In this segment, we discuss the success of blockchain gaming platform Forte.
The Business Of Esports brings you news, debates, and all the information you need to know about the gaming sector, the world’s fastest-growing market. With Paul “The Profit” Dawalibi leading the charge, and a variety of special guests, BoE TV is the only place to find insider information on the esports industry!
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Paul Dawalibi 1:08:11
Let’s talk about let’s talk about blockchain. Hang on. Let me put this article up trying to do multiple things at once here. blockchain gaming platform forte valued at a billion dollars. The headline here, this is a blockchain based gaming infrastructure startup. They raised $185 million $1 billion post money valuation. They have you know, solid investors. You’re talking about Griffin gaming partners, Union Grove venture Partners Andreessen Horowitz ventures, global Tiger global Yeah, this is like as blue chip as solid as venture investors get. And so they’re sitting at this intersection of like NF T’s and gaming. And what’s interesting is they’re more like infrastructure. So the idea here is that games that want to implement blockchain or NF T’s are these kinds of technologies. They have technology or platform or infrastructure that can be built into games. Now. I’m curious, Jeff, we haven’t talked much about the intersection of blockchain gaming, we touched a little bit on NF T’s and gaming. What do you think of a raise like this? First of all, no one talked about this. Like, I feel like this flew under the radar, even though it’s a massive raise with maybe the best investors we’ve ever seen in a gaming company. But I’m curious what you think of this sort of development? In general, what you make of this trend? Is this a lot of hype? Is there substance here? What How do you feel about it?
Jeff Cohen 1:11:09
I mean, there’s certainly a lot of a lot of hype, you know, clearly with NF T’s blockchain, crypto in general, and then you toss you toss in those investors. I mean, this is a pretty impressive show force. But just because there’s a lot of hype doesn’t mean there’s not substance behind it, or potentially won’t be substance behind it. I didn’t catch in the article, um, you know, what actually, they’re going to be doing. But I do think that, you know, I think you’ve talked about it before in the podcast, or William has talked about it. And I certainly agree that there is a place in the future for either NF T’s or blockchain or something within games when you’re buying these digital items, where they can be tokenized, and you’re holding a, you know, one of a limited amount of items, and then you have some saleability of it. Now, the one potential challenge with the saleability aspect is that, as I understand, particularly, if we’re talking about loot boxes, one of the big reasons why loot boxes are not considered gambling is because there’s no monetary value, there’s no way to cash them out. So as soon as you allow transferability, I think you could run into problems with it being considered gambling. But that notwithstanding, I think there is a massive opportunity here where you’ve always use the example of you know, the sword in World of Warcraft, where you’re the only one who can wield the sword, and then you can sell it. I think that is a great idea. Now, I didn’t catch what this company is going to be doing, are they, you know, maybe they’re the ones minting the NF T’s, maybe they’re doing the infrastructure, not sure. But I certainly think that there is a big opportunity for a company like that in the space, it will just be a question of how quickly when and how quickly do the big publishers catch on and start putting this into their games? I’m sure they’re looking at it.
Paul Dawalibi 1:13:00
Yeah, forte fundamentally builds themselves as like tools and services for game developers to integrate blockchain technology into their games, right. And so I sort of think part of why it got such a big valuation big round such marquee investors is, I would guess many of them are looking at this, like, hey, this could be the Unity or the Unreal Engine, right? of the future. When it comes to blockchain and NF T’s and other sort of blockchain related technologies being integrated into games, right, it becomes the de facto sort of standard set of tools that every game developer uses because they don’t want to roll their own. And and then, you know, if you believe that blockchain, and NF T’s and all these technologies have a future in gaming, now you go Wait a second, like a forte really does have that set of tools and infrastructure and, and game developers are adopting this. That could be a really big play, right? Like, again, you could get something on the scale of a unity or an unreal. I don’t know if you think that’s the thesis here for these investors, if you had to sort of take a guess.
Jeff Cohen 1:14:12
I think it is, you know, certainly something of that, of that nature, that they can be a tools business, embedded sort of into the gaming ecosystem. And it doesn’t seem that far fetched. I think we’ve all espoused the concept, it seems like everyone’s on board that it would make sense to have some sort of tokenization of micro transaction items. And then it becomes a question of, Okay, how does that actually get implemented? And if this third party makes it easier for developers to implement, they have a place in the ecosystem. Now, we’ve no we know nothing about what their plan is or how they are going to implement that but for like conceptually, to me, it that’s an idea you’re willing to bet on was so it’s not surprising that they’ve kind of you know, assembled the of VCs.
