, things that you can't 455 00:23:07,000 --> 00:23:10,080 Speaker 1: replicate in real life, um are the ones that really 456 00:23:10,119 --> 00:23:13,520 Speaker 1: attract people's attention. It's kind of this more of more 457 00:23:13,520 --> 00:23:15,800 Speaker 1: of even more of an escape then I think you 458 00:23:15,920 --> 00:23:18,480 Speaker 1: get from the kind of sports sem title. Okay, well, 459 00:23:18,520 --> 00:23:20,200 Speaker 1: I want to bring it back to the the e 460 00:23:20,359 --> 00:23:23,600 Speaker 1: t F right, because as we mentioned at the top, 461 00:23:23,640 --> 00:23:26,760 Speaker 1: there's sort of four gaming e t F s. You're 462 00:23:26,840 --> 00:23:30,919 Speaker 1: behind NERD, but you've got gamer Hero esp O. What 463 00:23:31,040 --> 00:23:35,160 Speaker 1: distinguishes the products from one another and and specifically NERD 464 00:23:35,240 --> 00:23:38,439 Speaker 1: from the competitive set? Yeah, I mean, I think if 465 00:23:38,440 --> 00:23:40,760 Speaker 1: you look across the board, they've all performed rather well, 466 00:23:40,840 --> 00:23:43,680 Speaker 1: So there's kind of a correlation there which you would 467 00:23:43,680 --> 00:23:46,600 Speaker 1: expect um for us. Really, we try and take a 468 00:23:46,720 --> 00:23:49,320 Speaker 1: kind of a pure play approach to all the products 469 00:23:49,320 --> 00:23:51,440 Speaker 1: that we're gonna put out in terms of thematic equity. 470 00:23:51,560 --> 00:23:54,960 Speaker 1: So you can imagine a scenario where you know, you 471 00:23:55,000 --> 00:23:57,880 Speaker 1: have a Microsoft or a Sony that we talked about 472 00:23:57,920 --> 00:24:00,600 Speaker 1: included in ETF like this, Well, they don't really generate 473 00:24:00,640 --> 00:24:03,440 Speaker 1: a whole lot of revenues from their gaming segment relative 474 00:24:03,480 --> 00:24:06,000 Speaker 1: to the overall business. We do two things. One, we 475 00:24:06,040 --> 00:24:08,480 Speaker 1: try and identify companies that are really really kind of 476 00:24:08,520 --> 00:24:10,880 Speaker 1: tied to this theme of e sports and game streaming 477 00:24:11,280 --> 00:24:14,639 Speaker 1: and to assign a higher weight to those companies, And 478 00:24:14,680 --> 00:24:16,800 Speaker 1: we kind of have a tiered methodology that helps get 479 00:24:16,920 --> 00:24:18,600 Speaker 1: us to kind of what we believe is a really 480 00:24:18,720 --> 00:24:21,600 Speaker 1: unique place, not waiting based on market cap, but rather 481 00:24:22,119 --> 00:24:25,040 Speaker 1: kind of this pure play exposure concept and what it's 482 00:24:25,080 --> 00:24:28,200 Speaker 1: meant for us kind of UM, year today is is 483 00:24:28,240 --> 00:24:31,680 Speaker 1: some of our biggest holdings, Um, maybe our underweights are 484 00:24:31,680 --> 00:24:33,399 Speaker 1: not even including some of the other e T s 485 00:24:33,440 --> 00:24:36,879 Speaker 1: like the Chinese game streaming platforms for example. So on 486 00:24:37,040 --> 00:24:39,320 Speaker 1: other follow up I have for this is, you know, 487 00:24:39,440 --> 00:24:41,840 Speaker 1: if we talk about the numbers, like we've talked about 488 00:24:42,960 --> 00:24:46,040 Speaker 1: the ETF has barely been a year now, what took 489 00:24:46,080 --> 00:24:51,000 Speaker 1: so long? Um? You know, I I'm quite I'm surprised 490 00:24:51,000 --> 00:24:52,879 Speaker 1: as well. And I think that you know, we launched 491 00:24:52,880 --> 00:24:54,640 Speaker 1: it for a reason, right, We thought there was there 492 00:24:54,680 --> 00:24:57,640 Speaker 1: was a huge, huge opportunity here. Um. But I think 493 00:24:57,640 --> 00:25:00,320 Speaker 1: it still comes back to this concept of now we're 494 00:25:00,359 --> 00:25:02,720 Speaker 1: doing things differently. I think we're marketing to a younger audience. 