S3 #04 What’s the story behind NFTs for marketing?

[00:00:00] KRISTINA: Big brands are dipping their toes into the NFT world. What does that mean for you?

[00:00:05] INTRO: Welcome to The Power of Digital Policy, a show that helps digital marketers, online communications directors, and others throughout the organization balance out risks and opportunities created by using digital channels. Here's your host, Kristina Podnar.

[00:00:23] KRISTINA: Today, I've invited Chris Clarke, CEO of Kokoswap, to help us understand why more and more corporations are considering NFTs. Chris, thanks for coming to hang out today.

[00:00:34] CHRIS: Thank you, Kristina. Thanks for having me.

[00:00:36] KRISTINA: So, from Coca-Cola and McDonald's to Asics and Gucci, we've seen existing brands using non-fungible tokens or NFTs in their marketing mix, for those new to the NFT world. Give us a quick primer.

[00:00:51] CHRIS: We're obviously seeing a massive explosion now and I think NFTs is on everybody's lips. I think it was the new word that buzzword of 2021. And I think people are just really starting to slightly understand what NFTs is. It has a lot of different layers to an NFTs, but really, it's just unique ownership of a one of one digital asset. It can be distributed on the blockchain, which is a verified, distributed ledger. People are seeing it a lot, really with the individual visual arts, especially with the JPEGs, which is possibly the most popular. I just think it's, yes, it's just now creeping into the gaming world. So, it's going to be a really exploded from here on it.

[00:01:41] KRISTINA: So, what's really the appeal of NFTs? How are you seeing brands using them right now?

[00:01:47] CHRIS: Yeah, good question. They use it in so many ways, really. I mean, you've just seen, I think, the Super bowl, every person who attended the Super Bowl got a kind of memorabilia NFT, and that's going to be a collectible item in maybe five to 10 years. If you sort of produce a collection of 10, especially the first one is always going to be something that people are going along that want the hand. But yeah, the brands are now coming into this space. We've seen Adidas coming in. And so, they're just tying themselves with certain brands and projects that were already in the space. And I think in the next couple of years, we'll see it see a larger chunk into the space by then.

[00:02:34] KRISTINA: So, is it mostly speculative at this point, or are there an actual return on investments that businesses are aiming for?

[00:02:42] CHRIS: No, it's not just speculation. I think we're past that stage now. I think it took a while for the brands and corporations to really understand what it is. And now, it's a case, so. I think the bigger brands will do something where they'll probably acquire a company, which is what we really saw with Microsoft and Activision Blizzard; rather than affect a business model, they are more than likely to buy into a project. The brands are all going to be coming into this space in 2022. You can see.

[00:03:20] KRISTINA: I'm certainly excited about it, but Chris, I'm the digital policy girl. So, I'm going to put on my other hat for a moment and say it's also been a bumpy road in a way. And there are some bumps that come with the opportunities; what are some of the downsides associated with NFTs? What should brands or teams be thinking about?

[00:03:38] CHRIS: Because he is an unregulated space at the minute, we have seen a lot of bad actors coming to the space. And I think we had something early the other week where we had a lot of Open Sea attacks, which is an NFTs marketplace. I don't think that was an actual fault on his behalf. I think that was just of people were signing and connecting to a fake Open Sea account. And then when they pressed and entered the account, then they got their NFTs hacked. So we are seeing a lot of things like this, but I think because it's a new and emerging market, I think everybody just really needs to do the due diligence with everything. And I mean, these things over time are going to iron out, really.

[00:04:30] KRISTINA: Any advice you have for our listeners? I was thinking more along the lines of obviously there's the straightforward or what I think are straightforward policy considerations, like IP ownership, maybe the environmental impact, anything that they should be considering either as risks or as opportunities to turn rest into opportunities.

[00:04:50] CHRIS: Yeah, there are some good blockchains out there. Like I said, all this innovation and infrastructures but real deal, so I think a lot of these newer blockchains are now going carbon neutral. We can see that with Fantasma and certain NFTs as well. So, I think it's pretty much like it's like the steam engine and the revolution. We have all the technology being new. It is slowly improving. And now, with the emergence of the Layer 2 and ZK rollups, and I think the crypto mining as well, we'd be; it's just a proof of work. We can see that being a lot more environmental value safety as well. So, yeah, it's just improving a lot.

