Introducing X.LA with Shurick Agapitov

My name is Shurick Agapitov and I started the company which sells digital items inside video games when I was 21. In 2009 I moved to the United States and the company called Xsolla. I tried to raise money in 2009 and I failed, something happened in 2008. So it's not, yeah. And I turned out owning 100% of the company. So today we sell a lot of in-game items for many, many online games and it's a successful business. I decided not to sell it and keep it forever. I really enjoy video game economy and playing video games, so digital items is fun. But I saw this opportunity after Zuckerberg did this and he basically distributed the dream that many video game developers have and are very well aware of, called metaverse. And metaverse I think become a household name. We don't have a lot of experience, not many people experience it yet, but it's definitely everybody heard about the metaverse. So I thought this is the time for me to start the XLA and explore metaverse opportunities. To become the CEO of Xsolla and XLA, keep doing really well, selling digital items and growing very rapidly with the video games industry especially during the course of COVID which accelerated us all. And I spent almost one year whiteboarding and shaping my thoughts how the metaverse could look like, and I think I have a clear vision. And I've started a business with some prototypes later this year just for demonstration purposes. And I haven't, I don't have a lot of things to show you, but it's already beautiful in my mind.

I choose to believe that a lot of the new technologies and innovations are coming from video games. For example, artificial intelligence exists or self-driving cars exist because of the company called NVIDIA exists, and NVIDIA exists because of video games. And if you think about the powerful computers and powerful iPhones, we have them first and foremost because people enjoy playing video games. There's no reason to buy office applications on powerful computers. I don't know if you pick virtual reality as an innovation, before a surgeon is going to do surgery with a virtual headset, most likely somebody will use it to kill monsters or with white sailors. A lot of innovations are coming from video games. And blockchain mass adoption most likely will happen because of video games, because there are two billion people playing video games, they have experience with digital items. And if those digital items are on the blockchain, that's the game users who are going to overcome the many obstacles, whatever imperfections, and learn how to use these items. So what I'm trying to say to conclude: metaverse is not necessarily video games, but it's a new internet built with video game technologies. So it's an internet that looks like a video game as a 3D space or 3D spatial space, and it's not necessarily delivered through VR. Even if the websites look like a video game on the flat screen, I believe that's already the metaverse. Which is common anyway. 20% of video game technology and developing video games is getting easier and easier because of the tools available right now, such as Unreal Engine and Unity, which are available almost for free compared to what it was 10 or 20 years ago.

You mentioned one of the devices I think which will be really cool to navigate the 3D web, it's a cave. Google it, it's already here. It's basically big spherical projections and you can see being there in a virtual world without virtual reality glasses, it takes your motion and so on. So I believe websites, which today many of them look like a flat book with hyperlinks, in the future you're going to have a spacious, 3D space you can walk through. I like to call them metasites. I believe I invented the word metasite. And there are a few gaming technologies that could enable that, like WebGL or cloud gaming, and it could be delivered across concepts for both technologies. In the future, you can go to Adidas.com and it's going to be a portal you can go through and experience the brand as if you're inside the Adidas world or inside a video game. And if you see Unreal Engine experience which is photorealistic, real-time rendering, those could be delivered even if you don't have a gaming PC. If you have fast internet, using cloud gaming technology, you can serve those metasites. And instead of the links we have in books or hyperlinks, I imagine it will be some sort of portal like in Marvel movies. You walk through and end up in different locations. And it's important that all of those metasites, they're like an internet, not one virtual world like Roblox or Fortnite. Those I call virtual worlds, there are no portals between them. But once you have portals from Fortnite to Minecraft and you can transfer items through those portals, that's when I think we can say metaverse is here. Which, from my view, is just a new internet, the next iteration of the internet. There were a few iterations of internet before: internet of things is totally different, with WAP internet if you recall, then mobile web, which was internet of apps. So with many iterations before, I think the metaverse is just this 3D video game-like internet. And my definition of the metaverse, it's not mine, I borrow it but I really adopt it, is metaverse is when you have virtual spaces, virtual items, and users who can carry the items from one space to another. And there are opportunities on these three verticals for businesses. You can be in the business of creating virtual spaces or metasites, think about game developers becoming the website developers of metasites. If you think about virtual items, all those brands out there, we already understand people value digital items. There's going to be abundance of those digital items, and I think every brand wants to have digital items. People who create those digital items, NFT is just a database or standard which makes those items tradable or sellable if the creator wants them to be. Or it can be centralized and achieved through some sort of open API with filters and permissions. But NFT is just a database. And the last opportunity is about the users, think about the border business and how people carry the items, with login, avatar systems, backpack, all of that, and keychain. So those three business opportunities I think are common, and how to make them all together is the new internet. That's what some people call the metaverse.

What I described, I don't want to call them video games, I want to call them metasites. The reason is, video games are an experience, think about a theme park, you go and get entertained. So what I'm trying to say is imagine you're creating a brand, let's say Restoration Hardware, the furniture store. You go to the store and you have the feel of the brand, that's a very deep relationship between you and the brand, much deeper than just surfing through the flat web. So flat web pages have massive reach, you can create an online catalog of furniture and millions of people go through it. But in a metasite, you may have much deeper relations with consumers, telling the brand story in an interactive way. So those virtual worlds are not necessarily games, they're not going to be like adventure games. They are going to be storytelling experiences, and that could be a brand story or educational story or social story. They look like they're built with video game technology, but not necessarily for entertainment purposes. It's hard to predict what they'll become, because it's hard to predict what iPhone apps would be before the iPhone was released. We couldn't predict Uber, we definitely didn't create the iPhone to have Uber or Instagram. Uber and Instagram were created because of the new capabilities: higher resolution camera and geolocation capabilities.

So, those metasites, in order to make them decentralized, the economy of this metaverse is not only creating the opportunity to create a new look for the internet, but it's also a new business model. Today, virtual worlds are hosted by one provider, all the user-generated content in Fortnite or Roblox is created and owned by one entity. So I believe those metasites should be like websites developed by video game developers' technology, but instead of games, they develop brand stories and theme parks related to certain IPs. I want those metasites to be created with a different business model. It's like the old Hollywood model: a bunch of people come together, there's a producer with a creative vision, a production director, a video game developer team who can execute that vision, and a list of artists who contribute to bring the metasite to life, maybe with a sponsor, a DAO, or an NFT collection that can invest in the production. But I want it permissionlessly, and they publish on their own domain name. Xsolla will have some highlighted working links, but we want them hosted on their own domain. And the idea is to have revenue share on blockchain for everybody who contributes to the metasite. Think about a metasite like a movie: each one is created with a group of people, and a second movie with a slightly different group. People who like to work with each other tend to create new series of projects, but they are all independent on their own. Revenue share on blockchain would allow us to create this form of corporation for metasite producers and creators. So Metamor is a place where we want to have people find projects and working co-creators in exchange for royalties. Think about it like freelance job posts, but instead of pay, you have the opportunity to get credits and points meaning a percent of the sale. Blockchain guarantees allow internet strangers to cooperate with each other.

I think that every technology I mentioned already here. The biggest challenges right now are coordination and alignment. If I would build a company except if we call XLA, if those metasites were to be a company, it's much easier to build, I've done this before, it's centralized. But I naively attempt to create XLA as a hub for people to come together and build this, because I don't want to own it, it's impossible to own the internet. The biggest challenges are coordination outside of traditional corporations, I would say.