Inside Crypto's First Breakout Game: Off The Grid | Theodore Agranat, Gunzilla

So the peer-to-peer marketplace that was put into the game was at the core of the user experience to allow folks to own, trade, share, swap their own assets. To us, it's not about crypto, right, per se, right? Not directly about crypto. It is about best-of-breed technologies, in this case blockchain technologies that will enhance the user experience. It's all about the gamer and it's all about the gamer experience.

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Thank you so much for having us. Appreciate it. Yeah, man.

All right. I've got a bunch of questions. There's going to be just a heads up. I'm going to ask some really dumb questions in this episode because I'm not super deep into the gaming world. So I'm just going to ask all of my dumb questions to you and you can help me understand what's happening here. So maybe the best place to start is tell me the, the whole backstory of like Gunzilla, the Off the Grid game, deciding to do crypto. Like, what was the sequencing of that? Like, when did you guys launch? What's the backstory of the team? Like, I just want to hear the full download, actually.

Absolutely. Well, one thing that I'll preface my statements with is by saying that to us, it's not about crypto, right? Per se, right? Not directly about crypto. It is about best-of-breed technologies, in this case blockchain technologies, that will enhance the user experience. It's all about the gamer and it's all about the gamer experience. So having said that, let me dive a little bit into the background. Vlad Korolev, Alexander Zol, and later on also Neil Blomkamp are the founders and co-founders of Godzilla Games. Their background spans over a decade now of gaming experience. They were running Crytek Kiev, which is the most legendary gaming studio in the world, and were working on IP back then that reached 150 million gamers and made a huge, huge impact on the industry. The CTO back then was Timo Davidenko, who built the CryEngine, which was the gold standard for testing GPUs and used in Far Cry and Crysis. And a bunch of other very, very talented individuals. Vlad Korolev had this vision of asset ownership fairly, you know, early on, like years and years before Gonzalo was started. But the way the publisher relationships worked, the publishers were not receptive to that at all. So Alex and Vlad said, okay, well, we're going to do it ourselves. And that's how Gonzalo was born in 2019. The founders, which is incredible, founded the initial development all themselves. They spent $15 million of their own money from previous business endeavors, which includes, by the way, Plink, which is the largest social gaming network in the world with 18 million users using it, making over 100,000 matches per day of gamers playing with each other. They self-funded the company for the first 2 years, got it to 100 employees, onboarded Neill Blomkamp, the legendary award-nominated film director behind such hits as District 9, Chappie, Elysium with Matt Damon, and last year Gran Turismo, Orlando Bloom, onboarded him as a co-founder, and only then did the first public raise. Everything was from the ground up focused on one, gamer, i.e., user first, and two, what are the best technologies that will give the user the absolutely best experience. And of course, blockchain technology is the core of facilitating transparency, fairness, asset ownership, traceability, trackability, et cetera. So the peer-to-peer marketplace that was put into the game was at the core of the user experience to allow folks to own, trade, share, swap their own assets. Now fast forward, you know, 5 years of development later, we had our absolutely meteoric launch on the 8th of October of early access. On PC, PlayStation, Xbox, and since then have had over 3 million streamed hours, over 3,300 streamers that streamed us, over 98% of them completely organically.

Okay, tell me about the actual— so the game's like, it's a battle royale, right? It's like Fortnite, Warzone, Apex. Um, I've got, uh, uh, Pierce from, from Delphi posted a great video of him just, uh, playing the game. So I mean, for people who haven't actually seen the game, I'd really recommend going to watch the game. You can watch it on YouTube or ideally you can play it.

The—

Santi, I don't know if you've seen this— the game looks amazing. It looks— I mean, it's an incredible looking game. Theo, can you just tell me— I mean, maybe I'll just keep running this while you're talking here, but—

Absolutely. Yeah.

Can you just tell us about the actual game before talking about the crypto elements?

For sure. Again, I refer to them as blockchain elements, not crypto. But yeah, so the game itself, we call it the Battle Royale 2.0 experience. What is the Battle Royale 2.0 experience? Well, first and foremost, we're the first battle royale game in the world that will have 60 hours of storyline on both sides of the conflict written by none other than Richard Morgan, the author of Altered Carbon. Which was turned later on into an award-winning Netflix show by the same name. He also wrote a lot of the scripts for Assassin's Creed and a bunch of other world-famous games. There is no battle royale game currently that has a storyline. And one of the biggest complaints that traditional shooter players have about why they don't enjoy playing battle royale games is that there is no storyline. I remember myself anecdotally, I used to load in with, you know, two of my kids and my wife into a Fortnite, you know, full-player squad session. And we all had battle passes. We all tried completing them. I would never finish them because one of the tasks, for example, would be jump 10 times off of a waterfall. Even the first time was boring. I would never finish my battle passes. Here we have actual real storyline where you can take on a mission, another team can take on the opposite side of the mission, and then you kind of battle out the mission. All that happens within the context of a 150-person battle royale game. So that's one. Two, we have unparalleled graphics and realism. I know we're getting a little bit of pushback on the fact that you need higher-end systems to run this, but the game looks stunning. It's been nothing short of phenomenal in terms of how much of visual realism our team has been able to achieve. And it's only going to get better from here on out. And of course, we also are still working on optimizing for lower-end systems. And last but not least, definitely not least, we have this very unique limb system that gives people virtually unlimited strategic choices and decision paths right within the same gaming session. So whereas other games allow you to select a variety of different weapons or allow you to select at the start of the game a specific ability for your character, we allow the abilities to be swapped and changed in real time based on what you find on the island that you land on, Teardrop Island. So you could have an arm that's a grappling hook. You could have an arm that's a grenade launcher. You could have an arm that's an energy shield and collects bullets and then shoots them back at your opponent. You could have legs that make you jump really high. You could have legs that make you run really fast. All of those you can swap on the fly. You can also— and these things create the most hilarious and funny videos online— you can also shoot somebody's arm off. Starting to run away, they can't shoot with their right arm anymore, and walk over there, pick up their arm, and swap their arm with your arm. You could shoot somebody's leg off and they are crawling away trying to find new legs. And we've actually had people crawl away with no legs and eventually find legs and win the whole shebang. So those are the three kind of primary things in addition to a slew of other features that we call kind of the Battle Royale 2.0 experience. But yes, at the core of it, you have multiple teams land on an island and battle for the last man standing. So core, core, through and through, a battle royale experience.