495 00:25:02,720 --> 00:25:04,600 Speaker 1: We're we're kind of taking a different approach and et 496 00:25:04,720 --> 00:25:08,520 Speaker 1: F distribution. But UM, when you talk about coming back 497 00:25:08,520 --> 00:25:13,840 Speaker 1: to Eric's earlier conversation around advisors really being comfortable and understanding, UM, 498 00:25:13,880 --> 00:25:16,200 Speaker 1: it felt like there was so much in the news 499 00:25:16,240 --> 00:25:19,399 Speaker 1: over the past couple of years with with Fortnite and 500 00:25:19,000 --> 00:25:22,160 Speaker 1: and Ninja and Drake playing and having hundreds of thousand 501 00:25:22,240 --> 00:25:24,240 Speaker 1: people watched them on Twitch, that it kind of felt 502 00:25:24,240 --> 00:25:27,119 Speaker 1: like it was e sports and gaming in the U S. 503 00:25:27,160 --> 00:25:29,080 Speaker 1: We're just getting to the point where they were mainstream, 504 00:25:29,119 --> 00:25:31,480 Speaker 1: and even those those advisors who maybe have never picked 505 00:25:31,520 --> 00:25:34,240 Speaker 1: up a game themselves were kind of able to they 506 00:25:34,240 --> 00:25:36,720 Speaker 1: had heard about it, and that I think played into 507 00:25:36,760 --> 00:25:39,000 Speaker 1: the timing. And if I could add to that as well, 508 00:25:39,000 --> 00:25:41,480 Speaker 1: because I think if you think about the fundamentals of 509 00:25:41,520 --> 00:25:44,080 Speaker 1: the industry and how it's changed in the last decade, also, 510 00:25:44,119 --> 00:25:46,520 Speaker 1: I think that also plays an important role because a 511 00:25:46,520 --> 00:25:49,480 Speaker 1: lot of investors, a lot of you know, R A 512 00:25:49,600 --> 00:25:51,760 Speaker 1: s and whatnot that are older when they think of 513 00:25:51,840 --> 00:25:54,520 Speaker 1: video game companies, these are hit driven businesses, just like 514 00:25:54,600 --> 00:25:57,840 Speaker 1: the box office companies where historically, before this game to 515 00:25:57,880 --> 00:26:00,720 Speaker 1: the service model, you live and die by every game, 516 00:26:00,800 --> 00:26:03,320 Speaker 1: and so you was, you know, you had beta risk 517 00:26:03,440 --> 00:26:06,119 Speaker 1: on the upside and you have massive negative downside skew 518 00:26:06,240 --> 00:26:08,400 Speaker 1: in these companies that were you know, living buying by 519 00:26:08,400 --> 00:26:11,400 Speaker 1: single by single games at the time. But now we're 520 00:26:11,440 --> 00:26:14,320 Speaker 1: in a world where you have these large live services 521 00:26:14,359 --> 00:26:17,000 Speaker 1: games that are highly recurring in their revenue, you know, 522 00:26:17,080 --> 00:26:21,000 Speaker 1: electronic arts of their revenue and over ninety percent of 523 00:26:21,000 --> 00:26:23,840 Speaker 1: their cash flow is basically recurring. Now you couldn't say 524 00:26:23,840 --> 00:26:26,480 Speaker 1: that ten years ago. And so because of that dynamic, 525 00:26:26,560 --> 00:26:28,840 Speaker 1: you look at a business a business model that is 526 00:26:29,080 --> 00:26:32,200 Speaker 1: that is much more sasllite than it was box office 527 00:26:32,280 --> 00:26:35,240 Speaker 1: like ten years ago, and that that is starting to 528 00:26:35,320 --> 00:26:37,600 Speaker 1: change investors perceptions. And you saw this start to really 529 00:26:37,600 --> 00:26:41,320 Speaker 1: take hold in seen that's when multiples of the sector 530 00:26:41,400 --> 00:26:43,639 Speaker 1: really started to