July 4, 2022

Meta-Troubles with guest Yoshio Osaki

This week, and in coming weeks, the Bubble Trouble team will turn our attention to the phase dejour, the bait of all click baits, the mother of all bubbles--the Metaverse. We’re going to begin this deep dive at the beginning and invite Yoshio Osaki, founder of the respected IDG Consulting group.


This week, and in coming weeks, the Bubble Trouble team will turn our attention to the phase dejour, the bait of all click baits, the mother of all bubbles--the Metaverse. We’re going to begin this deep dive at the beginning and invite Yoshio Osaki, founder of the respected IDG Consulting group.

Transcript

Richard Kramer: Welcome to Bubble Trouble, conversations between the independent analyst Richard Kramer, that's me, and the economist and author Will Page, where we lay out some inconvenient truths about how financial markets really work. This week and in coming weeks, the Bubble Trouble team will turn our attention to the phrase dujour, that bait of all clickbaits, the mother of all bubbles that is the metaverse. We're going to begin this deep dive at the beginning and as part of our murders row lineup of commentators on the metaverse, we are going to begin with Yoshio Osaki, founder of the respected IDG consulting group to do what Bubble Trouble does best, make sense of it all in plain English. Is the hype that surrounds web three and the metaverse justified or do we need to recall that children's story about the boy who cried wolf yet again? Back in a moment.

Will Page: Yoshio, welcome to the show. Uh, the Bubble Trouble audience are privileged to have you here. Um, we wanna start this journey of exploring the rogues' gallery, the motley crew of commentators in the metaverse with yourself because your company really kind of sets the foundation for understanding the gaming industry. I've admired how you managed to add up the gaming industry, so let's just give you the microphone and invite you to the stage to introduce yourself, your company, your colleagues. And really important, where the Bubble Trouble audience can follow 

Yoshio Osaki: your work.

 Thanks so much for havin' me, Will. I am the president CEO of IDG. And we've been the leading market research analytics strategy and M&A advisory firm in the game space for over 30 years and I've actually personally been in the space, uh, a- as a gaming analyst for almost 20 years now. And before that, I was an analyst at one of the first ever hedge funds that had a deep gaming investment focus. And so at IDG, we work with all the major game platforms, publishers, studios, a lot of the leading tech media and investment companies focusing on games. And we've sort of become a data driven source of truth and the trusted insight voice for our clients when the big decisions are made. And in terms of finding us, uh, we have a website, idgconsulting.com, where you can find some of our research there. We're coming out with new reports every month since a lot of the trends in the game space and the metaverse space are, uh, happening so quickly.

 Okay, 

Will Page: so I want to start off, I mean, in the culture of clickbait, everybody get excited about a word that nobody can agree what it means. And the metaverse ticks all those boxes and then some. So I want to put you on the spot and give you a tweet length description of what the metaverse is. So what on God's earth does the metaverse stand for?

 Yeah, 

Yoshio Osaki: it's confusing, isn't it? For me, the metaverse is a parallel immersive digital world with its own digital economy, powered by internet and interface innovations like web three infrastructure and extended reality, where a person's digital identity is as important as their physical one.

 Now 

Will Page: I've noticed Richard's just gone a lighter shade of green listening to that, but let's hold for a second. I want you to keep the twitter level of constraint on characters here and tell the audience what the metaverse 

Yoshio Osaki: isn't.

 I think a lot of folks are, you know, very vulnerable to hyperbole on both sides of it. So what it isn't, there are two polar scales, one being the greatest innovation in the history of tech that will fully revolutionize our physical lives into digital ones, and the other being a dystopian nightmare that's gonna ruin us all. The truth lies closer to the former, but it's somewhere in between.

Will Page: Got it. So as we begin this five episode path of cracking the metaverse, if I look at the history, a brief history of VR and AR, there has to be an element of the boy who cried wolf to this, which is it's promised so much in the past, and everybody says, "This time it's gonna be different." And every time it comes, it seems to be a bit of a damp squib in reality. There is some pick up, but it's not mainstream. Tell me why you think this time it could 

Yoshio Osaki: be different.