Okay, walk me through where blockchain comes into all of this. Is it about a token? Is it about the in-game items or NFTs? Is it about the marketplace? Like, walk me through what that experience is like.

Yeah, so there's a lot of stuff coming that we will kind of announce closer to mainnet launch or even after mainnet launch. But at the core of the experience, you are landing on the island with starter arms, starter legs, and just a pistol. Everybody's the same, lands the same on the island. You then proceed to explore the island and you find various different weapons, limbs, etc. But what you also find are what we call hexes. Hexes are little cubes that contain items that you can then extract out of the game and then actually own. Those are fully kind of blockchain-tracked items in the game. It's all tied into the lore. You actually need to take this hex to a hex extraction station. You need to load it into that station. That data gets sent to the space station where we have our hackers, which are the validators, math geniuses inside the game. They then validate the item and you can then, if you defend your position for a long enough period of time, depending on the rarity of the hex, it could be 1 minute, it could be 2 minutes, and you then actually get to keep that item. Now you finished your game, you have your hex, you decode your hex, which again is sent to the validators for decoding. Once you decode the hex that you do have to pay some in-game currency for that you can obtain in-game, you then mint the actual item on chain. It then belongs completely to you for you to do with as you wish, including the ability to, one, add it into your loadouts now to then call it into your gaming session later on. Two, list it on the marketplace where you can then sell it for in-game currency, purchase something else that you might need more for in-game currency, et cetera. So that's really the core of the blockchain experience that facilitates asset ownership.

Why is, why is that so important to the game? Is it, is it crucial to making the game a success? Is it like a nice to have? I'm curious how you guys thought about this internally.

Sure.

So number one, I'd also be curious how much harder it made the development. Like, are the tools ready to go or is it like this massive extra lift where you need like 20 extra blockchain devs and it's like, this will probably be worth it one day.

Great question. So number one, we currently have 360 full-time employees. So it's a really, really big—

360?

360 full-time employees. That is right. So it's a very, very sizable team. It definitely was a very large lift, not only to build up the marketplace, but we had to build our own blockchain because we didn't find anything out there that really was up to the standards that we had. The— we ended up going with an Avalanche subnet that we highly customized and we built on top of. These folks have been super, super helpful with the technical support, with the marketing support and everything else. But we had to basically build our own chain in order for us to be able to use our own token for gas, which was essential to make the user experience very fluid and smooth and transparent and kind of abstract the blockchain components away from, you know, the gaming experience. We had to build our own wallet, we had to build our own blockchain scanner, we had to build our own, yeah, in-game asset marketplace. So there was a lot of heavy lifts along the way to allow for the experience to be as seamless as it is right now. When you load into the game and interact with all of these components, the marketplace is right inside the game. For those that haven't seen it, right, download the game on PlayStation, Epic Games launcher, et cetera. But it's right there within the gaming experience, completely, completely integrated into the gaming experience. You don't need to leave and go to some separate website or anything else. It is also fully integrated into our wallet and so on and so forth. But yeah, it was a very, very big lift to accomplish that. And we absolutely, you know, had a very, very large team or still have a very large team that is focusing on how to make that experience as seamless as possible and as, you know, removed from the gaming experience as possible so that you don't have any stumbling blocks or any friction. And it's really, again, can't emphasize it enough, all about the gamer and making sure that they have a very positive experience.

Why did you guys choose Avalanche?

So as I mentioned, right, they were the only blockchain that allowed us to do the really, really crazy things that we wanted to do to enhance the user experience. And it starts at the core with the ability to use your own token for gas so that you don't have to bother the user with all these different tokens. Like, for our experience, right, you don't have to set up a wallet, you do not have to swap any tokens, you don't have to on/off ramp any fiat. All that stuff is abstracted away. And Avalanche were the only guys that were able to facilitate. And again, I can't emphasize enough that they've been also absolutely phenomenal with their technical support, their marketing support, and just kind of cheering us on very, very actively.

Who else did you look at? Who'd you consider? Just curious.

No, yeah, without getting into details, but we basically, we looked at everything and not just look, right? We actually set up environments in our office and worked with these tools to test out what is and is not possible. A lot of folks made a bunch of promises. We tested it out, didn't really work, kind of halfway worked, et cetera. Avalanche were the only ones where, you know, they said this works in a specific way and it worked exactly in that way. And so we went with that decision. And then I might add that a lot of folks offered us, you know, fair amounts of grants and everything else. And we chose the best technology irrespective of grants.

Yeah. What is the experience like for a user who, for a non-crypto, non-blockchain, I know you're calling it blockchain, not crypto, but for like a non on-chain user? Do they feel— do you automatically create a wallet for them? Do you—

That is correct. Yeah.

