James Zhang + Jon Radoff talk NFTs, Digital Collectibles, Games, Art, Blockchain, Frank Miller

James Zhang: So if a concert artist, like the manual chrue, who worked on all of the Star Wars movies and ready player one, when he finished that digital art, he said, this is my one of one that he can sell in super rare. That is suddenly worth money. Whereas before, your JPEG was as good as mine. That is disruptive for the individual artists.

James Zhang: James Zeng sits down with Jon Radoff for a fireside chat about the Metaverse.

James Zhang: James is an experience executive and advisor in the gaming and tech sector. He is the founder and CEO of Concept Art House, a leading creative service company for the gaming industry. With over 20 years of experience in games and tech. Let's jump into the conversation.

Jon Radoff: James, so awesome to have you. This is a momentous week to have you as well. There has been some news. And I can't wait to tell everyone. We are going to talk about NFTs and digital collectibles are games with NFTs. We are going to cover all of that today. But we can't miss the recent news with you.

James Zhang: So, Concept Art House, what's going on?

James Zhang: Hey, John. Great to be here. You just hit on all my favorite things. Nonstop.

James Zhang: We just raised a $25 million series A, which is a great race for us by Dapper Rob. Fabric, who backed the Axi Infinity and Animoca Brands, Gallagher Games and a whole bunch of other great people.

Jon Radoff: That's a legit race. So, what's $25 million going to help you do? What's the vision?

James Zhang: Well, we're in the middle of a choir company right now. Which is exciting. We have a blockbuster title. It's a huge sports brand. And we have a bunch of other projects that we're excited. It's growth, man. I tend to spend about 15 of that 25 in the next year or so. So, this is an exciting, exciting race right now.

Jon Radoff: Yeah. So, you've, I think a lot of people have heard about Concept Art House due to some of the recent work with Frank Miller. And by the way, like, I didn't buy this in City Collector's Edition just for this interview. Like, that's been on my shelf for quite a long time. So, like, consider me a super fan of what you're doing over there. Like, that's awesome. I can't afford some of this stuff that you're selling with Frank Miller. But I'm going to say something cool.

James Zhang: Very cool. Sign by frame.

Jon Radoff: All right. All right.

James Zhang: I'm not going to say no to that. But so, tell people about that.

Jon Radoff: Because I think people can react with that because he is.

James Zhang: Yeah.

James Zhang: Yeah. Well, so my company is Concept Art House. We raised money behind our new division crypto art house. Concept Art House has been making art for a long time. 13 years, man. We've helped ship by my account over a thousand games. Right. So, we've been creating digital art for years and years and years. When we saw the NFT space happening like around January this year, everybody wanted art. So, very exciting for us. But we wanted to do something that was going to honor well artists. And I like you. I've been a long time fan of Frank Miller. We're reading a dark night returns, life changing. Anyways, just so happened. And we're going to talk about NFTs, right? But you think about what Frank has meant to comment books. I mean, he's a guy that made Batman dark.

James Zhang: Like, he's he's a writer and an artist.

James Zhang: And he's one of the few IP holders at home 300 in Sin City. So, we were really honored when he chose us to help him. Like more known in the digital universe that we live in today. So, our NFT collection was like honoring Frank and his legacy. So, every piece he had to approve of in many cases, we took his personal art and digitized it. So, it could be an authentic NFT. And it paid off. So, we had an FTA made a little bit of news. We have one unique one of one. It's a key moment called I love you Nancy Callahan that sold for $840,000. And that's with our partners at Gallagher Games. Yeah. It's very cool. It's like a moment come to life from his work.

Jon Radoff: James, I've got to imagine that part of how you connected with someone like him really just must come from the authenticity of your company. You, you're an artist. And you weren't someone who just like swooped into NFTs and like cut a licensing deal. Like, you've been at this for a while. Could we just maybe take a moment to let everybody know like a little bit of your personal story coming into this?

James Zhang: Oh, thanks John.

James Zhang: Well, so I'm 45 years old and for over 40 of those years I've been drawing.

James Zhang: So, I am a contest artist. I started my career at LucasArts. I did a ton of games back in the early days. PlayStation 2. So I was doing space ships, monsters, aliens. I, I keep some of this near me to remind like I still do art. But, but yeah, I was a successful concept artist for the first five years of my career. And, you know, I mean, I was a geek before that. So yeah, I have my friend, my like my comic collection. Pretty much all the things I was the most passionate on D&D video games. I got to work on as an artist. And, uh, and hopefully we didn't lose our soul all along the way as we scaled up an art company. We're now I employ like 80 artists, right?

James Zhang: So.

Jon Radoff: This is a pretty amazing time to be an artist within NFTs and the collection economies that are happening. Like what's going on here? Because it used to be, I mean, just. I mean, I, I think if you look back a few years ago, like art would be for a lot of studios. I'm not saying the ones that were your customers because they were a little bit smarter than average, I think. But for a lot of, for a lot of game studios is like, farm it out to the cheapest place in the world to just get it done as a machine. Yeah, but everything is changing and practically real time over the last year with art and collectibles and stuff.