 We definitely saw a hype bubble for VR in '15 and '16. There was a lot of smart money going in, but there was also a lot of dumb money. No offense to the dumb money out there. Lot of, uh, short term opportunists. But we forget for every eBay, Yahoo, Google, Amazon, there were thousands of other dotcoms that went belly up on the side of the road. With web two, same thing, with social media, Friendster, a lot of other failed startups. Web three and the metaverse are gonna be no different. I agree that there's been a lot of hype for a long time. It's different this time, though, in that I think the tech barriers are not as daunting as we get into '22 and beyond as they were before. You already have the metaverse here in some respects with games that have 200 million monthly active users, so if that's a niche, that's a niche that I wanna be a part of. And I think also, I'm under no illusions that we're gonna continue to have a lot of companies and entrepreneurs that are just trying to make a quick buck and hurt the credibility of the projects that are actually legitimate. There's a lot of substance and promise behind the technology, but we're gonna see a lot more failures before we see more success. So it's gonna be both things happening in lockstep with each other over time.

 I guess 

Richard Kramer: one of things we've seen, which hasn't happened in the past because of the nature of gaming being somewhat of a cottage industry, is the role and participation of all the major big tech players. Uh, we don't know what Apple is necessarily going to do, but certainly we hear a lot about Facebook renaming itself Meta, Google or Alphabet, depending on what level you wanna look at it, at, uh, Microsoft and others. And you say the tech barriers aren't as daunting, but a lot of times, the gap between rhetoric and reality fell down on the fact that the tech was so disappointing. Aren't we still looking at a very long development road map from everything from silicon to optics to networks to the content to really flesh out this concept of the 

Yoshio Osaki: metaverse?

 You know, you bring up a great point that the tech barriers, they are still there, but they are not insurmountable. I think that, you know, we have to play a long game on this, no pun intended, that a lot of the different barriers you're, you're alluding to, these are all problems. But I do think they are solvable, and especially because you have the backing of big tech. You also have the backing a lot of thoughtful startups, that, you know, the- these problems are not gonna be fixed overnight, but over time, I think everybody is rowing in a same general direction to where at some point, we're gonna see exponential increases in alleviating some of these barriers. We're gonna see improvements in some of these pain points. It's not gonna happen right away, but we're lady moving in that direction, and I think, you know, big tech coming in, maybe that's a bad sign, but I think it's actually a precursor of things to come.

Will Page: Interesting. If I can just quickly jump in there's whilst we turn towards the halftime whistle, you mentioned that there's 200 million people in the niche that I wanna be in. I've always been fascinated with that. I think Benedict Evans once said that, that Sony PlayStation was niche, but it was huge. But there was an awful lot more people who looked at Sony PlayStation and said, "Why do I wanna play with that?" Do you think the gaming industry has been niche up until this moment and what we're about to see is finally gonna make it a mainstream where everybody feels part of it?

Yoshio Osaki: Yeah, it's a great way of, uh, framing the conversation. Gaming, it overtook TV last year as the largest entertainment-

 Wow.

 ... vertical.

Will Page: I remember you predicted it. You predicted it, you were the first [

Yoshio Osaki: inaudible 00:07:33].

 We predicted it, uh, six years ago. Pre-pandemic, obviously that changed things a lot, but basically, you know, gaming, $240 billion last year versus 229 for TV, and it's already bigger than home entertainment, music, and box office combined. That's just on the consumer side. You know, on the gaming B-to-B side, for the supply side with developers, they're spending another $100 billion today, uh, to fulfill all those content demands. We have more than three billion gamers worldwide, so, you know, I think there's the market size importance in that argument, but there's also th- the mainstreaming on the culture side, right? And you touched on that as well, Will. Um, it's no longer just 40-year-old men living in their mama's basement. Gaming in that respect I think is already mainstream.

Will Page: You know, if music is mainstream and gaming is niche, I remember you calculated it for me, gaming does more business in one month than music streaming does in one calendar year. [laughs] That's just breathtaking.

Yoshio Osaki: That's exactly right. We're also looking at a battle for share of day, but a lot of these experiences are no longer siloed, you know? Like, the worlds of music and gaming, if you just go on Twitch, there's a collision already happening right there organically day by day, right? Those lines are also gonna blur, and I think the metaverse is a part of that. But before I sound too much like a metaverse bull, I do have to say, an- and Richard brought this up earlier, we're not there yet. I mean, we're moving in that direction, but like I said before, we're gonna have a lot more failures than successes in the near term. It's gonna be a mixed bag for a while, but I think it's always gonna be this way with really disruptive technology.