detach away from other media stocks and 531 00:26:43,640 --> 00:26:45,960 Speaker 1: trade more like tech stocks. And since then it's kind 532 00:26:45,960 --> 00:26:48,000 Speaker 1: of been in that range. And so you know, it 533 00:26:48,000 --> 00:26:50,200 Speaker 1: took a couple of years for investors to buy into 534 00:26:50,240 --> 00:26:54,639 Speaker 1: that thesis. But since then, um that that that really 535 00:26:54,640 --> 00:26:56,880 Speaker 1: that new mindset has taken hold. And I think you've 536 00:26:56,920 --> 00:26:59,320 Speaker 1: also seen that in the flows into funds like wills 537 00:26:59,320 --> 00:27:03,240 Speaker 1: as well. Yeah, I do think this is a you know, 538 00:27:03,280 --> 00:27:06,879 Speaker 1: an issue that is gonna just persist. I pulled people 539 00:27:06,960 --> 00:27:11,479 Speaker 1: on Twitter a year ago, and perception to frivolous was 540 00:27:11,560 --> 00:27:14,919 Speaker 1: the number one answer for why the video game ETFs 541 00:27:14,960 --> 00:27:17,840 Speaker 1: haven't attracted the kind of assets that robotics, cybersecurity and 542 00:27:17,880 --> 00:27:21,440 Speaker 1: even cannabis has despite having numbers that are as good 543 00:27:21,600 --> 00:27:25,239 Speaker 1: or better in terms of performance and revenue. Uh. And 544 00:27:25,240 --> 00:27:28,480 Speaker 1: then the second choice was ignorance unaware they're missing a 545 00:27:28,520 --> 00:27:30,600 Speaker 1: lot of growth right now. It's just it's just weird 546 00:27:30,640 --> 00:27:32,320 Speaker 1: to me. I feel like if you did one of 547 00:27:32,320 --> 00:27:35,680 Speaker 1: those old schools taste tests and you put up the 548 00:27:35,760 --> 00:27:37,600 Speaker 1: numbers but not the name of the e t F, 549 00:27:38,080 --> 00:27:41,280 Speaker 1: people would pick the video game et F over those others. 550 00:27:41,320 --> 00:27:43,120 Speaker 1: But then you showed the name and they're like, oh, 551 00:27:43,280 --> 00:27:45,680 Speaker 1: I didn't want to pick that. I think. I think 552 00:27:45,720 --> 00:27:48,760 Speaker 1: another thing that we kind of touched on a bit earlier, 553 00:27:48,800 --> 00:27:52,080 Speaker 1: but is the exposures in the underlying industry. Just in 554 00:27:52,160 --> 00:27:54,560 Speaker 1: terms of the nature of which companies are public, there 555 00:27:54,560 --> 00:27:57,720 Speaker 1: aren't that many household names that are US listed. You 556 00:27:57,760 --> 00:28:01,120 Speaker 1: have Activision, Blizzard, Electronic Arts, take Too, and maybe throw 557 00:28:01,200 --> 00:28:03,960 Speaker 1: Zinga in there, and that's it. And I think without 558 00:28:04,359 --> 00:28:07,600 Speaker 1: kind of in the investing public having been conditioned to 559 00:28:07,720 --> 00:28:10,920 Speaker 1: understand these companies follow earnings things of that nature, when 560 00:28:10,920 --> 00:28:12,960 Speaker 1: you put a whole portfolio of names in front of 561 00:28:13,000 --> 00:28:14,600 Speaker 1: them that there may be not as familiar with, it 562 00:28:14,840 --> 00:28:16,280 Speaker 1: kind of takes a little bit of time. Let me 563 00:28:16,320 --> 00:28:20,320 Speaker 1: watch a little bit um versus uh, you know, maybe 564 00:28:20,359 --> 00:28:24,600 Speaker 1: maybe other sectors where you've got fifty sixty plus percent 565 00:28:24,760 --> 00:28:28,320 Speaker 1: US names that you're all familiar with. And I would 566 00:28:28,320 --> 00:28:31,080 Speaker 1: also say that to Will's earlier point about Microsoft and Sony, 567 00:28:31,119 --> 00:28:34,240 Speaker 1: a lot of the companies aren't pure plays in gaming. 