James Zhang: What, what is the change?

James Zhang: Uh, that's a huge question. Like the field of art, there's so many sectors and pieces. So I can talk about things as a concept artist, as a fine artist, and as an entrepreneur in game space. And there's a convergence of several different pieces. For anybody that's operating a game or running a game or part of a game studio, you know what I'm talking about. The art is a premium. Look at how many times a word metaverse comes up. All of that metaverse, almost all of those metaverses featured digital art, but somebody has to make. As far as I know, there's no AI can't draw just quite yet. That's a lot of work for commercial artists and fine art, commercial artists and concept artists. NFTs is revolutionizing fine art, obviously. Why? Because for the first time ever, you have digital scarcity. And for the people who recently knew that may be watching, what does that mean? Well, is this simple? When I started as a concept artist, I would draw with markers. Right? I'm designing your next favorite spaceship that might be featured in a movie, in a video game. But when I finish, I have the original piece of art. That belongs to me, right? Or if I do a piece of art from Magic to Gathering, most of the artists from Magic, when they started, were oil painters. So you sell the rights to Hasbro and they make the cards. But if you have the oil painting of Black Lotus, that's what the ton of money. That's a unique one-on-one. Now, because of like, waycom tablets and Photoshop, nobody really, like 95% of your artists in commercial space and concept art are doing digital art. But that means when that image is finished, it's a file. So John, your file and my file is the same thing.

James Zhang: With blockchain, that's different.

James Zhang: So if a concept artist, like the manual Shreya, who worked on all of the Star Wars movies and Ready Player One, when he finished that digital art, he said, this is my one-on-one that he can sell in super rare. That is suddenly worth money. Whereas before, your JPEG was as good as mine. That is disruptive for the individual artists.

Jon Radoff: That seems like a completely new, incentive structure, new way of compensating, creating wealth for artists. If you look at the game industry generally, right? Like, there's a few tried and true business models. But usually it comes down to either revenue participation, like royalty participation, which all depends on the deal between publisher and the game studio, or you can have equity participation. Either way, it's sort of a long process of trickle down before someone like an artist could participate. And either of those, and they probably have to be at the company, at the right time, to really benefit from it. Like, there's a lot of variables where it may or may not work out. It strikes me that, like, this idea of an artist actually retaining like the oil painting or whatever, but also the one-of-one. Like, being able to have that and to decide to part with it if you want.

James Zhang: That's a really interesting opportunity for artists to choose their projects wisely, and then potentially have a lot more upside.

Jon Radoff: Are you seeing that happening with artists?

James Zhang: Of course.

James Zhang: Anybody that's NFTs right now. If you're new to NFTs and you want to get NFTs as an artist or a collector, you should be on Twitter, you should be on Clubhouse, you should feel the energy, and you should see what decisions artists make for themselves in this era. So if you are an artist, by the way, I don't think traditional concept artists as a position is going to go away any time soon. There's a lot of great games that don't have to be on blockchain. There's a lot they're going to experiment, try a little bit of, I'm going to mint this thing in a cell and a super rare foundation. But don't fire me at Lucas, don't fire me at Pixar, I still want to work with you. Because your biggest movie entertainment projects, I mean, look at those credit lists, right? Those are works of art, those movies, animations, games that still require 500 people to have the same vision or 50 people have the same vision. NFTs though create something for the individual artists, if that person is willing to spend the time to commit to the community. And most of the time, if you have 10 hours of work for the day, you need to decide where you want to spend that time. You can be promoted your brand and getting followers on Twitter and buying NFTs just so you can sell the NFTs or you're going to spend time holding your craft of becoming a better artist. Then that's the decision that our future and some current artists are making and will make.

Jon Radoff: So I think you made a couple of really important points and want to return to them. One of them was just the importance of community around these kind of NFT based ecosystems. The other is that NFTs and digital collectible art can have a high level of relevance to games, even if you don't think of yourself as like a blockchain game. Like it could be another avenue for monetization, creating a lot of interesting opportunities for your artists. So that's maybe just something to keep in mind. But you know, when we started this talk and you know, we get a lot of people from the game industry just trying to sort all of this out. Now half that audience was probably like, oh God, NFTs again, I've heard enough about this. But I'm and we thank you for being curious enough to stick with it. I want to kind of talk about NFTs for a little bit because what do you think the biggest misconception of NFTs is just generally speaking?

James Zhang: I think there's a few. First is that it's a scam. You know, it's a scam. It's a JPEG. Why does that JPEG matter?

James Zhang: I was so much money on that.