And then do they have private keys and can they transfer the assets out of the game if they want to yet? What does that actually feel like?

Sure. So number one, very important to keep in mind that all of the blockchain components are completely and entirely optional. You never have to interact with any of it if you don't want to. But yes, on the backend, automatically a dedicated wallet gets set up for you where you can hold all of your assets, where we hold all of the assets for you. Now, you might have seen early this year in an unprecedented move for a startup chain, OpenSea did a native integration of the Gunzy chain into their marketplace. So in the future, people absolutely, after completing necessary steps, and holding a battle pass, an active battle pass subscription, will be able to take self-custody of their item and then do with them as they please, shared with others, et cetera, including connecting and listing it on the OpenSea marketplace.

So Theo, I'd like to, before jumping on here, obviously the gaming category, as you alluded to, has been challenged, right? A lot of people, there's been a lot of investments in crypto games. There was a lot of hype. We've kind of gone through the full hype cycle. We had Axie and a bunch of others, and then, you know, this sort of— we're in a trough of disillusionment. I would say that your recent success has been a breath of fresh air, but there's still a lot of skepticism. A lot of investors either don't believe in the category anymore. Maybe the tech in other places is not as robust as what you found in Avalanche. I'd like to just zoom out a little bit for people to get a little bit more context. Someone like you, what was it that excited you the most about Web3? And how do you see— what was it about Web3 that it clicked for you to build a game?

Right.

You guys have a ton of experience. Why bother coming into the space?

Well, again, there's again several different issues that I would like to address here. Number one, the biggest problem with games in 2021 and a lot of these games that launched that people got very disillusioned with and lost a lot of money on quite quite frankly, is the fact that they have these inflationary treasuries, right? They anticipate that they can just continue pumping out rewards that dilute supply and that user adoption will outpace inflation. And it just never does because number one, they're really only targeting crypto natives, you know, because a regular Web2 gamer would never go through the pain of setting up a wallet, 16-word mnemonic phrases, swapping tokens on and off, renting fiat. You lose them at the first, right, setting up a wallet part and you're done. So inflation always outpaced adoption and all of that ended inevitably where we of course know it all ended, which is with people losing large amounts of money and that category getting a very bad rep, not just within Web3 and within Web3 investors, but also with traditional gamers. They're like, it's all a scam, an Ethereum scam, blah, blah, blah. Now, what did Gonzalo do different, right? We do not have an inflationary treasury that pumps out rewards. There's no farming, there's no airdrops, and there won't be, right? It's about building a sustainable economy, number one. And obviously all of that focused just on an amazing experience for the gamer. That's really at the core. And there haven't been really games yet in Web3 that focused on the gamer first, that focused on first launching a product, a real product that people enjoyed, that a good product-market fit before launching a token. So that's why there is no token launched. There will be eventually, but there's no token launched. There's a fully playable game. There's an experience that people absolutely love irrespective of what technology it's built on. And that's really what it's about.

Yeah, no, absolutely. I mean, a game by definition is fun, and you could argue none of the games that we've seen are games. They're DeFi farming, glorified staking, gamified staking, gamified staking with, you know, YAM farming back in the day was pretty fun. But then walk us through like, again, the thesis for you guys that you see in the opportunity for Web3, because clearly, as you alluded to, there will be a token eventually. Talk to us a little bit more about that.

So there's a bunch of things that we will obviously only start addressing and talking about closer to mainnet and post-mainnet. But for right now, really, the main value proposition from our perspective of Web3 is the fully trackable and transparent ownership of in-game assets and the ability to take full custody of these assets yourself. And do with them as you please. I have a very interesting anecdotal, again, use case out of my own life, and that is our kids, my two boys, absolutely loved playing Fortnite, and they would earn a specific skin, then load in with their friends into the squad, and they would say, why can't I allow my friend to wear this unique skin that I was grinding in Season 3 and now obtained? I can't even share it with them for one gaming session. So super, super simple use case. Number 1. Number 2, second use case, both my boys eventually inevitably stopped playing Fortnite. They spent thousands of their own hard-earned like summer job cash, et cetera, on in-game items. To them, their in-game skins were most, more important oftentimes even than their real-world clothes. It was like that the big thing, right? How you looked in game. And when they inevitably stopped playing, they came to me and said, Dad, where's like the sell button? Like, how do I get my money back? I'm like, what do you mean? They're like, well, I spent this money. These are my assets. So we had a whole thing about what a ULA is and what asset ownership is. Ownership means and what these corporations do currently. So even in this very, very, very, you know, in those two simple use cases, Web2 games do not provide a good and fair and equitable experience to the gamers that are investing a ton of time and in many cases also a ton of money into these assets, right, that then are lost forever. So that really is at the core of why we believe that blockchain technology solves a very, very tangible problem. And that's where we're not just, in my humble opinion, revolutionizing Web3 and focusing on, you know, user first, gamer first, but we're also revolutionizing Web2 with what the actual experience should be like. Again, anecdotally, but we had like this 11-year-old kid show up at an Avalanche event and go like, oh yeah, off the grid. Yeah, that's the next Fortnite. But the more important part of it was Wow. Yeah, I can own my own assets there. I can own all my in-game items. The next generation will demand that by default from any game that is asking them to invest money and even time into the game. They will demand asset ownership. That's what we see as the future of Web2 gaming.

