GameOn Entertainment Technologies Inc. (GET) Earnings Call Transcript & Summary

Sure. Yes. There's a few things that I can speak to there. So a few years ago, we did an execution with Intel. Intel came to us and said, we need to help train our executives in team-building A lot of our executives across divisions don't necessarily work well together or know that they need to work well together. So across 6 continents and 50 countries, we rolled out a -- their mobile escape experiences for Intel. So these are -- I mean, it's Intel and it's Intel executives and the experience was a gamified approach to try to teach a corporate training experience of team-building. So that's a perfect example of this is no longer child's play of trying to figure out gamified ways of engaging a bigger and broader audience. Another example of that, which is a large part of our business, is experiential marketing. So we did a campaign for Bayer Pharmaceutical where they used a 40-foot shipping container. There was a 3-room escape experience. And this thing showed up at events all around the world. It was easy to pick up. It gamified the experience for their consumers that it wasn't just kind of a boring experience to come and talk to a brand. And then with our VR shipping container, I mean, this is well beyond child's play. I mean what we're doing here is a first in putting VR into an environment, a fully hyper-immersive environment where you've got all of these physical effects that are firing at the same time, that all the immersive experience in the headsets are working. So it's a level far beyond where gaming has ever gone before. And the corporations that are jumping on to that are these large family entertainment centers and bigger attraction. Not necessarily kind of your Disneyland attraction parks, but the attraction parks that are looking for that next cool thing that's not just engaging the kid because audiences are changing. Audiences are becoming more sophisticated. They're wanting things that are that much more mind blowing. So whether it's corporate America or whether it's down to a theme park, it's your -- around the block from you, the experiences are just coming to a whole other level.

That's great. Matt, your product is largely B2B and with large corporations as your customers. Help us understand more.

Yes. Again, it's that element of gamification infiltrating other industries such as TV, sports and just content in general. The reason why it is, is because gaming equals engagement. And at the end of the day, content or TV networks, teams, leagues, want people to watch more and fans and consumers are no longer just tuning in to watch the game. Millennials and Gen Z aren't watching the game at all. TV is becoming the second or third screen, even the never screen, in some cases. Our Chairman, J Moses, likes to always say, he hands the remote to his teenage children and says, put on ABC, they wouldn't know how. And that's a huge, huge problem for media. So gamification and tying that into the content, turning -- watching something or consuming content, or in between episodes, turning that into a game through game mechanics like recognition and rewards and progression, bringing elements of video games to watching content is really important. And just to go back to the child's play wording at gaming in general, I mean, it's far from child's play in so many ways. As you know, gamers are athletes now. Soon, I'm sure they'll be Olympians in the not-to-distant future. They're making -- some are making more than many professional traditional athletes. There are stadiums now dedicated just to gaming. So I think that -- seeing that continue to grow will then continue to infiltrate into where else we see gamification applied such as TV and other content.

Shafin, you saw this trend coming years ago hence your investments that you have in the space. Have you seen it migrate? And kind of where do you see it going?

Yes. I mean I think it's really kind of the point Matt made, which is gaming increases engagement. What we've seen is this movement towards whether corporations or companies, whether it's to track customers, really building a community around their IP or product. And then once you're able to do that, the goal is to increase customer frequency, dollar value visit and loyalty. And I think data has shown that when you incentivize that participation, you automatically increase the odds of attracting, retaining kind of customers. And so I really think it just boils down to some gaming equals engagement. It's been proven and validated. And I think what's interesting now is that given that -- specifically the TV scenario, given that TV now might be the second or third option, there are a number of players that are now using technology today. Tim mentioned NFTs, using today's technology to create -- to further gamify the experience as opposed to just having a very one-dimensional. Now you can really extend that customer journey or experience in your products. And it all kind of boils down to, though, is gamification has proven to result in engagement. One quick note, too, it's interesting, I was talking to someone else about this. Most people downloaded the Starbucks app. And I think Starbucks has done a great job and they have these streaks, where -- it's funny, I noticed myself wanting to make sure I go to Starbucks every day for 5 days. Once I've gone 2 days in a row because I get extra points. And there's a -- gamification has become super sophisticated. There's a lot of the human psychology that's gone into coding and programming these things to really take into account ways to impact human behavior. So -- and then there's machine learning and AI that's like optimizing it after the individual person. So I noticed that like Starbucks is feeding me things, they're getting me engaged to want to go, again, customer frequency increases the dollar value of my visit and it keeps me loyal to them.