James Zhang: That's depending on your lens. I have my own lens and I'll let me try to answer that. For people who are shocked that people's peace sold for $69 million. The buyer is one of the buyers interested in that buyer is metacopin, right? He's very savvy. He runs on fun. He collects a lot of NFTs. He believes he's buying into culture. That this is an important piece. It's an important piece of culture in this time. Our lives are becoming more digital. Art is a shaper of society. If you believe that the impressionists, you know, Monet and Remog that their lives matter that they made the world a little better through the art, they believe this Renaissance of art is the next evolution. If you're not an art collector, you probably won't get that. For the audience looking here today, do you collect art? If you collect art, then why wouldn't you collect digital art? It's scarce. It's authentic to the artists. If you don't collect art, then some of the art entities aren't for you. Then there's another group. That's the art collector piece. Something will buy into tea just to make money. Yes, the speculators. Yes, you can make money if you know what you're doing. It is not the intent most of the time, the pure intent of the NFT makers to just make money. They believe they're making authentic product. Because the second if they said, if you buy this, I guarantee you it's going to go open value a thousand percent. This pack of cars cost a thousand dollars. You're going to make ten grand next week. That's an SEC violation. Congratulations. You're not going to get arrested. It's supposed to be, this is really cool. Do you want to participate in my project? People will sign value to it. It's a different thing. Now you're talking about sports collectibles. There are people that want to buy NFTs to make money. There are people that want to buy art and culture. And by the way, the reason behind that is they want digital prestige and their presence. There's other things too. Not all NFTs have to be ten to thousand dollars. Sometimes people just buy cool stuff.

James Zhang: They want to collect cool stuff.

James Zhang: So yeah, so biggest conception I think is that it's a scam. And that would be really unfair.

Jon Radoff: What do you say to the people that say, well, there's no scarcity. I can just copy all the images that people say to myself, $69 million. What do you say to that? I love that question so much.

James Zhang: So then I would say Google, Tom Brady, rookie car. And you tell me what that piece of cardboard actually costs to make.

James Zhang: It's just I can photocopy it.

James Zhang: I'll bet you I can get a printer to make a car that's just identical. When you put it next to it, it's basically the same thing, but it's not the same thing.

Jon Radoff: Yeah, it's not the real one. And you know it. When you got that copy, you know it that it's not.

James Zhang: It's a cool. That's stupid. John, check out this photocopy of Tom Brady that I just got. You're like, what? You spent a dollar. But if I told you I have the vision to bet on Tom Brady before I knew he's going to get. He was a six-round draft pick and I have that card. Like that means you either pay. I paid a lot of money for it or I had the vision that Tom Brady was going to be a hall of fame one day. Right now it's a different.

James Zhang: So it's it is.

James Zhang: Yeah, it is. Stamp collecting same thing. You either have that collecting gene or you don't. So. So yes, your JPEG can be as good as mine. But if I go on this tribute ledger that everybody can look at. If I go in your open sea wallet and I find out that this image you use that your profile doesn't actually belong to you. I will slam you on Twitter and no one's going to listen to you. You are taking credit for somebody else's work. You know.

Jon Radoff: Now, why can't I know some some big game publisher just do this and and they'll custody everything for me and they can sell me digital artworks. Save me all these gas fees and stuff like. What's. Why does it need to be a blockchain application to actually do this kind of collecting. I don't know. I'm asking you the questions that people. Yeah, what is. I'm not understanding.

James Zhang: Oh, dude, it's well, I'll tell you I'm going to quote our our friend Kevin shoot founder Rally and forte. I'm. This technology for the first time can align the players interests with the developer interests and that piece is unique.

Jon Radoff: You're coming back to community again. I'm coming back to community. Let's talk about that. So earlier you were talking about just how important it is to have community. I see one of the really interesting things out there is just. It's much closer connection between the creator and the community of fans that they have for particular piece of art or a game or whatever it is that they're making like. How should people be thinking about community if they're thinking about entering into this market, whether they're an artist or a project. How do you think about community even.

James Zhang: Communities so key to and I mean, it's really to games too. Or I think your gaming communities rally around fun competition. There's another layer in the NFT or blockchain game community that rallies around fun competition, but also value and money. I think it's very hard for you to have a successful blockchain game product or NFT experience without being authentic to that community. It's, you know, it's not a most of your successful NFT drops. If you look and you search the team, look at the team, follow the team, you'll find most of them collect NFTs. They have to contribute to this space. Otherwise, they're seen as just takers. You know, hey, you guys buy my million on NFT, buy my next million on NFT. But if I'm not contributing to the ecosystem and I'm not empowering artists and I'm not buying your NFTs, why would you support mine? Right. I mean, the reason Axi Infinity has the kind of fan base they have and NBA top shots has the fan base they have. Look at the network value. The company only retains a small percentage of the value that game has created. Majority of the value is given back to the players. What a huge disruptive consent.

Jon Radoff: Completely different, right? Yeah. And really all the market, like if you think of the art gallery market, for example, like I think art galleries capture 80, 90% of the value of fine art transactions. And then you've got games, like look at how much games keep, whether it's the publisher or the studio or whatever. That was the really interesting innovation around some of these NFTs games, like, yeah, he is just the idea that they actually are only capturing 5%. And then they're allowing the recirculation of that capital within their community of fans.