Yeah, I definitely agree with that. There's a contingent that is critical of that, saying gamers don't care about setting up a wallet, don't care about this. It's just distracting. Why not just go build a Web2 game? Um, but your point around ownership of skins and being able to trade that, I think where they missed the point is you don't lead with that, but it becomes important once they start playing. And if it's at feature parity with a Fortnite, like, realistically, you are going to play a game that gives you the— it's like, it's like Web3 enhanced features, but you don't lead with data ownership, you don't lead with ownership. It just becomes a nice— it's like a very good to have, but you need to get them in first with the game is awesome. It's feature parity.

Yeah. And so feature parity and making everything that's blockchain completely optional. That's it.

Let's walk through a lot of your traction. For me, that's the most exciting. I mean, people know I'm very bullish on gaming. I've invested in a lot of games from Illuvium, StepN, passed on Axie Seed round even though I really liked it. I've taken a lot of those learnings and I'm sort of like looking at what you guys are doing, find it incredibly fascinating. I'd like to understand distraction. Like, what are you seeing from your KPI dashboard? Like, where are these coming from? Demographics, as much as you're willing to share, because I think that will really inform the rest of the conversation.

Sure.

So a lot of that stuff, right, is still in the process of being collected because we're literally just 2 weeks post early access launch. But what we have seen, and obviously everybody can see that, speaking again of transparency and verifiability, what everybody can see on our own blockchain scanner is that we are now at over 8.3 million wallets. We were at less than 2.8, you know, less than 2.5 weeks ago. So the traction has been absolutely incredible. As I mentioned before, we've seen, you know, millions and millions, over 3 million hours streamed. We've seen over 3,300 streamers streaming. The game, we see a very, very strong retention. We actually— somebody else sent me a message this morning showing us that our trajectory really hasn't changed much, even though a very, very major Call of Duty game launched yesterday. And we're still showing very, very similar traction to the day before. Knock on wood. Hopefully that stays the same. But we've seen very, very, very, very phenomenal numbers, and we are only getting warmed up. Like, a lot of people are telling us, hey, you're at the pinnacle of success in Web3. Like, now it's just about user acquisition, et cetera. And we say that it's not about that for us, right? We're just getting warmed up. The real work begins now. We are on our path, right, to tens of millions and in the future, hopefully hundreds of millions of traditional gamers trying this game that we feel gives you the best battle royale experience in the world currently. So, yeah.

So for that incremental, like, 6 million wallets, basically you just acquired over the last couple of weeks. Do you have a sense of what percentage are new to the space or what percentage are coming, are crypto native?

Yeah, so the majority of the users are really coming in on PlayStation. Obviously some of them might be crypto natives, but a very large amount is coming in. We see it in our Discord and saying, oh, hey, I saw you guys on so-and-so stream and I just jumped in. Wow, that's a really cool game. So we see a lot of traction with mainstream audiences that come also in and say, somebody says, oh, but there's NFTs. And people are like, I don't care. I don't have to buy NFTs. So what do I care how they solved the technology piece? Nobody opens up an iPhone app and says, oh, this is JS React. I'm not going to use this app. Nobody cares what technology stack an app is built on. And that's really what we are advocating for, right? It doesn't matter what the technology is. It's seamless in the background. If you're having a good time, enjoy the game. Have fun.

So it's just— from a funnel perspective, it sounds like PlayStation is pretty key, has been for you guys. Any other channels that have been important for you?

All 3 channels are very important to us. We're seeing great traction on Xbox, even though currently we're still in the Insider Program. We will soon leave the Insider Program. The Insider Program really maxed out very, very quickly. And that just means that, you know, you have to take a lot of steps and it's not, you know, fully accessible yet to everyone. We're getting out of insider access very shortly. But Xbox is super important for us. There's a ton of Xboxes worldwide. PlayStation 5 is very important to us, but also PC, right? We are on the Epic Games Store and PC is incredibly important to us. So there's really no, you know, oh, this is more important than that. We are on all major platforms. And I might add, we're the first ever blockchain-enabled game to be on consoles, right?

For users that may not have any familiarity, older people that are not— you just basically, if you're playing PlayStation game, Xbox, or on PC, you go to their app store, you know, in the console interface, you see Godzilla, you click it, you download it, you start playing immediately. You don't have to load up a wallet, you don't have to any crypto stuff. It's like if you were to survey maybe the 8 million users Would you say, what percentage of them would you say know about the crypto component?

So a couple of things. Number one, you search for Off the Grid, not for Gonzales. You search for Off the Grid. That is the name of the game. And then in terms of how many know, don't know, which Shroud, world famous streamer, mentioned blockchain in our marketplace on his stream to 100, whatever, 50,000 plus users, I believe it was. Ninja mentioned the serialized Pokémon cards. So people are absolutely, number one, are aware, but number two, amazingly enough, are embracing it because everybody's talking about the fact that this is completely optional. Who cares what technology is used on the backend to make your user experience amazing? So pretty much everyone knows because everyone is talking about it, but is talking about it again in the context of, number one, it's optional. Number 2, this is a free-to-download, free-to-play game. Number 3, there's no paywall. Number 4, there's a peer-to-peer in-game marketplace, right?

So yeah, and, uh, talk to us a little bit about the role of streamers here. Obviously, that's, uh, streaming as a category has been huge for gaming. For people that don't know much about it, can you just give us like how important it is and specifically how important it has been for you guys?