Richard Kramer: One of the things I have to say struck me in the hype around the metaverse last summer was whether this was a very deliberate effort on the part of Facebook, now renamed Meta, to change the narrative around a business that it's fair to say had been the target of a lot of criticism. And equally for a large company like Microsoft, now in the process of trying to buy Activision, looking to convince investors that it had something to appeal to consumers, not just to the guys in the IT department who expected to be a reliable, uh, source of enterprise computing and, and cloud services. So I guess the question I've got with big tech coming in is, is the thing that attracted us to this gaming industry, to those grungy neighborhoods that aren't built up yet, the sense of possibility? And as the move into the world, to the realms of the big tech guys, are they just gonna become gentrified, boring, manicured corporate theme parks? And how does gaming keep its authenticity and its soul and all the creativity that bubbles up from all those kind of home brewed developers that invented some of the great games that we know today, and not just become, uh, another industrialized just sort of entertainment product as it moves to the metaverse?

Yoshio Osaki: The word I think of is equanimity. That's what comes to mind. I think there is a hype bubble that we all have to be very wary of. I'm a skeptic by nature, I think that's just part of my analyst brain, and I think you're spot on that one of the risks here is as big tech gets more involved, they run the risk of co-opting all the beautiful, organic, creative manifestations that we'll see from those folks in those grungy garages. But sadly, I'm about to contradict myself and say you need both things. You need big tech to be involved because you need an infrastructure that's scalable. The creators are not gonna be able to give that to you. But they are the ones who are gonna give it the soul and the life. But yes, if big tech gets too involved, [laughs] we're gonna strip the soul from it before it even has a chance to really gain that credibility, that authenticity, with the end user, so that's definitely a risk that we have to balance along the way. I think, I think you're exactly right about that.

Will Page: Nicely put, nicely 

Richard Kramer: put.

 Uh, I guess one other thing that I've always wondered about, who's gonna walk around with these goggles on their face and who wants to sort of immersive themselves in these virtual environments, especially when certainly people of my advanced age tend not to react well to that? Maybe it's gonna be great for my teenage kids, but generally older folks aren't as comfortable in these environments, and are we just trying to fit some applications into where we see the technology road map going or is there really a demand for folks like ourselves that might have the purchasing power in the economy to dip into a, uh, a virtual world for a material portion of our day?

Yoshio Osaki: You hit on something that's very important to call out, which is there is a generational gap. I think the kids are always gonna lead the way on these things, right? So to your point... And, and don't worry, I'm in your camp as well, we are all of a more advanced age to where our best focus group is gonna be our kids, our nephews, our nieces. And down the road, dare I say our grandkids. VR for people like us might be more of a nuisance, and it's not gonna mesh well with our day to day lives. But I think over time, what we're gonna see is, it doesn't have to just be a VR headset. It could be mobile AR on our phones. And we all already have a supercomputer in our pockets.

And so I think some of the possibilities in use cases are gonna be going beyond just the headset in a living room where you're tripping over cords. Over time, it's gonna be much more seamless and ubiquitous than that. You can even see that in China right now where people do everything on their phone. Here in the US or in Europe, it's a little bit more fragmented, some people use consoles for certain things, PCs for certain things, VR for certain things. But I think the young people are gonna lead the way on this, and they are also gonna have that purchasing power you alluded to 20 years down the line, 25 years down the line, as the taste makers for what's to come.

 Yeah, and I 

Richard Kramer: guess the big question we're all wrestling with when we hear something that explodes into public consciousness like the metaverse, and really, almost no one was talking about it and then everyone was talking about it. Is that, is, could this be another example of something we saw on Alvin Toffler Future Shock or in 2001: Space Odyssey, which was in 1969, and today we get the news that someone is quitting Google because they think its AI has become sentient and, you know, open the pod bay doors how is, is becoming a reality maybe 50 plus years after that movie had come out. So are we just forever talking about tomorrow's tech and maybe we'll be long gone by the time it does become a commercial reality? Or do you really think it's coming sooner than that?