James Zhang: Absolutely. You know, I'll go a step further and for, you know, my, I have a good group of friends that I hang out with, talk about this stuff and when they're new into it, I use Facebook as an example. I mean, John, you and I chat on Facebook messenger now and then we form news articles, connect with our friends. I haven't gotten a check from Facebook yet, but I feel like I feel like I'm going to be in the middle of my head. No, they, you know, who made Facebook into this, you know, giant? What we did. We did quite a good enough service for us to use it over and over and it looks free, but our attention is highly valuable. Blockchain has a chance to disrupt that. Facebook credit. What if you got one share of Facebook for every hundred posts? I mean, that changes things, doesn't it? So the promise of blockchain is heading towards that direction. Of course, massive options far behind. Of course, there's huge challenges. Then imagine a gaming community that's incentivized for playing a game. Wow. Right? And artists community too. You know, one of, you know, I'm jumping on a little bit, but it's the core theme here is if you incentivize the community, this is where it's been going. You and I use a word creator economy, right? That's huge. That is huge. It should be that way.

Jon Radoff: Yeah, part of this. So here's some stuff that I think we can help people understand about NFTs generally and really how different it is that stuff that came before is we're kind of talking about it around the edges of certain things. It comes down to this idea of programmatic value exchange that's direct between the participants without the middleman. So you just game this example of Facebook, for example, like the reason why we have all these ultra powerful online platforms today is at least partly because everything that came before was really hard to do. Like so they created platforms, drew in a lot of people built really powerful network effects around it. And they simplified connecting with other people, publishing content, all that stuff. So there's a lot of reasons why they exist. So we're now entering into a new phase of the internet, what I think of as one of the key factors of the metaverse just to reuse that term, but it's what I call the re-decentralization of the internet. So the internet was started as a decentralized network, web publishing, the domain name system, that's decentralized, meaning you don't have to ask anyone's permission. You just launch a website. But if you want to participate in any of these really large social networks or you can go down a whole list of things like you really are there based on their permission and what you get to do there is very regulated by them. And you may or may not like even how they regulate it. Like that's a huge thing in the public sphere right now. But what's really cool about blockchain and then smart contracts, which is really the enabling technology that I that I'd like everybody to actually focus on first. The revolution of smart contracts is this idea of two parties can exchange value with each other without like a bank, a brokerage, an art gallery, a game publisher, whatever it is it's in the middle. So that allows what you were talking about earlier, which is a much more community oriented structure where the value creator, the content creator and this creator economy has that relationship without middlemen. I think that just changes everything.

James Zhang: John, you touch on so many things, or man. Yes, we in the blockchain space, you use words like trustless network. What does that mean? Well, it's an exchange of value, right? When there's a famous book, Homeless Abyens about the history of mankind, there are frozen money as the greatest form of trust that humans ever created. Yeah, money. So everybody here knows what that is. My dog doesn't know what it is. I give you 100, you believe it's 100 not 99 not 101, but it's a hundred dollars because it's assessed by the central banks control by the government. Satoshi Yakamura looked at it. Well, what's a different way to create value? What if you and I both believe in a code that shows publicly this exchange of value? It's not to be a really revolutionary idea. So in Google, there's a phrase, don't be evil. If it's code in blockchain, we say you can't be evil. That's a very powerful concept. The second point I want to touch on is when you said about the middleman.

James Zhang: Yeah, so you know the music industry I heard the sound bite and I want to believe it's true. If you're an honest musician right now, for every hundred dollars you generate, what ends up coming to you as a creator is about 12%.

James Zhang: That 80% is agencies middleman. It's all the people that it takes to create this thing, but 12% that's not very much in this. So what's happening through social media, people are now able to create huge fan bases for themselves. If you're a performer, if you're Katie Perry, if you're ninja, right now. And if you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a

Jon Radoff: real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, you're a real artist, gonna do this so you get a Go. You can publish a company for a game that doesn't require that. The marketplaces are already there. And you don't have to have trust at all. Like normally a huge investment that you'd have to make before anyone would buy from you is that trust building. Like that's a huge huge expense, millions, millions, tens of millions of dollars to convince people that you're trustable enough to do that. And even then, who knows if that's going to last? Like the company starts stuff up and shut it down all the time. So the blockchain makes it immutable. It's permanent. It's transparent. You can look at it. You can see that it's really scarce. But then add to that just disruptiveness, like open seas there, for example. Like I don't have to rebuild open sea. Such a huge advantage to anyone who wants to build in markets, like a game that wants to build a virtual economy or someone who just wants to apply their craft of being an artist. Like you can go and do that without having to do a bunch of special deals with online galleries

James Zhang: or whatever it is that you'd normally have to do.

James Zhang: Yeah.

James Zhang: Yeah.

James Zhang: Yeah.

James Zhang: Yeah.