Absolutely. So there's a couple of things that come into play. Number 1, our game is incredibly entertaining to watch, especially because of the limb system where you can lose your arm, you can lose your leg. It's kind of very entertaining to watch that. But also because of the massive dynamic gameplay that we have with a lot of verticality. There's a jetpack that you activate. You can jump really high, you can run really fast. You jump off a building, activate the jetpack, zoom away, you know, land, literally like fly into a window, land, make a roll. It looks really, really entertaining. So that's one. But two, yeah, I mean, streamers, and streaming specifically is an incredibly popular category that has grown by leaps and bounds over the last couple of years. So through streamers, you reach a massive, massive audience that doesn't really care about some ad on Google or some ad on TV, right? They care about what do their heroes play. So obviously, to get the flywheel started, to get the word out there, that's where we started. A lot of— not a lot, but some people on the fringes were giving us a hard time. Oh, people are only playing this game because you're paying them, the streamer. Well, no. Number one, how are you going to get the word out there, right? Like, that's how you get the word out there. But number two, we had streamers that were sponsored, stop their sponsored stream, come back half an hour later, start up our game again and go like, this is amazing. TimTheTatman said, this is my game. And it was not sponsored. It was epic. We have a top Call of Duty Warzone streamer that started his video by saying, I'm not sponsored. I have never even talked to the devs, but checked this amazing game out and proceeded to walk through the whole game and the gameplay and everything else. So yeah, that's very, very important to us, right, to use streamers and their reach to get the flywheel started. But at the end of the day, it is still about having an incredibly entertaining and immersive gaming experience.

I remember talking to, like, looking at a game. One of the more important metrics is a viral coefficient. So this is this idea of like you play and then How much do you spread it organically with your friends? And, uh, it sounds like there's a lot of that here, um, and which is great to see. Um, and by the way, every, every, you know, sort of to be critical of Off the Grid by paying certain streamers is dismissive. Like, you need to appreciate that every game kind of does it. It's like, it's just, it's, it's just, it's a marketing cost. So, yeah. Um, I'm curious if you could expand a little bit on how you see, like, I want to get eventually to how you make money, monetization. It's obviously free today. I don't know if there's anything on the KPI dashboard, any insights that have really surprised you that you find would be relevant to talk about before we transition more into kind of the company, the business model and whatnot.

Sure. I guess one thing that we've been really, really positively surprised by is the fact that we have people worldwide all on their own accord organizing game nights, organizing little tournaments. We had in Buenos Aires during the Avalanche Summit that I just attended and spoke at, we had Wayfinders GG randomly organize an event that had hundreds of people attending, standing in line for hours to get a chance at participating in like this first ever little mini tournament that they put on. That was just incredible to see how passionate people are about the game, how they love the game. We had some people streaming for like the first ever 36-hour nonstop streaming of playing Off the Grid. We had a guy that literally went off the grid to play Off the Grid. There's this video of this guy going into the wilderness and playing on a laptop with a little generator. It's been incredible to see how much fun, right, people have with the game. We have people saying— actually posted it on my Twitter timeline— there was a guy that said, I played— I forgot the exact numbers, but thousands of hours of Apex. I played thousands of hours of this title. And this is the first game in 10 years that brought me back to playing that I'm having incredible fun with. With people saying that for the first time ever, I'm feeling again the feelings that I had when I first started gaming. I hadn't had these feelings in like a decade. That's the most rewarding thing, at least for me personally. I don't know for a very, very large portion of our team. That's the most incredible feeling in the world, right? That you gave somebody this incredibly unique feeling that they hadn't experienced in sometimes decades. That's incredibly rewarding.

As you were saying that, I mean, I grew up in a time where we organized LAN parties. You know, we would take our laptops, we would hook up, you know, Ethernet cable and like everyone in different rooms and we would play Counter-Strike and it was like super glitchy, but it was so much fun, right? We'd stay up all night playing it. It, it's really And by the way, I, I think it's important to just zoom out a bit. Like the gaming category as a whole has been pretty challenged. It's not just Web3 games. Like, yeah, very few games, like the gaming industry is going through a tough time, not just in crypto. There are very, very few games that have actually made money. Like the latest one. I mean, obviously Call of Duty, Fortnite, World of Warcraft, big franchises that have existed for a long time. And the only game that has really kind of been a blockbuster recently, because I love Harry Potter, is like, um, what is it, Hogwarts Legacy?

Yep.

But obviously you benefited from— you had such a captive audience. It was the first game related. They recouped, I think, their entire investment in the first week or two, but the engagement's not there. Um, it's a— Zelda, for instance, as well, is a pretty tough game to play. Of course, you benefit from the Nintendo, the brand, you know, very nostalgic. But all this to say, it's pretty impressive to see you guys when you say, I do sympathize, a lot of gamers have just not felt that experience that they felt back in the '90s or in the early 2000s. What would you attribute that to? I mean, obviously there's like very competent developers, there's development tools have just gotten better, the graphics keep getting better, but What is it about just if you were to attribute, like, why is it that there haven't been like really good new games come out?

