Yuga Labs CEO talks Web 3 Gaming, Metaverse and Music

If we start creating gaming experiences, not only do we satisfy our existing community, but we can also give a window of exposure to web 2 gamers so they can see what the value of web 3 is. And I can tell you, once a web 2 player sees what you can do with web 3—identity and participation in the economy, trading of digital assets amongst players—it's very hard for them to go back to web 2.

Sure, well first, thanks. It's great to talk to you and to reach out to your listeners and viewers. I've been CEO of Yuga Labs now for the last six months—time flies when you're in web 3, apparently. I came from Activision Blizzard, where I ran the four big Activision Blizzard and King titles: Candy Crush, Call of Duty, World of Warcraft. I saw in Yuga Labs a company that fundamentally cares about innovation and community. At Activision, I thought about the same thing—we care about our players, we care about epic experiences—but there are some fundamental issues in web 2 gaming. You can invest many hours, in some cases thousands of hours on a game, but you can't participate in the economy of a game. As gaming has become much more social, your identity in web 2 games is tied to a specific game, and your social network is walled within that game. I knew that web 3 was fundamentally going to transform gaming, solving for those two points: how can you be part of the economy of a game, and how can your identity and social network port from game to game in an interoperable way? That's why I decided to join Yuga. I met the founders about a year ago, and I said I want to go from gaming into NFTs, and they said interesting because we're going from NFTs into gaming. It was an incredible meeting of the minds, and that's how I ended up going all into web 3 and Yuga Labs.

That's a question I will not answer, because it could either be pompous or embarrassing. But I do play a fair amount of games. At Activision, I had the best job in the world for anyone who plays games because I had to play them and understand them really well. I had a great affinity for Diablo, which is one of the last games I was involved in at Activision. I understand the gaming space very well, and I'm passionate about creating great, epic entertainment experiences. I know web 3 will fundamentally transform how players interact with games.

Of course. There are a number of ways to look at the Yuga Labs world. One, we have CryptoPunks, which are really about art and artistry. We do a lot of partnerships with museums around the world because it's a very collectible piece of art—the true OG in the crypto NFT space. What was revolutionary about Bored Ape was that we essentially gave away all IP rights as part of the purchase of the NFT. The holder can do what they want with the IP, turning IP on its head. My entire career in media and entertainment, you make money by hoarding and holding on to your IP and licensing it in very finite ways. If you go to a traditional media mogul and say, 'Would you give the Mickey Mouse IP to 10,000 holders for them to do whatever they want?' they'd say you're crazy. But what Yuga Labs and Bored Ape Yacht Club did was invert the model, putting the community in control of community-based brand building. That is incredibly powerful. As a result, we have over 900 made-by-Apes businesses—our ape holders who have appropriated their own personal Bored Ape and created a business off of it, from whiskey to beer, water, apparel, restaurants. In the Philippines, there's a Bored Ape hamburger restaurant that was actually very good. If you put the kernel of the idea of the IP and the community builds it together, it really is that next generation of brand building and UGC coming together. That's what made the Bored Ape Yacht Club truly unique and built a multi-billion dollar brand based on community collaboration.

Sure. As I mentioned, our holders are everywhere around the world—Dubai, Singapore, the United States, Europe. Their demographic tends to skew younger, early to mid-20s to early to mid-30s, very digitally savvy, and they understand web 3 inside out. If you understand web 3, you also likely understand gaming well. So we said, if you are one of our holders, we want to create experiences where you can continue to connect with other community members. The first experience that makes the most sense after art is gaming, because there's a strong correlation with our user base and the gamer user base. That's at the core of keeping our community connected and engaged. But it's also our way of expanding the adoption of web 3. Our mission is building culture on the blockchain for everyone in the world. Using web 3 is still very complicated, so the barriers to entry are high. If we start creating gaming experiences, not only do we satisfy our existing community, but we can also give a window of exposure to web 2 gamers so they can see the value of web 3. Once a web 2 player sees what you can do with web 3—identity and participation in the economy, trading digital assets—it's very hard for them to go back to web 2. That's why I'm so passionate about what we're doing. It's been disruptive in art, it's going to be disruptive in gaming, and this is why we're at the forefront. It's going to be disruptive in music and vertical after vertical.