That's great. We've talked about television in general and sports viewership both declining. Matt Bailey, you're of the opinion that fan engagement should be more like video games. Can you explain more? And I invite Shaf and Tim to respond afterwards.

Yes. I mean this goes back to the dead bodies that are on the side of the road in free-to-play. It's because they haven't embraced the game mechanics that video games have seen be so successful. They're just focusing on the one game mechanic of playing and winning, playing and winning, which just won't work. So why we like to think about video games is, one, because our team comes from video games that J Moses, our Chairman, greenlit the original Grand Theft Auto. Santi, our Chief Product Officer, spent 10 years building the FIFA game at EA Sports so successfully. So bringing those mechanics like Shaf just mentioned, the Starbucks app, that's a great example of progression and allowing users to progress through and earn different points. But then community and rewards and -- when you -- if you think about office pools as why they're so engaging, it's not because you can win $100. It's because you can turn up to the office the next day and brag about being the winner of the office pool. That's the exact type of mechanics that we want to build into our predictive gaming experience and our fan engagement technologies that we're serving to teams, leagues and TV networks around the world. And it's not just sports. It's reality TV, it's news. We're even talking right now to a very popular weather app. Their problem is people open up the app 10 seconds in the morning, they check the weather and they're out of there. So how can we apply different game mechanics like progression and recognition to that audience to keep them more engaged within the experience.

Got it. Tim, fan engagement is not something you directly deal with, but your -- the corporations that are your customers or their fans or their customers or their employees. Help us understand that aspect.

Yes. I mean the engagement in the experience -- our experience for these family entertainment centers is extremely important because they need them to come back. They need them to come back to our -- we selfishly want them to come back to our experience and do it over and over and over again. We've got -- there's 7 missions that are -- that's part of our experience. So the first mission when you blast off into space, you've got to kind of solve this riddle as to what's happening with this alien race that's come into our galaxy and then you progress through the storyline. So for us, the engagement -- it's really important to engage into a story and a bigger, as I kind of throw around this word, metaverse. Our game, we kind of look at is like more of a micro metaverse, I call it a microverse. So you've got to engage someone in your microverse and then you start to engage them into a bigger metaverse story in our story and then within the family entertainment centers that these exist. They want to have people show up. They want to have them stay for longer in their center and play more games. So engagement is extremely, extremely important.

Got it. Shaf?

Yes. I mean, I think it's a couple of things. One, I think now that people are -- I find myself watching a game on my phone, checking my fantasy stats and specifically, we're talking about NFL as an example, also quick snippets. I think people are now used to these quick snippets. So from that engagement perspective, with what Matt was mentioning with GameOn or sports betting in general, I mean it's the game within a game where I think what sports teams and leagues are doing in traditional sports is creating games within a game. So you might be watching a game and on your phone because you realize you've got 2 devices, you're co-viewing with other friends in different type of areas. But you're playing games throughout the game. So it's keeping you motivated to continue that experience and then obviously the rewards and badges that you earn are what keep you coming back game after game. So I think a lot of this is a result of the technologies that exist today, what people are able to do. And just habits and behaviors. Our behaviors have changed with the advancements in technology, the mobile adoption, this idea of like quick snippets where you've seen IPL or Rugby Sevens like shortening the game because people are just not able to sit through a, in crickets, like a 3-day match. So I think a lot of this is -- a lot of the fan engagement using these video game or gamification tools are just a result of like human behavior today and the tools that we kind of have to -- at our disposal.

That's great. I want to talk about NFTs. That word has been that acronym has been thrown around. Nonfungible tokens. Shafin, if you can just, a, briefly explain to us what they are, how they work? And how do you see the role of NFTs in gaming or what utility does it bring?