[00:05:37] KRISTINA: Chris, I do a little unscientific survey. I went out and asked 50 people. What is Kokoswap? You know what they told me those in the U.S. thought it had to do with cocoa puffs, which it does not, right? There's nothing to do with cereal!

[00:05:52] CHRIS: Oh, no. We did have a little bit on the branding side, the thought process behind that as well. We wanted something to resonate with people, so that's good. It's like, yeah, it's British.

[00:06:05] KRISTINA: So, I like it; actually, it's funny some of the folks in the EU and in South America, they thought that it had to do with environmental preservation or tourism experiences, but just to set everybody straight, tell us what is Kokoswap?

[00:06:19] CHRIS: Yeah. It's a massively multiplayer play-to-end game, and that's just focused on competitive battlefields and arenas. So, the gamers will be able to come on to the game, and from the very first moment, they can choose to go in the directions they want to go into. We have three different types of monkeys that they can choose from, be the racing monkey, the fighting monkey, or the intellect monkey; we've got various games in there we've catered to all, all types of gamers. These things where they can come on to the game, go into the treehouse, build their treehouse, make friends in there, share ideas and strategies. It's going to be a case with the NFTs side of things, where they can evolve the monkeys that they train and nurture through the tree house, through battling other players through play, to learn, and play versus players.

[00:07:22] KRISTINA: I heard that NFTs gaming could be one of 2022s biggest new trends. And it'll be hard for developers and publishers to ignore. At least it seems that way. What can we expect for the future of NFTs gaming? What do you see happening? Not just throughout 2022, but the direction that we're all heading in.

[00:07:42] CHRIS: Good question. I think now that we were seeing last year, I think with the blockchain gaming, I think the games, very simple, there wasn't much interaction in the games. But now, because it takes a long time to develop these types of games and we've been working on it for quite some time now, it's not easy. I don't think we are there at the triple-A level game that these top gaming studios, Aurora, in the blockchain space. I mean, some of these games, they work on them for six to seven years. But the web3 element to these games is all about building a community and being able to get people to own part of the network, which is what web3 is rather than the web2 aspects of the game, which is basically just the social webs and the control that they had the over data. So yeah, the gaming space is going to be the next stage of crypto, really, and we're seeing a big adoption of people coming into the space. I think it's 10% every year. We have at the minute, we have three billing games out there, so it's, it's increased.

[00:09:01] KRISTINA: Yeah, it sounds like it's a shifting space, which is fun and interesting, right? Also, engaging in terms of having a level playing field and having everybody be able to participate.

[00:09:10] CHRIS: Yeah, totally, it's all really focused about all, any part of the network and being a model of a community as well. I mean the game is we're doing these types of things, before, but they're just, couldn't take that value out of the games that we're playing in and move them off the chain and into and into the real world, which they're able to do through NFTs now.

[00:09:32] KRISTINA: So for any digital manager that's out there and they're looking to work more in the gaming space, right now, who should they be looking to hire? Because I was listening to a podcast that you did. And I think it was last month and my son heard FIFA. And his eyes just like popped wide open. Cause he understood that you used to play FIFA or you still do, what type of skillset and background should most of the digital teams right now be looking to add, in terms of skillsets, if they're looking to position themselves for the world of NFT and gaming in 2022 and beyond?

[00:10:04] CHRIS: Yeah, good question. I think really the approach that we're taking on is that we have hired, we've got a huge team now of over 30 specialists, gamers. But the real aspect besides that we're going for is artificial intelligence. That's going to be in the game and augmented reality. We have got a lot of top data scientists from the best institutes in the world, who are going to be focusing on all the data points that we can collect from the user, that is going affect the benefit of their gameplay and them to be able to improve and progress in the game. I think how projects do it is they need to have something that is really different, really specific, and just have a slight different niche to.

[00:10:59] KRISTINA: We're talking about NFTs, we're talking about artificial intelligence, thinking virtual reality, immersive realities, obviously all the makings of the metaverse. How do you see Kokoswap contributing to the evolution towards the metaverse?

[00:11:15] CHRIS: Yeah, so again, we use AI and artificial intelligence, we will be using things like geolocation, so people can come on to the game with augmented reality and they'll be able to play the game in their location and view the world through the game and through the real life. And with that AI as well, we were doing something different, again, as I say, we've got a lot of very highly skilled, qualified gaming data scientists who, who have worked in, in these fields for many, many years, who will be doing a lot of virtual.