James Zhang: Yeah. Yeah. Community. I think a lot of your blockchain and NFT projects are being promoted through Discord

James Zhang: and Twitter. On that piece, that's all part of the community.

James Zhang: If you have that community, you are going to be ahead in this space. Right now, those are still centralized networks. Maybe there is a decentralized solution for a future Twitter or future discord. We're early in the space. Right now, there are certain things that centralized systems can do better than decentralized systems. The speed it takes, for example. If it's a one organization with good leadership,

James Zhang: they're just going to build some work faster.

James Zhang: But we are really early in this space. I know there is going to be huge projects taking a swing and competing with our established giants of today. The Facebooks, the Twitters. We'll see what happens next.

Jon Radoff: Yeah. So I'm glad you brought up speed and yeah, centralized platforms frequently have just a raw speed advantage. Why? Because it's their database. It doesn't have to have what you do in blockchain, which is replicate copies of it all the time, go through a cryptographic process of updating and whatnot. So that's a critique a lot of people have. And I think, again, people sort of skim the surface and they read blog posts about how inefficient it is, how much energy it uses, how it's pumping out pollutants into the atmosphere. Like that's another critique. And it's an elephant in the room. So we should talk about it a little bit.

James Zhang: What are your thoughts on that?

James Zhang: Well, there's a lot of challenges to the next step of DeFi.

Jon Radoff: It's going to get higher. It's just going to make their coming at this a little bit new.

James Zhang: Yeah. There's going to be a lot of challenges. There's negative press around energy consumption. I'm not going to be a formal expert on this. I know I believe the will of the people and the developers are in the right place. The proof of work system is not a great system. It is wasteful. Most of your modern blockchains that are competing against Ethereum or Ethereum 1 are going to a proof of stake model. And that would include Salana, Flow, Ethereum 2. There will be more environmentally friendly. You will see most of your more sophisticated NFT companies making concerted efforts to buy carbon credits, which hopefully offset any kind of carbon emissions. I know one of our partners, Gala Games, bought a literally a big bottle of forest

James Zhang: because I believe the will of the developers are in the right place.

James Zhang: There's going to be a lot of other challenges along the way, but specific to environment, that's what's currently being developed right now. And everybody sees it. Nobody wants a negative press.

James Zhang: And most people like the earth.

James Zhang: Another challenge. Well, so there's other challenges. There's something I'm seeing in the NFT community. Are we moving from one walled garden of stuff to another walled garden? I don't know if that's worth going into here. Right now, there's a huge competition among protocols and marketplaces for the right content. And there is an Exodus in gaming from traditional gaming going into watching gaming because of how much value is being created. It remains to be seen what happens next. Are these games fun or the intended adjust as money grabs? And you hear about projects where people raise a ton of money behind false promises and go away. And there's a ton of NFT projects from many of them are not experienced developers. These are three, four person teams with an idea.

James Zhang: And they promise this great thing.

James Zhang: Look at my roadmap. You're going to get all this stuff. If you buy this NFT right now, you're going to get a whole game. And then they realize I don't have any other game. You don't hear from developers again. There's some concerns around that.

James Zhang: You know, we will see.

Jon Radoff: So sounds strikingly similar to what we saw on crowdsourcing just a few years ago. A lot of kickstarter games were started that never quite got over the line.

James Zhang: There's a very notable kind of crowdfunded game

Jon Radoff: that raised hundreds of millions of dollars and hasn't quite gotten there yet. So feeding that content look cool, though.

James Zhang: I know we're talking about it. Yeah.

Jon Radoff: You're, though, you've got liquidity. You've got liquidity sooner, right? So you can opt out if you no longer

James Zhang: want to participate in those, which

Jon Radoff: is a little bit different than like fund your game on Kickstarter. I feel like there's more skin in the game all around with these newer funding models around NFTs and building the community around it. But I do think you're right in one particular way, which is it just seems like we're at a fork in the road pretty soon, where a lot of these high-concept things where you can't really identify a super strong team behind it. Those are going to be tougher to persuade. Just in the same way that kickstarter went down the same path. The high-concept stuff without a team without a lot of examples just got harder to do.

James Zhang: So I think there will be some games

Jon Radoff: that have a really cool concept and a team that sounds like they can pull it off. And then there will be AAA kind of style games with amazing visuals. And it'll be any other AAA game that you've ever wanted to buy, except now you'll get to have a part of community ownership in them. I think these things that try to straddle, and it's just like a white paper, and nobody knows who's building it. That sounds like that's going to be a really tough place

James Zhang: to be soon.

James Zhang: Hey, John, you know what? I'm looking at the time. We went this for 30 minutes. Neither one of us have said the word no verse. That's got to be a record. I said no verse. OK, I'm going to say.

Jon Radoff: Well, we can talk about what, why does this seem relate to a metaverse?