I can give you my opinion, which I think is, you know, very, you know, kind of an accurate assessment. Not to toot my own horn, but I think it's a very accurate assessment. So I'm a huge gamer, right? I started gaming on the Commodore 64, you know, in the early '90s. And I just absolutely love this category in general. But as I've gotten busier, I had kids and everything else. To sit there and play a single-player game, no matter how awesome. And I love Elden Ring. I love Miyazaki's vision, and the whole universe is just incredibly beautiful. I love Ghost of Tsushima. But I haven't been able to really play these games too much because I then miss my friends. I miss playing with my kids. I miss playing with my family. I miss playing with some work colleagues, with friends. So the single-player category gets you that initial really, really big boost. I buy any beautiful single-player game, but inevitably after a couple of weeks I just stop, right? So what Off the Grid of course does better, in my opinion, on several different levels is number one, there's so much more lore, there's so much more story, it is so much more immersive. There's like these short films that Neil made that are absolutely fantastic and incredible. All the cutscenes, all the kind of nuances of what you're experiencing and how it all ties in with, with, with a bigger story. Are absolutely incredible. You just don't get that same experience in other games. But then you tie in the ability to experience that with your friends and to experience completely unique and new and novel gameplay with your friends. That's what I attribute the stickiness to because all these other gaming projects, you know, with their huge budgets, they keep year after year just reskinning this same experience, right? And maybe adding a tiny bit of, of stuff there. And people of course play them because it's like the obligatory thing to do. But I think that's where really Off the Grid stands apart, you know, and head and shoulders above the rest is the incredibly immersive experience that you get as a result. This is very, very rich lore and you get to socialize with your friends. So.

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All the more impressive because there have been select, obviously, success stories, and it's mostly in the fast casual category, or like, you know, people have in their commute, in their, you know, the time, those games, obviously, they see, you see games get to massive scale, like $100 million of revenue month 1, 2. But the, and this is where I want to go next, is the, the retention curve is, is quite bad. and has been forever in gaming. Like, and yeah, like, yeah, all the games there— Angry Birds, Candy Crush— like, you have these boom and busts that are— and there's a very select, uh, less than 1% of the players account for like the vast disproportionate amount of revenue. That's always been a dynamic in the fast casual kind of, um, you know, uh, free-to-play, uh, games. And I think this would be a good segue to just talk a little bit about the retention that you alluded to earlier, what you're seeing there, and how do you kind of plan to keep users engaged? And then we can talk about how you kind of plan on monetizing.

Sure. So I'll say it based on some comments that I've seen online that really summarize it best. Even if you're not a big movie fan or a big sci-fi fan, A group of Neil Blomkamp fans summarized it best by saying, I cannot wait to play inside of a Neil Blomkamp movie, right? So the experience that we give people is that of playing in a movie where they can literally decide the direction that this movie takes and they can really engage with this rich, rich lore and experience. So of course, as I said before, we're just getting started, right? We are here. With a foundation of content and a foundation of storyline that we're now going to build and expand this massive, massive, you know, new Bloom Kipp universe on top of. And that's what's going to keep people retained, right? The story, the lore, the continued expansions that we will continuously drive, right? Season 1, Season 2, etc. It's a very, very long-term view that we take on this building out of this massive universe and its lore and the experience that we want to give people.

Yeah, I mean, you have— I think you mentioned 200 to 300 employees, right?

360, but who's counting?

300? Well, no, I mean, that's impressive. That's a, that's a village right there. Uh, how do you— like, what percentage of them are, um, focused on the developing the lore and keeping that flywheel going? Uh, like, what percentage of the team is, is focused on that? And, um, Like, just give us a sense of that. Sure. Process.

Yeah, so I don't have exact numbers, but of course we have Neil Blomkamp and his team that is focused on, you know, all the visuals and how the whole story kind of develops. Uh, with Richard Morgan, you know, that is focused on, you know, the actual writing of the story. We have, of course, you know, our artists that refine every single little detail of, you know, there's the little engine and the fire comes out on the Slam Fist all these details that technically are not necessary for the game but give you so much more of an immersive experience. You haven't probably gotten into the details of the game yet, but we have an arm that allows you to become invisible. And this arm worked beautifully. It's great. No problems at all. But suddenly, an update showed up, and I literally had to collect my jaw off the floor because the arm had these incredible animations that kept going back and forth on it, like completely, from a technical and functional perspective, unnecessary, but created such an awesome feeling about just putting that arm on and running, and you're seeing that animation on the arm, or the little engine with the little fire, you know, that's bursting on the Slam Fist. And then when you use the Slam Fist, the fire goes out and slowly recharges, and the fire gets lit up again. So we got artists that are working on the craziest details that give you the most incredible immersive experience. Across the board, everywhere, with every single nuance and detail of the game. In this context, it's also, I guess, important to add that everything that you see in the game has been painstakingly custom designed and developed. We went as far as 3D printing a lot of the assets and then scanning them back in again on top of a person because it created more photorealism of the clothing naturally draping over the body and things like that. It's been insane. To see, you know, the magic that happens behind the scenes. I live in Puerto Rico, but I regularly go to the Frankfurt office where our headquarters are. It's incredible to see the level of detail and the level of care and love and passion that our team is putting into this.

So, yeah, of course. I want to talk about retention. I'm thinking about like what success looks like for you guys. Say that you— Fortnite has 650 million registered users, daily active. Are like 1.1 million. So there's like a big, big discrepancy. How do you think about that relationship for you guys? Obviously, you alluded to 8.5 million wallets. How many of those are playing? Like, what's the KPI that you most care about? Is it like daily, daily active players, weekly, monthly? And how do you see that ratio relationship evolving?

Well, so again, we are not at a point yet where we have statistically relevant reports assembled yet because it's been only 2.5 weeks out of early access.

Fair enough.