 We're already 

Yoshio Osaki: living in a simulation, aren't we? My point is that I think the Snow Crashes of the world, the Ready Player Ones of the world, they point to something that aligns with some of what we're gonna see over time. But at the same time, what I think the metaverse is, we should just let these people build stuff and not call it the metaverse. Because I do think that a lot of folks have just used the term and they've co-opted it in a way that just ruins it for all the companies and all the people that are actually building legitimate projects-

 Whoa.

 ... that are gonna serve the common 

Richard Kramer: good over time.

 Indeed. And as we go to the break, I think one thing I'd like to pick up on in the next session is, look, this is part of entertainment. And as we moved from static art on the wall to, to moving images, we've moved to individualized moving images distributed all over the world via this crazy thing called the internet, we're moving the, the gaming world from a board that we used to put in, i- in between four people and, and move some pieces around on to layers and layers of complexity beyond that into a virtual environment where you can have, uh, your own DnD session la-, uh, and feel like you're actually in the dungeon. With that, let's take it to the break and we'll be back with Will and, uh, Yoshio talking a bit more about the metaverse here on Bubble Trouble.

Will Page: Back again with part two of Bubble Trouble as we begin this journey, try and hack into and unpack what the metaverse is and what the metaverse isn't. And we're blessed with the presence of Yoshio, I can't think of a better person to begin this journey with. And just recapping on part one, one of the big takeaways for me was the use of the word parallel when you described what the metaverse was. I thought that really stood out. But more importantly, you stressed that when we've had bubble troubles in the past in gaming, one of the big drivers for it is that investors failed to appreciate how long it takes to develop games. And a mutual friend of ours, Seth Gerson from Survios, he's really at the forefront of this game, he was in gaming in the Nintendo era in the early nineties, and he said back then, he says it today, "When the hot money comes into the metaverse, often they under appreciate or under estimate how long it will take for this thing to develop." And just wondering the word is more of a hindrance than a 

Yoshio Osaki: help.

 I definitely think it's a more of hindrance than a help already. I just feel like the well's been poisoned to the extent that, you know, for every Matthew Ball who can clearly articulate what the metaverse is, you've got a thousand other people that are already distorting what the metaverse is and could be. And it does a disservice to the folks, like I said earlier, that are doing things the right way. If it's gonna be the greatest thing since sliced bread, it's gonna take time for this to gain traction. And so, you know, there's this unrealistic horizon of expectations and there's definitely a gap there. That lexicon is already feeding into that disconnect, which is gonna make it harder for people to fully appreciate what it is, and instead they're gonna be more susceptible to disappointment because they're not gonna be patient enough to see it through to the end.

 When you 

Will Page: look at Facebook or Meta's deployment into the metaverse, do you feel like they're behaving like a sprinter or a marathon 

Yoshio Osaki: runner?

 That's a great question. A lot of their Oculus investment, obviously they haven't gotten profitable on that yet, a lot of that earlier team is gone. But I think they've had to pivot into this partly because they need to future-proof their business. WhatsApp has a great database of users, uh, they paid I think 18 billion for it, Instagram, it's still got a lot of young folks, but obviously there's a something called TikTok that's out there now. And Facebook itself is an aging social graph, and so they have to future-proof their business, and I think this is the way they're gonna try to do it. And with that being said, one of the things about disruption in general, you know, our old friend Chris Dearing will, used to tell me this, that if you're the massive 30,000 pound ocean liner, it's gonna take a lot more time to sort of change course and to be nimble and agile. By definition, it just can't happen very quickly. And so form that perspective, you know, I think Meta long term is on the right track, but in some ways, they almost have to unlearn their corporate tendencies to actually make real headway here. So I think both things can be true. Um, you know, they're looking in the right direction but their approach might require some refinement.

 Well, 

Will Page: I, I heard a rumor, and around about 26% of Facebook's head count is now allocated to Oculus and the metaverse.

Yoshio Osaki: That aligns with what I've heard too. I have a range in my head and, um, I think it's generally in the ballpark.

Will Page: And the other three quarters are dedicated to content moderation.