The reality is the world is developing in very different ways. If you go to Asia Pacific—Korea, Singapore, Hong Kong—the level of excitement and enthusiasm from crypto enthusiasts, investors, and even government and regulators to help spur this industry along is far ahead of many other places, particularly the United States where I'm based. The level of enthusiasm for Bored Ape Yacht Club or CryptoPunks is tremendous. I had the pleasure in every city I go to meet with our holders, and the passion for crypto and our franchises is astounding. It will happen here in the United States too. The regulatory environment here can be seen as murky, but they will see the light and recognize that this is not going away. You can regulate it in the right way, looking at examples elsewhere, and be a center of innovation. This industry is going to evolve in ways we never imagined. It never would have occurred to me that by our holders owning an NFT, they would create all these businesses, but it makes sense. Entrepreneurs and ownership is a recipe for tremendous innovation.

We recently acquired a company called Roar Studios, which was at the forefront of web 3 music innovation. The CEO of Roar Studios has now taken over as the general manager of Otherside, and he's developing great experiences. Not only will all our digital engagement experiences for Yuga Labs reside on Otherside, but also how do we bring a level of music and music interactivity that can play in a whole host of different ways. A lot of the tech that Roar Studios had is going to be incorporated into Otherside. I'm not going to reveal exactly what we're doing, but we are going to awe and amaze our community as we've historically done.

First, the way I look at it is, I want Yuga Labs to be for web 3 what AOL was to the internet. In the early days of the internet, it was very complicated to get on. But with a common, easy platform where you create experiences without even realizing you're on the internet, that's how the internet really exploded. I see that happening in web 3. We're still far away because it is complicated, but there's a lot of money going into infrastructure. We're developing unique experiences that bring new members in without them realizing they're participating in web 3. Gaming is a good entry point, and music would also be one. My expectation is that it's going to take time. The internet took a good four or five years to really take off. It will take some time for us as an industry to get to hundreds of millions in scale, but it will happen. My conviction on this is just like my conviction of the internet in the early days. I was involved in bringing AOL to Europe in 1994, peer-to-peer music sharing with Napster, and the evolution of mobile when I was at Google launching the Android operating system. That level of conviction is what I have now with web 3. Once you experience it, you wonder how you would ever go back to a web 2 experience.

Over and over again, in every industry, it's a roller coaster ride from froth to desert lands and back to froth. The companies that survive are not necessarily the ones who save money—obviously you don't want to run out of cash, that's a death knell—but the companies who do well are those who are very clear on the value proposition. If it's a consumer-oriented business, focus on the consumer and why they really want your product. You'll weather the storm, and when things inevitably come back up, you'll have the affinity with your community, the brand reputation, and you'll come out even stronger. That's why we as a company are so focused on the long term. There have been companies that take shortcuts to dupe consumers into dishing out money, and they're left with a bad taste. Yuga Labs is in it for the long term. We fundamentally care about our holders, the experiences, and staying true to long-term engagement. That's how we've been able to differentiate in this market. We hold ourselves to a very high standard, and we know we'll be much stronger coming out of this.

One of the first things I said to the team and our board when I joined as CEO was that we have to be an international company because our holders are everywhere around the world. We hold every year our ApeFest event that brings all our community members together. We've done the first two in the United States, and November 3rd through the 5th we're doing in Hong Kong this year because I knew we needed to be much more present physically and in supporting our holders and made-by-Apes and CryptoPunks and Meebits holders everywhere in Asia Pacific. That's why I've been spending so much time there. The Middle East is an incredibly important region for us. We have a lot of holders there, the region is incredibly innovative and forward-thinking, and we want to help shape the future of this industry with that mindset. You can expect that I will be spending a lot of my time in the Middle East in early 2024.

Wonderful. And as I said, you'll see me in the region very, very soon. Thank you.