James Zhang: Well, when you said that, my first thought

James Zhang: about over-promise and or deliver, I literally think about the metaverse. I might make some people mad by saying no, but, hey, I've been running ours. This time last year, we're juggling 25 projects. Call of duties, pub Gs, Roblox. Roblox has been a great client of ours for three plus years. That is, that's our metaverse of today. Yeah.

James Zhang: But here's a thing.

James Zhang: Metaverse took, I mean, metaverse. Roblox took 20 years to get here, right? And it really was the past five years that they rock into that thing. I mean, I'm reading companies getting like $3 million with funding, building a metaverse. I'm like, $3 million to build a metaverse. What do you want this metaverse to do? I mean, I think Mox Zuckerberg has been hundreds of millions of million metaverse.

Jon Radoff: I think he said he, they just announced the other day, they're spending $10 billion this year. And they expect that to go up next year and year after. That's incredible. Right? That's a lot of capital. Yeah, so I think if you say you're building the metaverse, to me, that's kind of a funny thing to say,

James Zhang: because you're talking about building the internet.

Jon Radoff: Like, so we're all, that's what the metaverse is to me. It's the next generation of the internet with a lot more real time activity. It's re-decentralizing a lot of these creative process. It's simplifying the ability to make real time content in the way that you might find some of these experiences and Roblox. But now it's going to be like publishing a website and you just can do it in it. To me, that's what the metaverse really is. It's a whole collection of trends and technologies that enables this stuff. It's not like a product that checks a few boxes.

James Zhang: Because I don't know how one company could ever do that.

Jon Radoff: Even Facebook with the $10 billion.

James Zhang: And I think they have their own goals around business models and advertising and centralized control

Jon Radoff: that will be the ultimate master for that.

James Zhang: Yeah, I've got to have so many opinions on that. You know, it's wrong.

James Zhang: It's wrong.

James Zhang: You know what I mean? One of our favorite clients over the years, you should try to get on Neil Stevenson, right? I'm going to get on. The guy wrote Stillcrime.

Jon Radoff: The metaverse, man himself.

James Zhang: He created the word metaverse. I love talking to him about his every world he creates is a metaverse. He created the original metaverse. By the way, for anybody watching this, he has told me that he will not public endorse any metaverse because this is the world, you know, which we finally

Jon Radoff: kindly respect. Well, I want to get him on a video now so I can pin him down and say, Neil, can you just raise the internet? It's the internet. Like, you don't have to pick a product.

James Zhang: It's so cool.

James Zhang: So we've worked on like IMVU roadblocks. I mean, Fortnite, my goodness, right? All of these metaverses, they do a specific thing. Most of them aren't sophisticated, not really about true creativity. I don't know if he's been on your show yet, but you should talk to Fredrick about core, right? I think Fredrick is on something. Core looks really cool. And most anybody in gaming is going to know core. Anybody not in gaming, check out core. Man to core games.

Jon Radoff: It's taking unreal engine to try to do like an updated roadblocks.

James Zhang: You can't think of a metaverse as a place where you can do whatever you want. He wants to give you the toolkit for you to create really cool games. And then I can participate in the John game, John can participate in the James game. And the art is curated such that most of the stuff that you create, because the LEGOs themselves are cool, the building box are cool. The end product should look pretty cool. That slider bar is really hard to figure out for the metaverse. Do you want to look good? Or do you want players to have self-expression? Guess what? Most people self-expression aren't that good. We follow our plans for LEGOs, but your thing that you come up with LEGOs usually isn't cool enough to be on a box. So if you want to give people true autonomy and creativity, you've got to be prepared for that world to look like all kinds of crazy stuff. It's not going to look like Ready of Platter 1 or everything is polished and amazing. But if everything is polished and amazing, that's a highly controlled product. Now you're talking about a World of Warcraft game verse, everything is highly rendered, and you have to limit

James Zhang: the creativity.

James Zhang: So just the word metaverse is so loaded. I almost feel like we need to have subcategories, creativity versus entertainment, commerce and meetings versus gaming. It's so hard for me, like you, even 10 billion dollars, to have one metaverse, like Ready of Platter 1, that's

James Zhang: going to roll them all pretty far from that.

James Zhang: Yeah, I don't see that happening.

Jon Radoff: I mean, you raised the topic of interoperability, which is a

James Zhang: super interesting thing to talk about.

Jon Radoff: To me, the interoperability, again, it's the internet. We have interoperability. Like our computers don't have trouble connecting with each other and exchanging information and blockchains can enable transactions of value on the internet. So that's interoperability. Sometimes when people think about interoperability, they have just Ready Player 1 fantasy, which is like everything is just sort of mashed up. And I guess maybe they are in their dream. It's very beautiful or something. But the creative control you just talked about in, say, a world of warcraft. That's a feature of a world of warcraft, not a problem to be solved. Like, oh, we need a world of warcraft to import my random costume. And suddenly, I know we're talking about Miller today. Like I'm Batman in world of warcraft. Not to me, I wouldn't want to see that. Personally, some people probably would, I guess, in fortnight, you can do that because they've kind of designed the ecosystem, which the community accepts that. I mean, what would you add to the interoperability conundrum that people seem to have?