 I actually 

Yoshio Osaki: have a really good friend who's on that team and, uh, I know you're joking but, uh, you can also be half joking, you're not far off on that either. [laughs]

 [laughs]

Richard Kramer: One of the challenges with any existing business, for example like Facebook which has got north of 100 billion hours of revenue and a 40% operating margin is you don't want to abandon what has worked so well in the past. It was a longstanding trope that says most companies have one great idea in their history. It's very difficult to come up with a second great idea. They tend to hue to the great idea that they had because it's been so successful and got them where they were, so... The kind of transformation that's being attempted at any of these players is a challenge because it's not where they came from. Whereas what you see in the traditional game space is many of those companies are getting acquired. So where does that leave us with the big content franchises? Those games that seeped from niche, the 40-year-old in their mom's basement, into public consciousness? The, the Grand Theft Autos, the Call of Duties, the World of Warcrafts, the, these monster franchises that have reaches hundreds of millions worldwide, how did they transform themselves to become entire universes? When that narrative arc, I think they call it the story arc of the gameplay, was already something that, you know, it had a beginning, a middle, and an end, and how do you create an open-ended world out of those very close-ended beginning, middle, and end stories?

Yoshio Osaki: Yeah, it's a great question. So there was a catharsis, there was sort of a light bulb moment for me, and like I said, I've been in the space for almost 20 years now, about I think six or seven years ago, we started to do, you know, more work at the consumer level. And what we started to find was gamers, and even non-self-identified gamers like, uh, football moms, soccer moms, uh, playing Candy Crush who didn't self-identify as gamers and yet they're spending three to four hours a day playing these games, what we found was gamers, they used to self-identify as, I'm a PlayStation gamer, and Xbox gamer, a legal, um, and, or a mobile gamer, PC gamer. And there was this inflection point around six or seven years ago where these folks started to self-identify much more with, I'm a Call of Duty gamer, I'm a Pokemon gamer, I'm a League of Legends gamer, and it told me two things.

The first is one, brands really matter much more than the devices themselves, and it lends itself to a cross platform, uh, ubiquitous, dare I say metaverse future. And the second thing it told me was that these gaming brands could actually live and prosper in other entertainment verticals and we started to see that. Whether it's, you know, Netflix with Riot tag teaming on Arcane, which is a big streamable hit based on the League of Legends universe, or Resident Evil in the movie theaters or Lara Croft Tomb Raider, we've seen this now, Pokemon is all over different media verticals. And so the brands are becoming more important, much more so than the devices themselves. And I think that ties in with gamers' own self-identification and where those brands resonate most with them in their daily lives.

Will Page: I, I wanted to probe with you the, a, a question around the order of events and to follow this one through, music promotion, the business of making hits, was stuffed in the saddle of radio for 60 years and during the height of [inaudible 00:22:19], the way you got your song played on the radio was you sent a 12 inch record to the radio station, they opened it up, out would drop A, $1000 and B, a gram of cocaine, and that song got played on the radio. And that's how it worked for decades. That was the deal. So you broke a song on radio then it went to the shops, then you made your money back. Then, and I take a bit of credit in the case studies which proved this around 2015, songs broke on Spotify, then went to radio and if you're lucky, they would sell in the shops. Now it's based off three years, it's all changed again. You break on TikTok and then you go to Spotify, and then maybe radio picks you up. So can you give us some examples of how the order of events, the consumable experience, not the analyst, mm, the geeks on this call, but the consumers listening in, are gonna see a change? Like, could we see VR, AR games breaking fast then becoming Hollywood box office movies second, for example? Could you give us some examples of how the order, the musical chairs takes place?

Yoshio Osaki: The, the tough one here, Will, is I don't know if there's gonna be a linear progression. I don't know if there's gonna be a point A, a point B, a point C in a certain order that flows through logically in every single case that'll be a pattern that applies to all the others. Like, I actually think, when I think about where the metaverse is today and also where it could be five to 10 years from now, as I said in, in an earlier topic here, the transmedia angle I think is gonna be incredibly powerful. So to me, you know, you might see some bursts where it'll be more of a game-centric metaverse angle that comes first, followed by movies, then followed by TV. But in other cases, it might be something that explodes onto the scene on all devices, on all user accounts, on all types of media at the same time. And I think that's actually where a lot of the magic will be made because this also ties back into something that we haven't talked as much about yet, which is digital ownership.

