X.LA: Part 2 – Building Revenue Distribution for IP Creators and Owners with Shurick Agapitov

If you think about today's gig economy, when Uber drivers can participate and drive on their own terms, I believe in the future a very high level job could be available with a similar model but with rewards and revenue share. You can imagine somebody who sits inside Disney creating characters today, maybe has a good salary and compensation. They might contribute and create a character for an indie project, like a video game or animation, for a five percent revenue share or royalties. For entrepreneurs creating games without a budget or funding, they may be willing to give five percent revenue share. In that case, the entrepreneurs get the super talent from Disney who created legendary characters. The creator has the opportunity to get royalties, which we don't have inside Disney. As a great company, however, giving royalties to employees is impossible because they have a fiduciary responsibility to shareholders to maximize revenue as a public company.

Here's my coffee, thank you.

So what I believe is people will, like I mentioned, Disney character creatives could contribute over their lifetime and build a portfolio of revenue streams. Some will be very successful, some not, but ultimately it's up to them because they get rewarded for the performance of the character they create. They can choose what project to contribute to, and because it's a revenue share, not shares, it's really important — it creates an additional revenue stream on a monthly or even daily basis, unlike stocks or tokens where you have to choose when to sell. With a five percent of sales, it just keeps coming every day. You can easily imagine building a portfolio of those revenue shares, even passing them to future generations. Our blockchain would allow us to do that and execute it. In a way, internet strangers can trust each other without having to like each other. You can easily imagine that this is the revenge of blockchain, the next wave of Web3 iteration, which I think is very important.

I believe gamers will learn. A lot of gamers learn how to admin a PC just because they want to play games. My 12-year-old daughter plays games at school, and school doesn't allow it, so she had to learn how to install a VPN and what a VPN is. Games always crashed, never worked perfectly — but that's how gamers and kids become confident computer users because of video games. And I'm pretty sure mass adoption will happen with gamers. You can easily imagine people playing video games, having items that go to a custodian wallet, and when they have the opportunity to upgrade and move their items to MetaMask, which is one step more advanced than an in-game wallet, and then from MetaMask to a Ledger, which is another step to become blockchain power users. I can imagine how games could onboard billions of users through digital items. The challenge here is alignment: games want to keep users inside; they don't want them to leave to MetaMask because on MetaMask they can discover other games. And MetaMask doesn't want users to go to Ledger because on Ledger there are other ways to monetize users. Those alignments could be solved with revenue share on the back end. Imagine MetaMask paying revenue to video games that help educate users. What we're trying to build with XLA is to create items and give them away to gamers. Those who accept the items also get the user, and we want item creators and distributors to get referrals, all built on blockchain. It's complex, but because it's on blockchain, everybody trusts it — no monthly reconciliation, it works as programmed. You can easily imagine the Ledger paying revenue share to MetaMask users who help upgrade users to the next level. Massive alignment can be solved with revenue share and blockchain. Unlike equity and tokens, you don't have to worry about how the CEO manages expenses; you get a percentage of revenues. You don't need to think about when to sell stock or exit; it's just a common revenue stream. That's the idea. The biggest challenges are coordination. Coordination inside one entity is a challenge, but coordination among people on the internet is even more challenging. It's not quite what I wanted it to be yet, but people can subscribe on the XLA emails. We're going to have those metaverse opportunities, and hopefully people will find a way to earn. As with anything in the crypto world, early participation is very rewarding because at first it's easier to acquire customers, and it gets harder later on. I feel like everything's at the pinnacle of taking off. I'm already there; I just have a hard time communicating that with the world. Thank you for having me, it's a pleasure.

As I mentioned, I can talk about my business all day long. Can I just get the coffee? I just get warm up, no problem.