James Zhang: Well, the word interoperability as it pertains to blockchain suggests one product that can accept multiple forms of protocols. So it's only a metaverse that readily accepts assets built on Ethereum, polygomatic flow, Solana. I'm not aware of any metaverse attempting to do this, but I believe it would be the best interest of Coinbase and FT marketplace to accept as many protocols as possible. That shouldn't be confused and will not be confused with a metaverse, but it's at least a marketplace that can be

James Zhang: interoperable.

James Zhang: As I understand it, OpenC is looking to integrate multiple protocols, of course, they should do that.

James Zhang: Rareble today can accept flow and, and of course, ETH.

James Zhang: So that's a step in the right direction. Our interoperability as it pertains to games, no way.

James Zhang: You can't, you want to be a good game.

James Zhang: It's a very controlled artistic product. You can't expect me to bring my LeBron James into a football game, and well, maybe that's almost doable, but you'd have to get permission from EA and write there's a business, there's business challenges with doing that. There's IP licensing rights, challenges to doing that. The most important, there's game function. You know, like NFTs, NFTs are really, it's a code that attaches to a digital asset. That asset may not be welcome in other projects. Absolutely. No, and I think you you did deal with Forte. I think Forte has a tempting interoperability, but make no mistake, you're under the Forte umbrella. Within Forte umbrella, you have an interoperability maybe.

Jon Radoff: Yeah, so you just pointed out a couple of the hard problems of interoperability. One is just the technology, like just getting everything to talk to each other. I mean, just getting the blockchains to talk to each other and do cross chain liquidity or something. That's a tricky problem. And then you've got the issues of different, say, image formats and 3D models and the different poly counts that are appropriate in one environment versus like that's a hard problem. And then there's the design problem, which you kind of described it as fun. That's how I think of it too, right? So you design games for fun and just allowing external entities to try to affect the course of your experience or narrative

James Zhang: by importing things.

Jon Radoff: I actually think it can be done if groups of companies cooperate with each other in their thought process. But it's not going to be like random fantasies of like, wow, now allows me to import my League of Legends costume or something. And then the third is economic alignment, right? So another reason they won't do that is not just fun. It's like, what is their economic incentive for even wanting to permit that? That's another hard problem.

James Zhang: So you have to tackle all of those before you can pull off

Jon Radoff: any kind of interoperability. I think there'll be new kinds of game companies

James Zhang: that you're so good at this, man. You and I, we both support a game that just for a long time.

James Zhang: I welcome the heaviest conversation

James Zhang: of any of your developers that are part of your audience. This is really key stuff. And I was literally talking with the multi-billion dollar mobile game studio yesterday about what that means. If I'm a multi-billion dollar mobile game studio, what can NFTs do for me? And we talked about that. Well, more you can't expect that, oh, NFTs make money. Can we take the candy crush and add NFTs to it? It actually doesn't work like that. We went on this whole explorer of really solid MMOG. Can we add an NFT layer? And two days of discussions, it's not that easy. You were going to make a lot of people mad if you artificially insert a different economy into one that's already proven in this fanbase. You're much better to start a build from scratch, the NFT or blockchain enabled economy in your game that the just artificially insert one. I haven't heard anybody successfully doing that yet.

Jon Radoff: Yeah, I think the big publishers are going to be challenging on a couple of fronts. One is just what you were describing, which is, it's not, I think they're a super compelling use cases for NFTs, but it's sort of like free to play was years ago. Free to play has a lot of opportunity around it. 10 years ago, I remember being part of the early free to play revolution and people were always telling me that that's not like real games and all these reasons not to do it, of course, now it's over half the industry. And when a lot of companies were starting to take baby steps at it, their initial instinct was, well, can we add a free to play element on top of some existing game we've got? There actually was one or two interesting cases where someone navigated that successfully. I think one really interesting, one was like turbine figured that out with their dungeons and dragons online game. But like, boy, was that the exception that proves the rule? Because almost no one figured out how to make that leap. Everybody had to kind of build games up where that economic structure was built into the earliest stages of design. I think it'll be the same thing with these open marketplace space games.

James Zhang: We'll see, anyway. I'm not a cracker, man. I think, you know, by the way, I worked on that. I did armor for D&D Online. That's old. You go way back. I do see, because our name is Concertor, our house, and Cryptor, our house, we do see a lot of projects before the rest of the world does. We're looking at least four concerted after to make AAA blockchain games. Some of those have been announced. If you care about the space, if you're a developer, you came from AAA and you're like, huh, I hear NFTs or hot, maybe I should pivot that way. The time studio is made of Bet, Phantom Galaxy is made of Bet. There's a few other studios making that bet right now. It is a challenge, because any developer and along that mid-tier, like if you're a billion dollar gaming company, it's going to be hard to pivot, right? You have shareholders, you have massive revenues, you have to hit. If you're in that middle-sized company, you have $20 million revenue, and you're making $5 million in profit, what are you going to do to keep that business going, and then still explore NFTs? I could really willing to walk away from $20 million revenue and $5 profit to go into NFTs.

