The Tim Ferriss Show: Carving a Niche in Play-to-Earn Gaming with Yield Guild Games
In this podcast, Tim Ferriss, Chris Dixon, and Naval Ravikant discuss the explosive growth of Axie Infinity and how YGG is making NFT gaming accessible to emerging markets.
Often ranked the #1 business podcast across all of Apple Podcasts , the Tim Ferriss Show invites world-class performers in industries like health, tech and finance to share their experiences and insights. It was the first business interview podcast to reach 100 million downloads, surpassing 700 million downloads as of today.
Hosted by the man himself, Ferriss is an American entrepreneur who was listed as one of Fast Company’s “Most Innovative Business People” and Fortune’s “40 under 40.” He is an early-stage technology investor and advisor for Uber, Facebook, Shopify, Duolingo, and Alibaba, along with 50 other companies. He is also the author of five #1 New York Times and Wall Street Journal bestsellers, including “The 4-Hour Workweek” and “Tools of Titans: The Tactics, Routines, and Habits of Billionaires, Icons, and World-Class Performers.”
Chris Dixon is a general partner at Andreessen Horowitz, where he has been a seed and venture-stage investor for the past six years. Chris notably co-founded and served as the CEO of two startups, SiteAdvisor and Hunch. SiteAdvisor was an internet security company that was acquired by McAfee in 2006 for US$74 million, while Hunch was a recommendation technology company that was acquired by eBay in 2011 for US$80 million. Chris also co-founded the seed venture fund Founder Collective.
Naval Ravikant is the co-founder and chairman of AngelList, which provides professional fundraising tools for high-quality startups and investors. As an angel investor, Naval has invested in more than 100 companies, such as Twitter, Uber, Notion, Opendoor, Postmates and Wish.
In this episode of The Tim Ferriss Show, the group discuss Web3 gaming and how it acts as a bridge for the non-crypto native. They compare traditional games to Axie Infinity, which is pioneering utility-based NFTs. They also talk about Yield Guild Games (YGG), which has helped to make NFT games accessible to people in the Philippines and beyond.
The following is an excerpt from the discussion. Listen to the full podcast here.
Tim Ferriss (55:45): I’d love, Chris, for you to talk a little bit more about gaming, because I think NFTs in the gaming context are easily understood by a lot of folks, even if they don’t play games. But a lot of the applications make sense to me.
So, I mean, you could talk about anything you want, right? I mean, Sorare is kind of interesting, but I think even more interesting — not necessarily more interesting, but there’s been talk, and I think some of this might be kind of bright-eyed, bushy-tailed idealism, but the possibility of, say, a universal basic income. When we look at, let’s say something like YGG. Or could you just speak a little bit to that and what that means? Because it’s so interesting to me, and interesting is a lazy adjective. It’s eye-opening and exciting.
Chris Dixon (56:31): What’s the model today in video games? The dominant model with video games is interesting because there have been new ways of technology, but the old way still exists. So the old way to buy a video game with something like Madden — you pay $60 or whatever it costs these days — that’s still around, that business is still around. There are companies like EA that do that.
But then you had, layered on top of it, all these kinds of new, more modern — what I think of more modern — companies and probably the best ones are things like Fortnite and Supercell, Clash Royale and League of Legends. And these are basically the models they use if the game is completely free. You can play completely forever. And the only thing you buy is cosmetic goods. And so you can’t buy goods that make you win because people think that would kind of undermine the integrity of the game. So it’s all just to look cool, status flex. And that’s a $40-billion-a-year industry, just the virtual goods alone.
And this, by the way, the same thing is going on with NFTs. It was laughed at 10 years ago, 15 years ago. It was a big joke, and of course, it wasn’t, and it’s very important. But those virtual goods are kind of locked into the game, right? And also when you buy virtual goods, all the money is going to the company.
So what games like Axie Infinity were investors in, one of these kinds of new crypto games, is instead of it being, you buy the goods from the company, it’s much more peer to peer. It’s much more the way of eBay and Craigslist — you’re buying it from another person who themselves were able to basically improve the NFT by playing the game, right? And so you basically, like in the case of Axie Infinity, you have something in the order of a hundred thousand people, many of whom are in the Philippines, making a living playing that game.
And so they go and they do a bunch of different stuff and kind of people call it grinding. You kind of play a bunch of stuff, and then they may improve the NFTs. And then other people who maybe have more money than time buy them from them, right? And the company only takes, like, I think it’s like a three percent take rate or something, as opposed to much more like a marketplace kind of fee, as opposed to taking all the money.
The protocol takes lower fees, but in exchange, you’ve got this really kind of cool, vibrant economy. And so basically, Axie really kind of broke out. I think it’s one of the four games that have 800,000 — which is the max — Discord users. The game has like two million-ish active users, like a very, very popular game. By the way, it’s not in any of the app stores because Apple and Google are trying to fight Web3 with bans and yet they still have that kind of user base. And I think Axie Infinity is probably the thing that really inspired a lot of people.
YGG is a separate company, which we’re actually also investors in, which is Yield Guild Games, and it’s very cool. It’s what we call a DAO, but it’s essentially an online software kind of organization where people can essentially get loaned Axies, so they can go play it and not have to pay the upfront costs, and then earn money. So it’s this kind of guild model that you have in games where people get together and join on the same team, but suddenly you can have sort of real money involved and people make real livings. And so I think that in the games industry, a lot of the next generation of talent saw this and we’re excited.
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