[00:12:05] KRISTINA: I have to say I'm grinning because I'm thinking to myself, I've never heard data scientists and gaming use next to each other in a sentence. And so I like that. Those are like two full aspects....

[00:12:16] CHRIS: So how it works is when the gamer comes on into the game, from the direction he takes it the game, obviously the more users come on into the game, we'll be able to be more accurate and pinpoint with our data. But the actuality takes and how he battles, how he bites, how we combat or dictate the personality and the character of his avatar monkey. And this will be expressed in the facial expressions on the monkey itself. So, he, if he's not nurturing the character, if he's not feeding, he'll have to come on into the game. He'll have to feed him certain times, nurture, all these human natures, kind of, things that everybody really has. And there'll have to be a special bond and the way he develops and grows his monkey through all the evolution stages he wants. The monkey will take that through the game. So, it'll be a transfer from the real world to, to the digital world. Even things like if he's overworking, his monkey will be disappointed. It'll have to rest. We have a treehouse area where there are different beds; if he has a good bed, he'll have a good night's sleep. His energy will increase. And that's one aspect, so, yeah, so it's going to be, it's going to be the bond. That's really what we're focusing on between the gamer and his monkey.

[00:13:49] KRISTINA: Are there also female monkeys?

[00:13:52] CHRIS: There are both female and male monkeys. We think it's important to have both and to have a lot of women coming into this space as well, which is exciting.

[00:14:05] KRISTINA: And so all of this is certainly exciting. I can't help but put on my policy girl hat again and ask about safety, privacy, inclusivity. Obviously, gaming is fun. I think it's fun anyway, lots of opportunities, to me, it's also neat that you can blend the analog world, of nurturing, caring, doing better by getting rest, so you're taking some, some good emotions, analog emotions that have always been around and integrating them into playtime. But what about safety? I'm thinking about addiction. I'm thinking about younger children getting into the space and spending maybe too much time, any concerns around safety. Is there anything that you're doing right now to ensure that there's a good balance?

[00:14:52] CHRIS: Yeah. Again, that is one thing that we're super focused on as well; with the collection of data that we have, there'll be, there'll be ways of being able to see how much time players reading articles, how long they're in the game. We'll be able to monitor all that and all the, and for all these data points we can then focus the way we're going to build out the next stage is the next levels, but also, key point, individually, how users are, and from that, we can make certain changes that need to be made. So we will be able to monitor all that type of behavior, data, rather than personal data, and make the changes we need to protect the people.

[00:15:44] KRISTINA: That's a good thing to hear; it certainly makes my heart happy. I know that you mentioned Disney's looking to hire NFTs to also develop in this space. Tell us a little bit more about what Disney's up to. Are they a serious contender in gaming?

[00:15:59] CHRIS: Yeah, Disney will be the biggest there. And therefore, a lot of these brands really need to move as such yet into this space because when they do come into these spaces, it's going to be pretty epic. Because everything, everything is talk, and everything is an NFC. I mean, how many Disney movies have they been? How Disney princesses as the being characters, artifacts, songs, everything is, I mean, the financial wealth that they will have when they want into to this space, is, is going to be incredible. But again, it's interesting in this space because it gets crypto the way we see it is a case of there's something for everybody. Like you have different genres, maybe sports music, so it's just kind of what web two didn't do. Crypto has now just put the value side of things into it that people can now transfer through trusted permission and listen to open way; it's going to be exciting. We're going to see a lot of big brands coming in. We're starting to see a lot of sporting teams come in. Clubs, I think Manchester United at a partnered with Tezos Man City now got partnered with Sony. So, they have gone and have a virtual stage in which they can interact with their fans. So really what this is all about is just being able to, rather than the bigger companies having to rent their space of the likes of Facebook and Apple and other platforms, they just have this direct relationship to their consumer, and it's just going to be a real big feed loop of value—just being able to be transferred from the user to the companies as well. So, there'll be getting the real value that this shouldn't always show, deserve the consumer, rather than just having to take that value. So, it's going to be really interesting.