James Zhang: That's a tough swing for a lot of developers.

James Zhang: And then some people are like, well, Axi's a really silly game, and NBA, it's just a collector's thing, and I see some other very basic free-to-play games, and hearthstone is prettier, and more sophisticated than some of the other TCG blockchain games. We're early, guys. We're super early. I think for everybody right now, I can talk more about that. I don't know.

Jon Radoff: I think he just said, he's what I thought the really great innovation of Hearthstone was, they reconceptualized the collectible card game as a digital product. They didn't just transport the same exact game play modes. They actually used computing to automate and do a lot of processes that normally would have just been annoying if you imported a lot. So I think this is a reconceptualization process. Here's my big takeaway for anybody who's stuck through most of this conversation, and then we can kind of wrap it up. My own message is, I really think that this is a market that you have to approach with a lot of curiosity, and just get rid of some of these preconceived notions. This is a lot of ways like free to play over again, like the economies, the game structures, the communities. It's going to be all the rules of this are being written right now, and people are figuring it out. And there will be some game systems that are not even really imagined currently. People just got to get out and start experimenting with this. It really is potentially transformative

James Zhang: and new.

Jon Radoff: Let go of some of those biases and the technologies improving to address the ecological concerns, which I'm concerned about too. In fact, the technology is already there. You just can choose to use a layer two solution for ETH or Solana or any of these other blockchains. But just approach it with a lot of curiosity and imagination is kind of my message to anybody considering building a game in this space. What are your thoughts, James? Do you feel free to add to that or what do you want just to know about this market that we have?

James Zhang: John, I love what you said about curiosity.

James Zhang: I love what you said about risk and curiosity.

James Zhang: And crypto market does reward the bold. Your early crypto millionaires today are seen as, oh my god, your pioneers. You back Bitcoin in 2012, you're seen as smart. In 2012, you were seen as stupid. Yeah, so I appreciated. We're gonna take some risks. We think they're calculated risk. And yeah, there's a lot of excitement. So my one thing I want to share with everyone and I'm gonna quote, it was God the Heads of our Bizarre Boards, Vinny Langham. He's a founder, civic, early backer, Salana. He's like, he's on short tank South Africa. He's one of these early pioneers in blockchain. I remember meeting him at Bitcoin Miami and we were hanged out by the poor. And he says, James, you know, I've been in crypto for 2012, 2013. You gotta do the South African accent, you know, look around, we're gonna make Bitcoin Miami. There's 50,000 people here. No, one person here knows more than 5% of what's going on. I'm like, wow. Like that sound by it really stuck with me. Here's this guy who's been in Bitcoin for 10 years, who's legit back the space in some of the hottest projects, telling me he, not just himself, but he doesn't know anyone that knows more than 5% of what's going on. We're talking about trillions of dollar disruption in the space right now. And that window is not. So you're not, if you're thinking about the space, you're not early, but you're not late either. Right, this is huge. So yeah, and a lot of ways it's like internet,

Jon Radoff: circa 2000, like everyone had already built like the first way of the stuff.

James Zhang: Amazon existed, but like the whole future is ahead of us.

Jon Radoff: Most of what's going to happen is not even been written yet.

James Zhang: 10 years, you're not the earliest, but you're still early if you get it now. I should correct that. Yeah, it's a new to new space. So thank you, John. I mean, that's my thing.

Jon Radoff: Awesome. James, this has been a super fun conversation. Congratulations again on the $25 million raise in Concept Arthouse. Yeah. And we'll put a link down in the show description, the show notes, check out Concept Arthouse and all the work that you make. And follow up on the link.

James Zhang: I didn't promote our brand, but when we were 13 years, we are looking to wrap up a bro. So if you'd like in the, or platform marketplace agnostic, we're here to make real AAA NFTs and gaming products. We are hiring, and we are looking for great partners in this exciting space. So I will, I will, bad if you let me. Thank you. Appreciate it.

Jon Radoff: Yeah, absolutely. And because of the immobile and all the game developers that we're helping to onboard into much easier, live game services, we see game developers all the time. So I hope that a bunch of you are watching and you'll give James a chance to help you out. And maybe you can help James out as well. So there's so much awesome stuff happening here. I should add, like if you enjoy these kind of conversations with people like James, subscribe down below. Because these are the kind of talks we're putting out every week. I love talking about this stuff. It's a very dynamic space. There's a lot to learn, whether it's NFTs, digital collectibles, economies built on blockchain, but also just the creator economy, the tech to make it easy, the game design, like I'm just super lucky that people like you, James, who've been willing to hang out with me and talk about this stuff. Because that's a hell of a lot of fun. So thanks a lot for being part of this today.

James Zhang: Thank you very much. Really appreciate the time job. Looking forward to doing this next time, too.