Yuga as Gregarious Games is facing into Meta (Facebook) as Innovative Online Industries, and as future players we have a choice to make.

The story has been heard by equity investors, jpeg flippers, book readers and movie watchers – but now finally the metaverse is coming and we are seeing glimpses of this future through the keyhole. Platform improvements including for gaming engines, hardware, physical networking and software/protocols are the foundations on which metaverses will be built.

There are plenty of companies vying to create their own metaverses, but few have visions that are truly immersive experiences. Companies like Epic have raised billions of dollars in the search to turn their respective games into metaverses (read: allowing more people into their existing game modes). Others have established divisions or entirely new businesses to service the new metaverse industry (NVIDIA, Microsoft, Amazon, etc.). [4]

Two of the companies who have the stated their primary objective is to create the customer facing product that is a truly and totally immersive experience, where people can live a separate virtual life, are Meta (Facebook) and Yuga Labs as the face of a partnership with other Web3 companies.

In my humble opinion, in as much as 1984 warned of the dangers of totalitarianism, Ready Player One warns us of the situation we are in now. This applies beyond Yuga Labs’ Otherside metaverse project [5], to any other would-be immersive metaverse. The actions we take, who we endorse and how hard we endorse them, will guide these metaverses and any others that emerge.

 “I mean it's nothing less than a war for control of the future”

 – Nolan Sorrento, Ready Player One \[2\]

“Our goal is to help the metaverse reach a billion people and hundreds of billions of dollars of digital commerce this decade. Strategically, helping to shape the next platform should also reduce our dependence on delivering our services through competitors.” [3]  

 - Mark Zuckerberg

Gregarious Games / Yuga Labs

Yuga derived from selling NFT memberships as an initial baby step into web3. People like me came because they liked the art and, largely through gambling on crypto, liked the concept of digital assets and immutability. Those people have stayed as value is delivered to them by Yuga executing on plans, and to retain association with the brand and culture. In one year Yuga has moved from the basement dwelling jpeg flipper through crypto markets, to VC markets and now is moving to the rest of the world.

It appears as if Yuga provides the brand, vision and direction, with partners who advise (a16z, Something New) and who execute (Something New, Impossible.io, Animoca Brands). They do not completely own all their investments (how could they own $APE for example, that is owned by us) but clearly it is their IP and their direction [6] [7].

Yuga’s stated goal includes that “fans and players are owners and creators, and in the game of web3, everyone can create and play together on one team” [7]. As they guide their partners and teams to build their metaverse, Otherside, Yuga is completely economically aligned with that goal – the value of their brand is driven by the desirability to be part of their ecosystem and community. This is brutally clear when the vast majority of their rewards are in $APE which is locked for >12 months [8]. They have customer members and derive value from the long term success of what they build, which is dictated by the community – this business model is unique to web3 and genuinely awesome.

How does Yuga succeed with Otherside? Build an initial world, a ‘constitution’ or base level rules, SDK and game engine. That is given to players to then build upon and one day, possibly, managed and owned by the players. That seems quite clear given their economic incentives.

TLDR; Yuga is building something that is owned by us, for us. Many companies say that but how can it be true if they are not economically aligned. Yuga is completely aligned with what they say they want to do as they earn only from higher NFT volumes, floor prices and $APE price.

Innovative Online Industries / Meta (Facebook)

Meta (Facebook) is born from user numbers and advertising revenue, their economic incentives are to generate returns on equity by attracting users to the platform to monetize their data and sell ads.

It is not Meta’s fault and they are not evil, but hear what they say and look at their economic incentive. Quoting a CNBC article “Zuckerberg said advertising in the metaverse with be an ‘important part’ of the Facebook’s strategy to profit off the metaverse but he sounded more bullish on commerce in the digital world” [9]. They are after 47.5% of sales, no stated objective to work towards user ownership of the goods and still expect to sell data / advertisements. Meta also owns Oculus [10], the VR headset company, so that you are able to enter their metaverse with their branded physical equipment. 

Imagine hundreds of people developing assets in Meta’s metaverse to sell you, with teams of monetization professionals working out the maximum you will spend and what you will spend it on, all employed by Meta. They define the rules, they could make decisions that ultimately topple the metaverse, they are incentivized to produce and sell. You do not actually own what you build or buy, whilst Meta is selling your data and advertising to you on behalf of other companies. They still need you to play their game, but their primary economic incentive is for you to buy their stuff and watch ads.

The Oasis (and TLDR)

We, as the players, can choose the type of Oasis (metaverse [2]) we want to see through the allocation of our time and attention. Whichever metaverse we choose, we will be building it. One or both may succeed or one or both may fail but the one that gets the most focus will set the tone for culture and gaming for a generation. Choose wisely.

Quite a boring table to make it seem like I have done a lot of work

Thanks for reading,

Ponos.eth Finance/Technology/Ape

References/notes

1. This article is my own opinion only and it is not financial advice
2. Watch the movie or read the book dude
3. https://s21.q4cdn.com/399680738/files/doc_financials/2021/q3/FB-Q3-2021-Earnings-Call-Transcript.pdf
4. https://www.reuters.com/technology/whos-building-metaverse-2021-11-01/.
5. https://otherside.xyz/
6. https://twitter.com/CryptoGarga/status/1520629890911023104
7. https://www.yuga.com/
8. https://twitter.com/OthersideMeta/status/1518734004022919168] [https://apecoin.com/about
9. https://www.cnbc.com/2021/07/29/facebook-metaverse-plans-to-make-money.html
10. https://www.inputmag.com/tech/how-meta-plans-dominate-metaverse-buy-every-vr-company
11. https://www.nasdaq.com/market-activity/stocks/fb
12. https://www.coindesk.com/business/2022/03/22/bored-apes-owner-yuga-labs-raises-450m-led-by-a16z/
13. https://investor.fb.com/financials/default.aspx; used past 10 years and (revenue – FCF = capex + opex, as reported in investment presentations), I know its lazy but I’m not getting paid for this shit, don’t fact check me it’s not worth it… should be in the right order of magnitude
14. https://coinmarketcap.com/nft/, https://opensea.io/collection/otherdeed (including $APE revenue for primary sales), https://boredapeyachtclub.com/#/mayc/info, ignoring $APE earnings on Apecoin DAO
15. https://twitter.com/LeonidasNFT/status/1505060845847461890/photo/1, I reckon Otherside is costing them a bucket given the $450m they raised and $500m of revenue vs $100m of Opex they reckon they will spend, but no idea what that looks like
16. https://coinmarketcap.com/, https://coinmarketcap.com/nft/; floor calculations excluding CryptoPunks and Meebits acquisitions, I know I’m using floor and that is lazy
17. https://www.cnbc.com/2022/04/13/meta-plans-to-take-a-nearly-50percent-cut-on-nft-sales-in-its-metaverse.html