It's funny you asked that question. I posted a note on LinkedIn today. It was just me trying to explain to my friends what NFTs are. It's a pretty funny picture, which I think a lot of people kind of group it into 3 different types of categories. Before I kind of talk about that, there's one interesting thing happening. Having been in the crypto space since 2012 -- or 2013, we've seen kind of several booms, the ICO boom, the DeFi boom and the NFT boom. And I think blockchain tech is kind of revolutionized and involved in many areas. But specifically in gaming, I think it requires special attention. And Tim had referenced something called play-to-earn earlier. I think there's this gamify boom going on where it's a synergy of the ICO, DeFi and NFT market. I think that's what -- something that's going to be significant. And really NFTs are kind of at the forefront. So NFT stands for nonfungible token. It's a unique digital kind of collectible, traded on the blockchain and crypto games in reference to gaming. They can represent consumables, characters and any other tradable kind of asset. And users can sell their endgame NFTs to peers and earn tokens with these play-to-earn kind of models. But this play-to-earn model, I think -- or this play-to-earn phenomenon I think is a real sweet spot for gaming and for game developers where it's simply giving gamers and game enthusiasts control over -- control and ownership over their in-game assets, allowing these gamers to increase the value of these assets by actively playing the game. And then players in this business model create value for game developers and other players by participating kind of in this in-game economy. And it's interesting because in games like World of Warcraft, players were playing and earning in-game assets, but they didn't own them. And so you would see secondary markets being created for people to buy, sell and trade them. I think what this play-to-earn kind of economic model around NFT has done is let players create new digital assets, trade them via the video game's infrastructure and using the play-to-earn model, players can earn virtual in-game currency, which is liquid and pretty easily sold for other cryptocurrencies and fiat.

Great. Tim, your thoughts there?

Yes. There's a -- I mean it's a huge and exploding trend and it's really just exploded in the last year and even in the last 3 months. It's just absolutely exploded. So we're tracking it really closely. One of our board members, Cathy Hackl, she's known as the godmother of the metaverse, and a huge way that the metaverse is being kind of monetized is by NFT. It's been a big driver in what's happening within the metaverse. So we've been leaning quite heavily on her and coming up with our own solutions of NFT. So not necessarily collectibles, but at the end of the day, collectibles. But one big collectible is an avatar. So you could look at Board Ape Yacht Club and they have avatars. These avatars are trading for $30,000, $40,000, $50,000 in real dollars. So I think the avatar play for us is what we're really excited about because we've just done an LOI on a VR game catalog, a company that powers location-based entertainment facilities, they've got 325 VR games. Every one of those games is, as I'm referring to, a microverse. So the challenge is to connect all of those games in a very easy and tangible way. To be able to do that is to connect them with 1 avatar. So instead of every single one of those games having its own avatar, you would have 1 avatar and that's from the Ready Player One. You've got 1 avatar that you move through the OASIS in. So what we're challenged to do and what we're doing right now is creating a single avatar that will work across 325 games. Those 325 games, you could look at as a location-based VR metaverse. Those avatars themselves could be NFT. There's also some opportunity of doing NFT like easter egg hunt and collectibles. But we're in early days in trying to figure it out. I think at the end of the day, there has to be that play in any platform that we're creating. But we want to be smart about it, not just throw around buzzwords and do something that wouldn't resonate with our community and our audience.

Got it. Matt, GameOn has made some investments in the area of NFTs. Help us understand what they are and how you're thinking about?

Yes. I think, again, like the others, we watched for a while. We -- our Santi, Chief Product Officer was the mastermind behind NBA Top Shot. So he had that background. And when NFTs kind of have exploded throughout the last year, we noticed that a lot of them are just kind of cash grabs and we think a lot of them will kind of fall by the wayside because they have no utility. You're just minting and selling and that's the extent of most of the platforms, right, the VNFT projects out there right now. So we think gamification, again, will play a big role in the next wave of NFTs. We think it's going to be really important for these NFTs not only to look good and feel cool and -- if you kind of showcase them in your trophy room, so to speak. But being able to use those in games or use those to go to an event or watch a movie or however else is going to be really, really important. How we're doing it is by adding a layer of gamification to NFT marketplaces. So if we're working with a league or a TV network or any content that already has that marketplace in place where they're buying and selling NFTs, we can add a gamification layer to it where you can then go and use those NFTs in prediction games or other gaming experiences. And in that process, win more NFTs and then perhaps gain access to exclusive content or the VIP area of the arena. So adding various levels of utility to the NFTs through gamification is how we're making a play. But in general, utility will be really important. And I think we're -- over the next, say, 5 to 10 years, we're all going to be using NFTs in ways that we wouldn't even imagine, like your ticket to an event or listening to an album or going and watching a movie. So really excited for NFTs and the collectible space.

That's great. Thank you. Unfortunately, that is all the time we have. I want to thank all of our panelists as well as everyone listening. If any investors would like to get in touch with any of our panel companies, please reach out to myself or any members of the Lytham Partners team. Thank you very much, and have a good day, everyone.

Thank you.

Thanks for your time, Ben.