Everything we do in Metamor and Multiverse is trying to help people find the opportunity to co-create. Imagine some IP exists in Hollywood that is not the top but has its own niche. I'm a big fan of Highlander, for example. Imagine the creators of that show would be open to allowing the community to co-create and expand the universe. Developers and artists could create characters, sketches, 3D items, and more. The community does that anyway, but they don't have the opportunity to earn money, and it's a gray area because they do it without permission. So we take that IP and allow the community to co-create — not just fan art, but every piece of the concept. They can create NFTs, 3D items for video games, meta sites, new episodes, scripts, and more. Because there can be multiple creators on the internet with different visions, some good, some not acceptable for the IP owner. Those whose creations are accepted enter the official Multiverse partnership. It's like the concept of the Multiverse in Loki or Spider-Man — different universes coming together. I believe the internet is full of talented people with ideas and their own vision; some can be surprisingly good. You cannot compete with the creativity of your own fans. For the IP holder, it's an opportunity to rejuvenate the IP, create more interest, and monetize it through NFTs, meta sites, in-game items. We can help add those items to Fortnite or Roblox, create Snapchat lenses, YouTube content, and many other things. Because different users have different paths, that's the concept of Multiverse. It becomes complicated, so alignment on revenue share again makes total sense. You contribute to different TV shows, and as a creator of characters, you can contribute to different stories and IPs. If you're a 3D artist, you can create characters based on books and contribute to multiple projects, building a portfolio of revenue. For IP owners, they open up to the Multiverse idea, approve creators they like, and share revenue. Blockchain guarantees this. Previously it was impossible because transactions were expensive, but now with technology, users can spend $10 on something and distribute to 100 people.

Yeah, and what is content today is also broadly accelerating and expanding. Imagine your favorite TV show, like Succession. Somebody out there could create a Snapchat filter or AI filter where you and I get inside a scene of Succession. Fans would spend 99 cents to create an Instagram post like 'I'm inside the show.' That's digital content, downloadable content. It could be fun, and while it needs to be approved by the IP owner, it's easy to approve but hard to coordinate and produce. So I'm trying to create a system where once we have a streamlined approval process, creators can work with legendary IPs from anywhere.

Yes, we are actively talking with some IP owners and producers. I find a lot of digital item production these days. I think we're stuck with digital items, but in the future there will be an abundance of digital items, even if they don't have utility inside games yet. They will be digital memorabilia. Everywhere you go, you'll be offered to get digital items. For us and for wallets, it's a way to acquire users. We're also going to release a few meta sites with brands and IPs that will help us develop them. We have a developer studio inside, and we create one for them, one for us — one for the brand, one for the IP we are passionate about, not just commercial projects. I can't name exact names now, but subscribe to Xsolla updates. Essentially, we help create and distribute digital items, and we hope brands and IP holders create meta sites. That's my focus. My goal is that next time we talk, in a few months, I can show you a link to walk through a city or his items, and you can experience it yourself and claim an NFT or digital item with whatever wallet you have. Because of this interview, we want to make our items 3D by default, not flat NFTs. We come from video games and have connections, so we want to give away items. Think of items like cookies for the new internet. Every site you visit, you will be offered to accept an NFT. You can accept or not, and that NFT in your profile will show everyone on the internet your values and interests, and we can offer utility to holders — airdrops, discounts, or identification. So you'll get an abundance of items everywhere — in virtual worlds, websites, real world — you'll collect them, and that's a way to communicate with users and pay them for their attention. Imagine watching the Super Bowl, you get a drop from Heineken. If you don't drink Heineken, you can pass it to a friend or sell it on a marketplace. Whoever has the Heineken NFT can redeem a beer at a supermarket. That's how people get paid for their attention with items that are more interesting than any loyalty program or cookies. You can accept, sell, keep, trade, or collect them. That's what we're working on. If you subscribe to XLA, we'll send out some items.

As I mentioned, in the metaverse there are three opportunities: spaces, items, and wallets. With the upcoming show at GDC (Game Developers Conference in San Francisco in two weeks), we're going to introduce a merchant character — a grandma we call Babka, who is a metaverse merchant and trusted guide who stores items. Babka has a cat named Nushi (like sushi). We'll debut there. Follow us for news from San Francisco. We're creating items; we'd love to create an item with your microphone — if you send a picture of your microphone and logo, we'll make a 3D item and distribute it with your permission, maybe with revenue tied to it on blockchain. The meta sites, we have several that will be available in the coming months. Stay tuned. There will be challenges because it's heavy cloud computation, and like early games, they never release on time. It's hard to say which exact meta site will be released first, but we have dozens in production with IP partners. We haven't even started XLA or Xsolla World yet. We're thinking about creating meta sites for our customers and towns. So those three things: that's what the metaverse is in my definition, and we're working on all three of them.