568 00:28:34,720 --> 00:28:37,040 Speaker 1: You know, Microsoft is one of the biggest gaming companies 569 00:28:37,040 --> 00:28:39,000 Speaker 1: in the world, but gamings only ten percent of Microsoft. 570 00:28:39,040 --> 00:28:41,320 Speaker 1: Sony is a bank. People forget that Sony also is 571 00:28:41,320 --> 00:28:43,840 Speaker 1: a bank. Um See Limited, which is one of the 572 00:28:43,840 --> 00:28:47,640 Speaker 1: best performing emerging market stocks in the world right now. Um. 573 00:28:47,680 --> 00:28:50,760 Speaker 1: They're a huge gaming company in Southeast Asia, but they 574 00:28:50,800 --> 00:28:53,120 Speaker 1: also have this massive e commerce business that's growing at 575 00:28:53,120 --> 00:28:56,640 Speaker 1: a hundred percent a year, So that that also affects 576 00:28:56,680 --> 00:28:59,240 Speaker 1: the business model as well in the sense that these large, 577 00:28:59,240 --> 00:29:03,200 Speaker 1: the largest players are diversified tech conglomerates, you know, basically, 578 00:29:03,280 --> 00:29:06,120 Speaker 1: and then you have smaller players that are also diversified 579 00:29:06,160 --> 00:29:08,800 Speaker 1: as well. You only have a handful of your plays. 580 00:29:09,360 --> 00:29:12,080 Speaker 1: One thing we're seeing happen right now, um, and it's 581 00:29:12,120 --> 00:29:15,080 Speaker 1: happening in both the West and the East, is big 582 00:29:15,120 --> 00:29:18,520 Speaker 1: technology companies. The largest technology companies in the world are 583 00:29:18,560 --> 00:29:22,560 Speaker 1: all making investments in terms of human capital and millions 584 00:29:22,560 --> 00:29:26,240 Speaker 1: of dollars into video games streaming platforms. So you have 585 00:29:26,280 --> 00:29:30,000 Speaker 1: Amazon that famously bought Twitch. Google is investing into YouTube gaming, 586 00:29:30,000 --> 00:29:32,760 Speaker 1: Facebook has Facebook, and then if you go to kind 587 00:29:32,800 --> 00:29:35,560 Speaker 1: of Asia Pacific ten cents invested into Huyian. Do you 588 00:29:35,720 --> 00:29:38,120 Speaker 1: Sony and Billy Billy, And I think, really what this 589 00:29:38,240 --> 00:29:40,840 Speaker 1: all has has and this is transpired over the last 590 00:29:40,880 --> 00:29:43,800 Speaker 1: few years, is it speaks to the fact that one 591 00:29:43,880 --> 00:29:47,280 Speaker 1: gaming is becoming mainstream, but two, I think there's something 592 00:29:47,320 --> 00:29:51,080 Speaker 1: bigger at work here where large tech is figuring out 593 00:29:51,120 --> 00:29:53,920 Speaker 1: that gaming, whatever form that kind of takes. In this case, 594 00:29:53,960 --> 00:29:57,800 Speaker 1: streaming platforms really can be a user acquisition tool to 595 00:29:58,000 --> 00:30:00,080 Speaker 1: kind of and kind of be that top of an 596 00:30:00,120 --> 00:30:03,680 Speaker 1: all um for kind of building relationships with a younger 597 00:30:03,720 --> 00:30:08,120 Speaker 1: audience and having them over time convert to potentially higher 598 00:30:08,240 --> 00:30:11,520 Speaker 1: margin businesses. And there's something like really powerful about the 599 00:30:11,520 --> 00:30:15,760 Speaker 1: biggest tech companies in the world investing into games streaming. Um. 600 00:30:15,800 --> 00:30:17,320 Speaker 1: I think it's a little bit early to say what 601 00:30:17,440 --> 00:30:20,760 Speaker 1: their endgame is there, but it's just it's so fascinating 602 00:30:20,760 --> 00:30:23,600 Speaker 1: to watch, and I think really important to note that 603 00:30:24,080 --> 00:30:26,480 Speaker 1: the biggest tech companies all say, hey, there's something here. 604 00:30:26,480 --> 00:30:30,280 Speaker 1: This demographic is really