Paul Dawalibi 1:15:02
I looked at Forte’s own website, right? And it’s interesting. Let me just pull it up here. They say 20 of the world’s finest over 20 of the world’s finest game developers are already building on the Forte platform. And you look at this list of ego. It’s not exactly I mean, high rez is a pretty good well known studio, but we’re not talking about like a who’s who? of Game Studios, right? Like, some decent names on here. But it’s not, you know, we’re not talking about Blizzard, we’re not talking about, you know, respawn where we’re like, we don’t have this caliber of game studio on this list. billion dollar valuations pretty rich, right? But clearly, they’re betting on a ton of growth in this list of names, right, you would have to do you know, I don’t know if you agree with that, Jeff.
Jeff Cohen 1:15:52
Oh, 100%. I mean, you’re you know, same way, I view this almost similar to how I view skills where if your bowling skills, you are betting that, at some point in the future, you know, you’ll be able to play Candy Crush, on skill, like you’ll be able to bet on Candy Crush, via the skills platform and triple A, you know, massive publishers will be embedding that competition layer into their games. It’s kind of the same thing you’re betting on here. So it’s not surprising, and it doesn’t, I guess I wouldn’t be disappointed if our them that they only have these adopters are the early adopters, we’re never going to be at EA and Activision, like that would be shocking if they were the first ones to try these new innovations. disrupting the industry model. That would be that’s just not the way innovation typically happens. So the fact that they even have those names means they have some sort of tech, which actually, that’s further along than I would have expected, I guess is my, my point.
Paul Dawalibi 1:16:53
I just want to read some of these comments. Sorry, I’m a bit behind here. Christian said, Paul, you should turn these facts into an engagement poll during after shows and on social media. Christian, it’s a great idea. And we have plans to do a lot more with yougov data and integrating it into the content and outside of the content. But I love this idea. And I would definitely want to try all of this. What’s more, just a question of time and resources right now. And but that’s a great idea. I think you’ll like I said, stay tuned over the next few weeks, you’re going to see more and more come out of the EU. gov partnership in terms of content and integration. But I appreciate it. Chris says I’m still mad at the amount of vaporware I’ve spent on my son’s valorant skins give me NF T’s.
Unknown Speaker 1:17:37
I mean, Chris, would
Paul Dawalibi 1:17:38
it really have made a difference? It’s a good, I like the comment. But it’s like if you had NF T’s fundamentally what changes for you? I’m just curious. Is it a sense that it may have more future value or I’m curious how you think about why NF T’s might have made you less mad? cam says you at yougov on Twitter. Yeah, thank you, Kim, thank you for that. We can we need to hire you. We just need to I thought you were going to be our merch guy but maybe you need to be our promo guy here. Christian says agree with Paul’s point about it being the blockchain engine for the triple A publishers could be really valuable in support valuation maybe lead to acquisition. You know, anytime a startup gets a billion dollar valuation, the universe of acquirers definitely gets smaller. And now you’re only talking some of the biggest companies in the world, either tech or, or gaming companies. At this stage, I think we’re just seeing such a clear path to IPO for so many of these platforms, that I’d be surprised if the exit was acquisition. Triple A publisher.
Jeff Cohen 1:18:52
I wouldn’t be surprised probably for a publisher because you’re a b2b. So you probably need you know, Activision buys them are they gonna still let the others
Paul Dawalibi 1:19:02
unless you think it gives you some very unique advantage or something?
Jeff Cohen 1:19:06
Yeah, yeah. But you’d also be killing a lot of their revenue BSA. Yeah. The but the obvious. I think the obvious exit would be to unity or epic or valve or a Facebook or someone like a just a software company. But uh, yeah, I agree. I think if you’re already at a billion you’re either going to need to be acquired by someone much bigger or you’re going to need to go public to get people there.
Paul Dawalibi 1:19:34
Their return. Christian says happy to help Christian we love having you here every week. It really means a lot and love the comments. Chris says I told him I had Transformers as a kid today they are worth something. What’s in his digital toy box? I mean, this is why you have NF t selling for you know ridiculous amounts of money. This kind of thinking and it’s hard to refute right? It’s hard to hard to argue that Chris I guess, who, who will care to buy a digital, like a, you know, a vandal skin 25 years from now, whether you have an NF T or not, we have to make the assumption that valorant will still be relevant in some way. And that to me is not, not a slam dunk. Yes, but maybe I just think probably unlikely.