The idea that if I'm a player or a content creator, that I have ownership over that digital asset, and that's gonna be transferrable for me across all these different media verticals, silos, platforms, call 'em what you want. I'm not so sure that that's gonna happen right away, but I do think there is something to be said for that. And when you look at it from that perspective, the order of operations is gonna be different depending on the release timing or what the medium, what the content actually is. But I don't know if there's gonna be this nice neat order of operations framework that we can apply at all areas here. I think it's gonna be kind of scattered and some of the progression will be more exponential and logarithmic rather than linear in that respect.

Will Page: Nice mathematical reference you said. Just real quick when you just mentioned that, sometimes we're discussing in music, where does value migrate to, is it in the repertoire? Or is it in the artist profile? I think what you're alluding to is in a metaverse, it's swirled. It could be more in the profile than it is in the, the copyright.

Yoshio Osaki: Yeah, I think the personalities and, you know, the, the, the profiles are gonna matter more over time. That's part of what we've seen with web 2.0 with influencers and the livestreaming market or even podcasters, the cult of personality is becoming in some ways very powerful. So it ties back in with something that Richard had brought up earlier. If you look at a Call of Duty for example, the people that created Call of Duty and made it what it was five, ten years ago, those guys are out the door. They wanna create and move on to something else. So Glen Schofield, he's now at, you know, Striking Distance Studios creating new games, totally different IP. People that get bored, they wanna do something different. So even though CoD has its own profile, there are gonna be people who say, "Let's follow what Glen Schofield is doing now. What's he building next?"

 Mm-hmm.

 And so I think there's that aspect of it because in the whole media market, as we know, it's not just the three networks where people are all watching Walter Cronkite today. Instead you have, like, hundreds of different channels and you have nano influencers and things like that. And the one nice thing about the metaverse is ideally it would help to integrate all those different factions together, even though our broader culture's gotten more triable and more polarized than ever before. I think it's kind of a conundrum there, but that's part of why it's a little bit messy and complicated.

 That's deep. 

Will Page: That's 

Richard Kramer: real deep.

 Since you brought up Call of Duty and I'm thinking about, you know, in the same way as we have competing universes today, we have the Marvel universe, we have Call of Duty, we have Roblox and Minecraft and dare I say we have the Harry Potter universe, and we have all of these various outlines, sketches if you will, for places in which we could spend our time. Do you think we're going to have national or regional metaverses? Is China going to insist on having its own metaverse? Will there be a Spanish or Portuguese-speaking Latin American version of the metaverses that we're talking about in the same as right now the top streamed artist on most of the leading, uh, music platforms is actually a Latin American artist? Is there going to be a thousand flowers blooming in this world of metaverses, especially given the corporate overheads that need to be born to create the infrastructure? Or is there gonna be some sort of universal translation and can we all be playing the same games, uh, even though we don't speak the same language? How do you see the national dimension of it playing out? Especially since I know games and launching games in China is now so highly constrained by approvals of the national government and, and maybe it'll go the same way in other markets.

Yoshio Osaki: By definition, a metaverse is truly open, fully integrated ecosystem. So if you follow that definition for a second, the whole national framework that you've proposed or you've, you know, proffered here defeats the purpose of what the metaverse should be. With that being said, we are gonna see these fragmented shards first, so not a true, open metaverse because everybody wants to have control over the data, over what the users are doing in that ecosystem. China's a fantastic example, you got three regulatory agencies all vying for power over mobile game approvals and PC game approvals, right? And so from that perspective, I think there is a nationalized piece to this that sort of omits that before you get to a true metaverse future. I don't know if we'll ever get to that true metaverse future in the next 10 years by the way, because like we just talked about, a lot of these governments might wanna step in and have more control over those audiences.

Over time however, it'll be less about the tech barriers, and it'll be more about the partnerships, business terms and conditions, the government and regulatory overhangs. Ideally, what we're gonna find is, there's so much interest out there across so many different communities that the Spanish-speaking community for this one influencer will be big enough on its own to have merit. And this Chinese-speaking community on music of streaming, you know, across, you know, Tencent versus Alibaba, the unifying force behind all of that though, I think it's sort of like an asymptote. We'll approach that unifying angle, but I don't know if we'll ever quite get there because these different forces can't get out of their own way. I think it'll be nationalized first in a phased approach. Over time, we'll increasingly get to a point where everything gets unified because that's what consumers will want, a bigger public global town square, but I don't know if we'll ever quite get 

Richard Kramer: there.

