#29 - Yat Siu

Balaji Srinivasan (0:00)

Yat, welcome to The Network State Podcast. I'm glad to have you here.

Yat Siu (0:03)

Thank you for having me. It's great honor to be here and excited about our conversation.

Balaji Srinivasan (0:07)

Awesome. And for those people who don't know, just give me, give the quick background to Animoca. You're a large investor, you do gaming, you do all kinds of stuff. Give me the, give me Yat on Yat.

Yat Siu (0:15)

Yeah, I guess the quick snapshot is Animoca today is probably one of the biggest investors in Web3, particularly you could call it in the altcoin segment of thing. So of course we have a lot of Bitcoin as well. We have over 600 portfolio companies to date.

We started with gaming, that's what we're known for, but we're in AI and D-Pen and all sorts of things at L1, L2s as well. We very much believe in this construct of the shared network effect. This is why we sort of invest so broadly in the space. But what would maybe be a little different is that we're not a fund, so we invest out of our own balance sheet.

Balaji Srinivasan (0:44)

Oh, interesting, okay.

Yat Siu (0:45)

So everything is basically out of our own balance sheet.

Balaji Srinivasan (0:48)

And what did you start as?

Yat Siu (0:49)

Sorry, what?

Balaji Srinivasan (0:49)

What, where did the balance sheet come from? Like Google, for example, Google funds Google Ventures out of its own balance sheet. Game company.

Yat Siu (0:56)

We're still a game company. We drive revenue from that. And then we were once a small listed company in Australia, and we raised capital for some of our first acquisitions, like the Sandbox, for instance, our investment system, Axie Infinity. And that took off a lot back in the 21, 22, sort of, I guess, NFT Ethereum peak days, which hopefully will come soon again, at least on the Ethereum side. And we obviously monetized that, continued to invest, you know, and over the ecosystem, and we believe in that. I think the other thing, though, is that we are now also operating in the space. So beyond being an investor, because of the balance sheet, we also create yield from the assets, we're basically trading, and we're also helping companies launch their tokens, doing an advisory type business. So it's expanded a lot more from that. And we're almost a thousand people worldwide, so we're not a small operation in the crypto context. Last year, we had over $300 billion of revenue, with about $95 million EBITDA operating-wise, and we're sitting on billions of dollars of mostly altcoin assets, and of course, the healthy chunk of Bitcoin.

Balaji Srinivasan (2:00)

Very, very impressive. So one thing that actually I think makes it even more impressive is, gaming has always seemed to me to be very hard, and here's my understanding as to why. First is, it's like, gaming is creative, and so it's kind of like writing a hit novel, or like making a hit movie. Yeah, I'd love to order a hit movie on command, but it's not that easy to do, right? And especially even a hit movie that stands the test of time is even harder to do, so you might get a spike for a game, and then people get tired of it, and it goes away, number one. And then number two, it's also very technically hard, because people might have patience with the SaaS interface and so forth, but everything needs to be AAA for like an AAA game. And so, you know, this is something that one of my friends has talked about, which is the Silicon Valley or the tech way of building user interfaces, which is HTML, JavaScript, CSS, which has long page load times and so on and so forth, versus the OpenGL or the, you know, basically the 3D graphics way, you know, whether it's Unity or it's Unreal.

Like, that way of building interfaces is vastly more responsive. It's more rich as an interface. And in theory, there's this enormous gap between how we build business interfaces and this alien technology that's out there, right? And one company that's actually somewhat used that, or not somewhat did, Figma, where they did WebGL in the browser, and that was a big part of how they were able to do what they were able to do. It's also why it takes such a long time to load Figma sometimes, because they're basically loading a second kind of thing within the browser, and it uses hardware acceleration and so on. So Figma shows what is possible maybe with gaming. And now, of course, I'm talking about AAA desktop games as a thing for mobile games, but mobile games still have the mechanical issues, creative issues that I mentioned.