valuable. Let's let's invest. It's also 605 00:30:30,320 --> 00:30:32,240 Speaker 1: important to note that a lot of those companies are 606 00:30:32,280 --> 00:30:37,240 Speaker 1: the big cloud companies Microsoft, Amazon, Google, Facebook, and cloud gaming, 607 00:30:37,240 --> 00:30:39,800 Speaker 1: as I mentioned, is starting to take off, and over time, 608 00:30:40,280 --> 00:30:43,520 Speaker 1: I think you're gonna see a blending of streaming and 609 00:30:43,560 --> 00:30:45,680 Speaker 1: cloud gaming. I mean, think about it this way. You 610 00:30:45,720 --> 00:30:50,680 Speaker 1: could pay to play Fortnite with Ninja. You hop into 611 00:30:50,800 --> 00:30:53,440 Speaker 1: his Twitch stream and then all of a sudden, you 612 00:30:53,520 --> 00:30:55,960 Speaker 1: pay a premium and you can jump right into the 613 00:30:56,000 --> 00:30:58,120 Speaker 1: game with him. You know, these are the type of things. 614 00:30:58,120 --> 00:31:00,400 Speaker 1: This is where gaming is going, going to what I 615 00:31:00,400 --> 00:31:03,600 Speaker 1: was talking about the metaverse being hyper engaged with audiences. 616 00:31:03,960 --> 00:31:06,240 Speaker 1: This is where gaming is going. And I think that's 617 00:31:06,280 --> 00:31:08,000 Speaker 1: that's one of the key trends. This is like a 618 00:31:08,000 --> 00:31:10,680 Speaker 1: decade long trend. But this is where I think we're going. 619 00:31:11,240 --> 00:31:13,640 Speaker 1: I can tell you guys are just like nerd ing out. 620 00:31:13,840 --> 00:31:16,680 Speaker 1: You could I could see you guys intended going like 621 00:31:16,760 --> 00:31:19,400 Speaker 1: hours at a bar over this stuff and know you're 622 00:31:19,400 --> 00:31:21,080 Speaker 1: exciting to go to a bar. Just go to a 623 00:31:21,160 --> 00:31:24,640 Speaker 1: video game. Yeah that's right. Sorry, that doesn't exist anymore, right, 624 00:31:25,080 --> 00:31:29,440 Speaker 1: social interaction, screw that, Okay, but we'll go to a 625 00:31:29,520 --> 00:31:32,640 Speaker 1: video that's right. There is there a video game called 626 00:31:32,680 --> 00:31:35,000 Speaker 1: bar just going to grant theft auto online. You go 627 00:31:35,040 --> 00:31:38,240 Speaker 1: to a bar that's right speaking Well, this this actually 628 00:31:38,280 --> 00:31:41,320 Speaker 1: riffs merges into my question. I just saw Already Player 629 00:31:41,360 --> 00:31:43,840 Speaker 1: one with my son and it was a good movie, 630 00:31:43,920 --> 00:31:46,600 Speaker 1: you know, it was, we enjoyed it. But I think 631 00:31:46,600 --> 00:31:48,640 Speaker 1: it was ramp or. Somebody on Twitter said that's what 632 00:31:48,760 --> 00:31:51,480 Speaker 1: they see as being the most accurate depiction of what 633 00:31:51,520 --> 00:31:53,800 Speaker 1: the future will be like. And I was thinking more 634 00:31:53,840 --> 00:31:55,600 Speaker 1: about it and the way you guys are talking, I'm like, 635 00:31:56,200 --> 00:31:59,640 Speaker 1: will there be like this world in which we communicate 636 00:32:00,040 --> 00:32:03,960 Speaker 1: in and live in digitally that isn't the real world 637 00:32:04,000 --> 00:32:07,200 Speaker 1: that sort of becomes bigger and bigger and maybe even 638 00:32:07,280 --> 00:32:10,160 Speaker 1: at the expense of the real world. And does that 639 00:32:10,240 --> 00:32:15,520 Speaker 1: starting September because we're all in a pandemic. I think 640 00:32:15,720 --> 00:32:18,040 Speaker 1: I think if you'd speak to most people, it's kind 641 00:32:18,080 --> 00:32:21,920 Speaker 1: of it's it's it's not if. But when that kind 642 00:32:21,960 --> 00:32:24,640 Speaker 1: of really takes hold and becomes kind