 We always ask out guests to help us smoke a little bit at the end of this podcast-

 [laughs]

 ... and, and pick out what we call the smoke signals, not to say that you haven't had the influence of any strange, uh, chemical substances to dream up what these metaversi might comprise, but you are based in San Francisco-

 [laughs]

 ... you cannot walk down the street in San Francisco without having secondhand smoke, uh, knock you through a loop.

 [laughs]

 [laughs]

 But, um, what we're looking for in the smoke signals is the uh-oh moments when you take a look at the hype and the hysteria around any given area, typically something that might cause bubble trouble. You hear terminology or metaphors that just grate on you or don't make sense. What are the kind of things that raise your hackles when you hear people talk about the metaverse, uh, as one monolithic concept? What, what gets you thinking uh-uh, they're either on the road to lose a bucket load of money or, or flame out or that's just not really the right idea?

Yoshio Osaki: For me, I think the smoke signals come in two flavors. So the first is, when you have a lot of these big tech leaders talking about how the metaverse is the future and they're gonna bet the entire farm on that future, but they still wanna have their own walled garden. The metaverse is supposed to be open for everyone and yet a lot of the leaders in tech that are pushing for this are the same people that want everything to be done in their version of the metaverse. Well, their version of the metaverse defeats the entire argument for what a real metaverse version is, that everything is open. These guys all want their walled garden, they wanna own the data and the economics for their users. They're gonna destroy the vision on arrival by doing it that way.

 Not too 

Will Page: dissimilar from the debate about the RSS feed in podcasting. Podcasters want podcasts to be open and free, but there's many-

 Yes.

 ... [inaudible 00:31:44] that which wanted them to be closed and walled gardens, so interesting parallels.

Richard Kramer: I've got one line for both of you. Open is a four letter word.

Yoshio Osaki: Ah. [laughs]

 [laughs]

 Once again, you're not wrong. Like, everyone, everyone is saying, "We believe in the metaverse, but come to our metaverse." There's not such thing as our metaverse, like, technically, right? Like, the idea is, the metaverse, it only reaches its full potential if everything is stitched together in a unified fabric. But if each guy is gonna say, "No, no, no, come to mine." "No, no, you come to mine." Defeats the purpose! That's one thing that's an athame to what I think the metaverse should be. That's a red flag. The second red flag for me, you know, I'm an angel investor in 12 startups. Doesn't mean anything, I'm still learning a lot in that space, but, you know, I happen to get a lot of pitches, just like you guys do. And it's been amazing and staggering for me to see how many of these startups that once branded themselves as a gaming company or as a transmedia company or a tech stack company, and those same startups come to me three to six months later now and they suddenly rebranded as a metaverse company without showing a clear understanding of what the metaverse is. [laughs] I, it feels desperate. It feels bubble-ish. It, it, it scares me a lot.

 Fascinating. 

Will Page: Well, takes this Bubble Trouble episode to a close. I have to thank Yoshio for his contribution. I think you've got us on the best first foot on the ladder of understanding this metaverse malarkey and it's been fantastic having you on the show. I take from part one the patience that's required in gaming, which is often misunderstood by the investment community. And part two, the profile. Go fishing with the fishes. Is it the profile of the gaming developers themselves, is it the profile of the consoles? And to watch the value migration follow the profiles, it's gonna be a very interesting development as well. But this has been a fantastic foundation for what's gonna be a great series on the metaverse on Bubble Trouble. You've been with myself, Will Page, and my co-host Richard Kramer, the double act that is Bubble Trouble, and we'll be back next 

Richard Kramer: time.

 If you're new to Bubble Trouble, we hope you'll follow the show wherever you listen to podcasts. Bubble Trouble is produced is Eric Nuzum, Jesse Baker, and Julia Nat at Magnificent Noise. You can learn more at bubbletroublepodcast.com. Will Page and I will see you next time.