[00:18:12] KRISTINA: Well, we both said that big brands are dipping their toes into the NFT world right now. Everybody's talking about the metaverse. A lot of us are arguing, is the metaverse here yet. And arguably no, but we're obviously evolving to that space for teams, digital teams, and for companies that haven't truly dipped their toe into the water right now. What advice do you have for them? What should they be really thinking about for 2022?

[00:18:36] CHRIS: I think there should be considered it and looking how they can adapt and quickly react to what's going on. We saw this happening with social media as well with the likes of the Facebook game and certain platforms. And, in the e-commerce side and the fashion and sales and distribution, a lot of companies didn't want to react. They didn't want to change the business models because there was happy the way they may be worth it. And the fair doubt, because it's normally the indie companies, the smaller companies who can, who can react to move the fastest and quickest in this space. And this is, this is how you see this, this big shift and a lot of new emerging companies taking over. So yeah, but he's still early on, there's a lot of time, the property, they're probably looking into this space, probably very patient, but we're going to see a lot of things happening this year and next, and I think the metaverse is perhaps, probably going to be the most valuable thing. I can't remember who said it's going to be a $1 trillion market. So, it's a; I think that's what all the investors are after at the minute, the metaverse all the Bitcoin.

[00:20:07] KRISTINA: And let's see who gets into the first heatwave of the race, right?

[00:20:12] CHRIS: Yeah. Yeah. I think there will be a lot of, a lot of spaces out there. Metaverse is very decentralized, and a lot of good projects out there. And you see many people from these FinTech companies who are now jumping across are these Silicon Valley companies because they see the incentives and the see where the future is, the future lies. So yeah, we've, we've everything that's going on. And we've certain things as well, robotics, genetics, this new monetary system management too. And we're going to be seeing a lot of big changes and the companies; it's a lot to take in. It's a lot to take in, but there are a lot of interesting people out there that they can listen to and take advice from. So, yeah, it's, it's moving quickly.

[00:21:01] KRISTINA: I think you just said it well because it was top of mind for me, which is, there's a lot of activity. There's a lot of people; there's a lot of noise. How do you see through the noise?

[00:21:12] CHRIS: Oh, my brain is on fire sometimes. It's trying to keep one eye on what to do with the project side the things, we've got Comicon event and that we're doing. So, we've got a lot going on. At the same time, we're working on the game, and we're talking to a lot of people in this space, a lot of exchanges, a lot of things that we could on a big stake in is going to be going live again in March. You've got to keep one eye on what you're doing it. One eye on obviously a lot of changes because everything's moving so quickly and it's fascinated to see what other games to do and all these different defined components and financial elements and, and rewards and how, how people, how games especially are doing it because there are so many different ways that people are, providing yield on certain activities and certain ways that you can incentivize your customers, and that's the biggest thing we're looking at is being able to give the value back to the customers and to the gamers. And, and slowly in time, hopefully, a business model works and it fun and engaging came out. Yeah, we're looking; we're happy with what we do.

[00:22:26] KRISTINA: I think that's great advice for everybody who's listening. Chris, I love that you're saying yes, lots of noise, lots of activity out there, but slow down. Listen to your customers with this. It's just what it's all about at the end of the day, right? If you don't build something that customers will see as valuable, engaging fun, they're not going to take it on. And so, always come back to who you're doing this for why you're doing it, how you're going to do it. And it sounds like in a space where everybody's rushing or seems like they're crazed, there's time. So don't rush. It is what I heard you say—a slow down. Focus on what's important. And it sounds like that's what you've done at Kokoswap? Taking your time over the years, gotten the infrastructure right. And settle yourself in for the long-term.

[00:23:07] CHRIS: Yeah. I mean, it's really, it's just super important, obviously. We've we, we've got a lot of consultants and a lot of people in the gaming space, we've taken a lot of the advice of a lot of people who will be working with them, everybody is super helpful. And this is what this is. This is what is happening. We've worked free, and therefore we've seen massive growth in adoption. But again, what I would just say is a, get to know the people who, working actively in this space, be careful how people, moving in ethically around you. And, and it's just being able to really find what you're passionate in. and from that build your community from there, or, and you'll find your space.

[00:23:59] KRISTINA: Great advice. Thanks so much, Chris. Again, folks, Chris Clark, CEO of Kokoswap, really appreciate your time today, Chris. Thanks for joining.

[00:24:07] CHRIS: Thank you, Kristina. It's been a pleasure.

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