of a bigger 643 00:32:24,720 --> 00:32:27,560 Speaker 1: part of culture, I mean you're seeing pockets of it now. 644 00:32:28,000 --> 00:32:32,480 Speaker 1: Um You're seeing uh graduations held within Minecraft, You're seeing 645 00:32:33,000 --> 00:32:37,719 Speaker 1: dates inside roadblocks, you're seeing um music concerts. Travis Scott 646 00:32:37,760 --> 00:32:41,320 Speaker 1: inside a Fortnite right, Like, these games are becoming platforms 647 00:32:41,360 --> 00:32:44,000 Speaker 1: for things other than what the original intention and the 648 00:32:44,040 --> 00:32:46,320 Speaker 1: code that was written for people to try and win 649 00:32:46,400 --> 00:32:49,959 Speaker 1: the games. They're becoming more like social media, um in 650 00:32:50,000 --> 00:32:53,800 Speaker 1: that sense, and I think, um, in my mind it's 651 00:32:53,840 --> 00:32:56,040 Speaker 1: you know, I actually if you if you go on Twitter. 652 00:32:56,320 --> 00:32:58,360 Speaker 1: About a year ago, I asked him Sweeney, who's the 653 00:32:58,400 --> 00:33:00,320 Speaker 1: CEO of Epic on Twitter, I said, do you view 654 00:33:00,360 --> 00:33:03,520 Speaker 1: Fortnite as a game or platform? And he famously said 655 00:33:04,280 --> 00:33:05,720 Speaker 1: I view it as a game, but asked me, you 656 00:33:05,760 --> 00:33:07,960 Speaker 1: get in twelve months, and I think all of these 657 00:33:08,600 --> 00:33:12,440 Speaker 1: game CEOs are really thinking about how to how to 658 00:33:12,600 --> 00:33:15,280 Speaker 1: make their i P bigger than just a game and 659 00:33:15,320 --> 00:33:17,800 Speaker 1: a place where people engage more and more. And then 660 00:33:18,000 --> 00:33:20,560 Speaker 1: the amount of monetization potential that you have there. I 661 00:33:20,560 --> 00:33:23,320 Speaker 1: mean you talk about in game advertising, you talk about 662 00:33:23,640 --> 00:33:27,040 Speaker 1: brand activations inside of games, and and just kind of 663 00:33:27,120 --> 00:33:29,640 Speaker 1: this entire new world is opened up. But it is 664 00:33:29,640 --> 00:33:33,640 Speaker 1: a scary concept. Right like now, I think we're uniquely 665 00:33:34,160 --> 00:33:36,320 Speaker 1: the entire world is kind of sharing in this concept 666 00:33:36,320 --> 00:33:39,080 Speaker 1: of living virtually right now. So it's maybe more than 667 00:33:39,120 --> 00:33:42,800 Speaker 1: ever seems like something that hey, that's not so crazy. Um, 668 00:33:42,840 --> 00:33:44,960 Speaker 1: but I think it's really it's not if but when 669 00:33:45,560 --> 00:33:48,800 Speaker 1: Will cavya and say, because I am a big VR 670 00:33:48,960 --> 00:33:52,000 Speaker 1: virtual reality skeptic, I don't think this is gonna be 671 00:33:52,720 --> 00:33:56,640 Speaker 1: everyone putting on a virtual reality headset and completely disassociating 672 00:33:56,640 --> 00:33:59,240 Speaker 1: themselves from the world around here. You guys have kids, 673 00:33:59,240 --> 00:34:02,080 Speaker 1: could you imagine like locking yourself out with noise canceling 674 00:34:02,080 --> 00:34:04,760 Speaker 1: headphones and kids running around and god forbid they hurt 675 00:34:04,760 --> 00:34:07,760 Speaker 1: themselves and you have no clue because you're in the metaverse. 