But in my, in my opinion, right, what matters most is daily active that then become monthly active, that then become yearly active, right? Continue telling a story that makes people come back, right? That to me is the most meaningful aspect of this, right? In the longevity of it, creating this world in this universe that people just want to spend time in, that they want to spend time with their friends in. I'll segue a little bit, but I saw during the pandemic, my own children, right, started, you know, going from school. They went doing the school at home. Nobody could hang out with anyone. All the social experiences started happening for multiplayer games, primarily battle royale games. All of the interactions and, in essence, social status came from what type of skins you were able to earn in which season of the game. And blew my mind when the first ever concert happened inside of a game, which was, of course, Marshmello inside of Fortnite. And my kids would sit on the couch, FaceTiming their friends halfway across the world, dancing with their virtual avatars and their virtual skins in front of a virtual stage together with their friends that also were dancing their virtual avatars, virtual skins while being on FaceTime together. And it blew my mind. I was like, this is how, you know, kind of the future is shaping up to be. And it doesn't matter what we as older folks or adults think about this. What matters is what the next generation is using this technology for, how the next generation is embracing this technology, and to meet them where they're at. So coming back to your original question, that's where I see, you know, us being, you know, at the pinnacle of success, which is providing these types of experiences for years, if not decades to come.

Yeah, absolutely. I'd be remiss if I didn't ask. It sounds like, you know, developing this is not cheap. AAA games are very expensive to produce. As much as you're willing to disclose and share, but I think it would be just useful. Sure. Just for general context, like how long did it take you to do this? I think you mentioned like over 3 years, right? That you've been kind of cooking. I'm curious, just the evolution of the company, the cost structure, fundraising, and kind of how you plan to monetize and, you know, this success that you've had.

Sure. So number one, it's been actually 5 years of cooking. So there's a very, very famous phrase in our intro that you will see once you install the game. It's the main kind of game show host lifting his hand and saying, "It took a lot of hard work, but we finally did it." And so that's really such an appropriate phrase. It's one of my favorite phrases out of the game because that's exactly a reflection of how much work it's taking and it took and will continue to take for the team to provide the absolute best kind of Battle Royale 2.0 experience to our gamers. 5 years in the making, close to $100 million raised over that time. It is absolutely expensive to build a title of that caliber and that quality. And what's more important—

does that make you one of the more well-capitalized Web3 games?

I would think from a gaming perspective, absolutely. I mean, there's been other games that— or other projects, I would say, that did some crazy raises. But I think from a gaming perspective, yeah, we're probably one of the best. Capitalized ones. But that's not the most important part. The most important part is that, as you guys all see, proof is in the pudding, so to speak. Everything is built already. So by the time we go mainnet, everything built, everyone can see and touch and experience what the actual experience looks like, right? We didn't leave anything on a roadmap for future development. Everything is built. That's one. Two, to get to your very, very important question about monetization. Our really only monetization method is a completely optional $11.99 per month Battle Pass OTG Pro subscription. That is our main monetization method. We do take a small commission on marketplace transactions, but the main monetization is our Battle Pass subscription. What does that Battle Pass subscription get you? Number 1, we have full parity with all other battle passes out there. So you get your content pack, you get your XP progression that allows you to claim other items as you go through the battle pass and progress on the battle pass. But in addition to that, it allows you something that no other battle pass in Web2 gaming allows you to do, which is to sell the items on the marketplace. So that's really the main, main feature that we believe will lead to, and currently has shown to lead to, a much higher conversion rate than a traditional battle pass would lead to. But again, I repeat, it is completely optional. So only if you want that content pack, only if you want to progress on a battle pass and earn other items, only if you want to be able to trade on our peer-to-peer, gamer-to-gamer marketplace would you purchase that subscription.

Got it. So you need the pass to be able to have ownership and transact these items?

Not quite. You still have ownership. You still have ownership, right? But you cannot transact, you cannot sell.

Right, right. You got to pay to come into the marketplace.

You have to pay in order to sell and in essence monetize your experience.

Yeah, got it. Okay, thanks for clarifying that. Very good. And that goes live. That's not currently live now, is it? It's sort of coming.

It's currently live in testnet, but it is currently live. So on PlayStation and on PC, you currently can purchase a battle pass subscription, and transact on the marketplace. And therefore we are one of the only Web3— forget even Web3 gaming— one of the only Web3 games that— sorry, Web3 projects that has already revenues.

Yeah.

So before even mainnet is live, we already have revenues.

Nice. What percentage of users have paid or these are are subscribing to this daily pass or this pass?

Again, I'll repeat, to be statistically relevant, we'll wait, you know, probably 60 to 90 days post early access to start kind of looking and analyzing and slicing and dicing the data. But what I can say is that the conversion is significantly higher than our traditional battle passes that do not give you all these extra unique features that we have.

Nice. Would you say that that's probably the most important metric other than daily, monthly, weekly, and monthly and users?

For us as a company, you know, in order to continue growing, developing, bringing out IP to the market, etc. Absolutely. I mean, that is what will fund ongoing development. That is what will fund the expansion of our ecosystem, which is also important to touch on, you know, to bring other IP onto our AAA gaming chain called GunZ. So that is all important for the continued kind of build out of this. Absolutely.

Yeah. On the last segment of this episode, let's just transition to that because you alluded to the token. Maybe that fits nicely into this kind of ecosystem that you mentioned. Like, what is the role of the token eventually? And how do you see this ecosystem and other IP coming into the platform?

