Gabby Dizon - Mapping the Metaverse Economy - [Founder’s Field Guide, EP. 49]

Invest Like the Best with Patrick O'Shaughnessy

My guest today is Gabby Dizon, co-founder of Yield Guild Games or YGG. In 2020, Gabby and his co-founders built YGG around the growing “play-to-earn” economy within blockchain-based games. Based in the Philippines, YGG effectively backs players - who might not otherwise be able to afford to play - in exchange for a share of their profits. Today, YGG is paying out over a $1m US dollars a week to players within its community - largely concentrated in their home country of the Philippines.

The play-to-earn model has seen its most rapid growth in the popular NFT-based game “Axie Infinity”. Players earn tokens within the game which can be exchanged into local currencies or be used to purchase more digital assets. For a sense of how this market has expanded, Axie Infinity has already reported over $1.5b in sales over its history- and nearly $900mn over the last 30 days.

The speed at which these games and the ecosystems around them are growing is remarkable. In our conversation, Gabby explains YGG’s decentralized structure, the unit economics of their business model, and how he deals with the volatility of crypto assets when trying to build a durable, long-term business. We also discuss the broader metaverse landscape, how it might evolve, what might derail it, and the technicalities of building a token-based, as opposed to equity-based, business.

I hope you enjoy this wild conversation with Gabby Dizon.

For the full show notes, transcript, and links to mentioned content, check out the episode page here.

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Show Notes

[00:03:34] - [First question] - What Yield Guild Games is and what they do

[00:04:30] - The growing popularity of play-to-earn games in the metaverse

[00:06:07] - Major categories of digital assets that exist today

[00:08:11] - How players can earn money playing Axie Infinity

[00:10:47] - The business model of YGG and what they offer to players

[00:12:42] - Potential earnings of playing Axie Infinity

[00:15:03] - Possible risks to demand and what the Axie economy could be in a few years

[00:17:54] - Evaluating games that are worth investing in

[00:19:55] - The kinds of things that will be most valuable across games in the future

[00:21:37] - Differences in value between cosmetic and utilitarian in-game purchases

[00:23:04] - Key focuses of YGG over the near future

[00:29:02] - Ways DAOs are better or worse than traditional equity tables

[00:30:11] - The state of YGGs economics today

[00:31:16] - The Guild’s player retention and growing their scholars

[00:32:54] - Barriers to entry for building a competitive DAO like YGG

[00:34:14] - What made Gabby so interested in crypto originally

[00:36:38] - His personal journey to crypto games

[00:37:53] - Jobs that may carry over from the real world into the metaverse

[00:39:36] - Companies that will arise focusing solely on in-game item creation

[00:41:18] - Base layers of infrastructure needed to create the best future for crypto gaming

[00:44:32] - Shared qualities between games that have a high replayability rate

[00:46:40] - Good and bad tokenomic ecosystem designs

[00:48:17] - What the biggest risks are for the future success of crypto gaming

[00:49:26] - What factors will ensure the future growth and adoption of crypto gaming

[00:50:25] - How much fiat flows through Axie and the growing value of in-game assets

[00:52:05] - Whether or not we’ll see purchasable utility items in the future

[00:53:21] - What he’s most excited about for the future of the metaverse

[00:54:52] - The kindest thing that anyone has ever done for him