676 00:34:07,840 --> 00:34:09,960 Speaker 1: Like so, so I think there's limits to it, But 677 00:34:10,000 --> 00:34:11,600 Speaker 1: I agree, But I just I don't think it'll be 678 00:34:11,640 --> 00:34:14,400 Speaker 1: exactly like what we've seen in the movies where or 679 00:34:14,440 --> 00:34:17,560 Speaker 1: what's coming in cider Punk later this year from CD Project, 680 00:34:17,600 --> 00:34:20,080 Speaker 1: who's a great video game developer, where you your character 681 00:34:20,200 --> 00:34:23,279 Speaker 1: inside the game, puts on a VR headset inside the 682 00:34:23,320 --> 00:34:27,240 Speaker 1: game to go inside a neural network inside the video game. Um, 683 00:34:27,280 --> 00:34:29,439 Speaker 1: that's coming later this year in November, and it's gonna 684 00:34:29,440 --> 00:34:31,279 Speaker 1: be an amazing game. But you know, so I don't 685 00:34:31,280 --> 00:34:33,239 Speaker 1: think that kind of thing happens. I think it's going 686 00:34:33,320 --> 00:34:35,400 Speaker 1: to be continuing more of what we've seen, you know, 687 00:34:35,960 --> 00:34:39,360 Speaker 1: as as Will said perfectly, video games morphing into social networks. 688 00:34:39,360 --> 00:34:43,640 Speaker 1: These are the new social networks. This is what's displacing Facebook. Okay, 689 00:34:44,000 --> 00:34:49,640 Speaker 1: So closing questions, best game of all time and the 690 00:34:49,719 --> 00:34:52,600 Speaker 1: game that I need to go play when I get 691 00:34:52,600 --> 00:34:59,680 Speaker 1: off of this interview. Oh man, that's so difficult. I'm 692 00:34:59,719 --> 00:35:02,120 Speaker 1: gonna show off that I'm not as hardcore of a gamer. 693 00:35:02,160 --> 00:35:04,960 Speaker 1: But I want to say the best video game of 694 00:35:05,040 --> 00:35:10,239 Speaker 1: all time, it's Halo Halo one, the original Halo. And 695 00:35:10,280 --> 00:35:12,960 Speaker 1: maybe that's that's like very specific to my age and 696 00:35:12,960 --> 00:35:15,359 Speaker 1: in terms of what you gotta go play now, Um, 697 00:35:15,400 --> 00:35:17,720 Speaker 1: I mean, if you've never played Fortnite, it's free to play, 698 00:35:17,960 --> 00:35:19,719 Speaker 1: like you've got to try it, or called Duty war 699 00:35:19,800 --> 00:35:23,920 Speaker 1: Zone one of those two. But I'm gonna say Doom, 700 00:35:24,160 --> 00:35:28,239 Speaker 1: the original Doom, because that kind of was the precedent 701 00:35:28,360 --> 00:35:34,160 Speaker 1: for like all sorts of modern shooter games going forwards. Um, 702 00:35:34,480 --> 00:35:36,799 Speaker 1: games that I have spent the most time in. My 703 00:35:36,880 --> 00:35:41,000 Speaker 1: favorite game of all time was called Duty Modern Warfare two. Um, 704 00:35:41,040 --> 00:35:44,040 Speaker 1: you know, back in the heyday. Um. And what I've 705 00:35:44,040 --> 00:35:46,239 Speaker 1: been playing now I mentioned it. I've been playing for 706 00:35:46,360 --> 00:35:49,000 Speaker 1: is the Horizon for And it's just fun because you 707 00:35:49,000 --> 00:35:53,960 Speaker 1: get to jump cars off of mountains, all right, Matt Kannerman, 708 00:35:54,160 --> 00:35:55,879 Speaker 1: Will or she think you guys so much for joining 709 00:35:55,920 --> 00:36:04,720 Speaker 1: us on Trillions. Thanks guys, thanks for listening to Trillions 710 00:36:05,080 --> 00:36:07,360 Speaker 1: until next time. You can find us on the Bloomberg Terminal, 711 00:36:07,560 --> 00:36:11,759 Speaker 1: Bloomberg dot com, Apple Podcasts, Spotify, and wherever else you 712 00:36:11,800 --> 00:36:14,000 Speaker 1: like to listen. We'd love to hear from you. We're 713 00:36:14,040 --> 00:36:17,960 Speaker 1: on Twitter, I'm at Joel Weber Show, He's at Eric Baltunas, 714 00:36:18,400 --> 00:36:22,640 Speaker 1: And you can find Matt at the cantor Bot. And 715 00:36:22,719 --> 00:36:27,279 Speaker 1: you can find Will at Maybe Bullish. This episode of 716 00:36:27,280 --> 00:36:30,920 Speaker 1: Trillions was produced by Magnus Hendrickson. Francesca Levy is the 717 00:36:30,920 --> 00:36:34,120 Speaker 1: head of Bloomberg Podcast. Bye.