Absolutely. So again, I love, as you might have noticed, I love compartmentalizing things. So on the token side, the token, of course, will be the gas token for the chain, right? No questions asked. That's kind of its main utility. There's some other utilities coming as well that we'll announce closer to mainnet, but its main purpose, of course, is the gas token on our chain. In terms of the ecosystem, as I mentioned, we've developed the wallet, the NFT marketplace, the blockchain scanner, a companion app, a companion game. All of these things we will allow other Web2 gaming studios, and potentially if you find good ones in Web3, those as well, to white label. It's a permissioned chain, permissioned ecosystem where we will invite very specific IP that we feel is appropriate for our ecosystem to white label all these components, help onboard them, etc. And if you look at it from the perspective of a Web2 gaming studio that wants to kind of dip their toes in Web3 and get their feet wet, you know, I call it Web 2.1, 2.5, and 3. And I'll explain in a second what I mean by that. But if a Web2 gaming studio wants to dip their toes into that, where do you think will they go, right? To some Web3 native chain that has, you know, blah, blah, blah, thousands of TPS and this much TVL and blah, blah, whatever. Or to a chain that has tens of millions, if not hundreds of millions of actual real gamers, that has a game on console, that has a development team that's gaming native? Of course, to the latter. Right. And that's where we will start onboarding and helping traditional AAA gaming studios get their feet wet with Web3 technology. And by those 2.1, 2.5, and 3, what I mean by that is that I call it like blockchain light. You just convert all of your assets into trackable blockchain-enabled assets. You have an in-game marketplace, but that's about it. 2.5, you add a non-custodial wallet or self-custody wallet that a user can then extract these assets to and do with them as they wish. And then of course, full-on Web3, you add a sustainable token economy. And that's the journey that we can take traditional Web2 studios on to have them start embracing Web3 technology and their benefits.

I know we've been cooking for 55 minutes. I'd like to maybe just, I don't know if there's anything else on the grand vision that you wanna touch on before I just wanna more general questions.

The really big thing, like I said, is that this is not just about off the grid, even though that is of course a massive, massive, massive success and we'll continue building that out. This is really about the bigger vision of there being a AAA gaming ecosystem, the Gunzee ecosystem, that will be growing and expanding and bringing on, you know, cool IP, both third party as well as first party over time. And that's really the big vision behind it, right? And all of these components have to provide this incredible, awesome experience to the gamer. That is absolutely the core of everything. Yeah.

Off the Grid, the game. Gunzilla, the platform. It's a—

Gunzee. Gunzee.

GunZ and then eventually you, you will presumably develop internally perhaps another franchise, another game, and then invite other IP that you think fits with your user base and is aligned and then it's permissioned. So you'll have a little bit more curation rights there.

Curation rights and also make sure that only sustainable economies get launched on our chain, right? Make sure that our gamers and our community, you know, has a good experience with the game, has a good experience with the economy, has a good experience with asset ownership. So permission is a very, very big part of that.

Do, on that point, do you see more perhaps Web3 games or, you know, traditional franchises? Like, what do you think would be in 5 years' time? What percentage of other games that are coming inside, what would be Web3 native or kind of Web2 trying to have a Web3 strategy?

Initially, it will be all Web2, dipping their toes in Web3. It will take a little while, in my humble opinion, for Web3 games to really start building differently. And we see some early signs of that, but there's definitely some cool IP cooking. And we believe that there's— I believe that there's some projects that can absolutely do that and do that over the next couple of years. But there's not nearly as much as in the traditional Web2 space where for decades, right? It's been about the gamer and the gamer experience. So I would say that for right now, it's of course much more likely to find incredibly good and engaging Web2 IP than it is to find incredibly good and engaging Web3 IP. But that will change. We absolutely hope that we will spearhead a change where gaming projects and game developers in Web3 will say, holy crap, like, this is the way to do it. And then, you know, follow the path that we blazed.

Yeah.

No, absolutely.

I think success and why I became very excited and want to have you on the pod is because I think there's a very credible shot here that you flip the script and you really open people's imagination to, oh, this is why Web3 matters. It's the ability to— the agency. It's the ability to transact in the marketplace and you own the item. And from so many people that have come to crypto, from the likes of Vitalik to so many others that have played, are gamers, and you get rugged at some point. You have the bad experience of having all this XRP, investing all this time, and then just, you know, being deplatformed or just not having a good experience with your in-game assets. And it's really bad, you know, it sucks.

Absolutely.

And maybe I might add the community aspect of it, like, like streaming is a huge category. Like, it's almost like, uh, uh, uh, like modern-day gladiators, right? People just it's an entertainment category in its own right. It's the— so that, that the viral coefficient of that with crypto community elements, like crypto is really good to capture attention. Listen, Theodore, it's amazing to hear the story. We're all rooting for you because I think it's— we need more of these proof points to touch normal users. And I think the, the, the early success that you guys have had is incredibly encouraging. Um, of course I'm drinking my Kool-Aid because I believe the gaming can be truly transformed. But the way we've done it as an industry hasn't been the right approach. What you guys are doing, and perhaps in other projects, I think is the right one. And it begins and ends with it has to be a beautiful, it has to be a very fun game to play. And everyone that I've talked to loves the game. And really kudos to you guys for building an amazing game over the last 5 years. And I know it's not easy, but yeah, thanks for coming on and sharing the story. It was really amazing.

Thank you so much. Really, really appreciate it. And for, you know, our viewers and listeners, please follow us on socials @PlayOffTheGrid on X. Go to your PlayStation Store, go to your Epic Games Store, download Off the Grid. You can find information about how to do that on playoffthegrid.com. The proof is in the pudding, as they say. Try out our game and see what we're working on. Thank you so much for having us.

It's Friday, so you know what I'll be doing over the weekend.

Thank you, guys. Hey, everyone. Thanks for watching today's episode. Just wanted to quickly thank today's title sponsor, SKALE. SKALE really is one of the best chain experiences out there today, and I've used so many different chains. There's a reason they are gaining so much adoption in both gaming and AI use cases. Hit the link in the show notes to explore the SKALE ecosystem.