Since building a $3 billion video game payments powerhouse with his company Xsolla, Aleksandr “Shurick” Agapitov is now responsible for giving the developer community the tools they need to compete and succeed in the hyper-competitive video game arena.
Having stepped down as CEO of Xsolla last year to create X.LA, a firm which lets metaverse builders earn money as they create spaces in the virtual world, Shurick is further looking to democratise the wealth building and revenue distribution potential for the independent creators who are powering the future of the metaverse and Web3.
In an exclusive interview with Campden FB, Shurick discusses the challenges and opportunities of the internet’s next great step forward.
With the investment possibilities of Web3, non-fungible tokens (NFTs) and the metaverse, are we at the frontier of a new asset class?
There is certainly a lot of excitement around Web3, NFTs and the metaverse, and many people believe that these technologies represent a new frontier for investment and asset ownership.
NFTs have already demonstrated their potential as a new type of asset class. Similarly, the metaverse, which refers to a virtual universe where people can interact with each other and digital objects in a shared space, is seen by many as a potential new market for investment and entrepreneurship. The metaverse has already attracted significant investment from companies, such as Facebook, which is investing heavily in virtual and augmented reality technologies.
At the same time, Web3 technologies, which include decentralised finance (DeFi) and blockchain-based marketplaces, are also seen as potential drivers of a new asset class. These technologies enable new forms of financial transactions and ownership and have the potential to disrupt traditional financial systems.
As these technologies continue to develop and mature, we may see new opportunities for investment and asset ownership emerge, creating a new frontier for investors and entrepreneurs alike.
While there are certainly challenges to be overcome, there are also many reasons to be optimistic about [the metaverse’s] potential.
There are reports that Mark Zuckerberg, a hitherto vocal proponent of the metaverse, is pivoting towards generative AI. In 2021 and 2022, Meta’s Reality Labs, the division housing metaverse projects, recorded a cumulative loss of nearly $24 billion. What does this mean for the future of the metaverse’s existence in your opinion?
Mark Zuckerberg's reported pivot towards generative AI is an interesting development that may have implications for the future of the metaverse. While it's unclear exactly what this pivot entails, it's possible that Zuckerberg sees generative AI as a key technology for creating more immersive and interactive virtual environments.
At the same time, the financial losses incurred by Meta's Reality Labs division, which is focused on developing the metaverse, are certainly cause for concern. While it's important to remember that the metaverse is still a nascent technology, and that it may take time to build out the necessary infrastructure and user base to make it financially viable, these losses do suggest that the road ahead may be rocky.
That said, it's also worth noting that many Meta companies, including Facebook, continue to invest heavily in the metaverse. These investments suggest that there is still a lot of optimism about the potential of the technology, and that companies are willing to invest significant resources to make it a reality.
Ultimately, it's difficult to say what the future holds for the metaverse. While there are certainly challenges to be overcome, there are also many reasons to be optimistic about its potential.
From a creator’s standpoint, do you see more brands and storytellers adopting Web3 and the metaverse or will there need to be more global infrastructure in place before widespread acceptance?
There is no doubt that Web3 and the metaverse offer exciting new opportunities for storytelling, brand building, audience engagement and in the revenue share economy. However, widespread adoption will likely depend on the development of the necessary infrastructure to support these technologies.
One of the key challenges for creators looking to adopt Web3 and the metaverse is the need for specialised technical knowledge and skills. Creating immersive virtual experiences and leveraging blockchain-based technologies can be complex and challenging and may require creators to work with experienced developers and other specialists.
At the same time, there are also infrastructure challenges that need to be addressed. For example, there need to be robust and scalable networks for hosting and distributing virtual content, as well as reliable and secure systems for handling cryptocurrency transactions and other Web3-related functions.
That said, many creators and brands are already exploring the potential of Web3 and the metaverse. We are seeing the emergence of new marketplaces for NFTs and other digital assets, as well as the development of new virtual worlds and experiences that leverage Web3 technologies.
As these technologies continue to develop and mature, we may see more widespread adoption by creators and brands. However, this will likely require continued investment in infrastructure, education and support services to help creators navigate the complexities of these technologies and build successful businesses and experiences.
What motivated you to open the gaming payment facility Xsolla?
Xsolla was founded with the intention of empowering game developers and publishers by providing them with a comprehensive payment and business solutions platform.
I recognised that game developers often faced challenges when it came to monetising their games, such as navigating complex payment processing systems and managing customer support. I wanted to create a platform that would simplify the monetisation process and provide developers with the tools and resources they needed to succeed.
In addition to offering payment processing and business solutions, Xsolla also offers developers access to a global network of payment providers, making it easier for them to monetise their games in different regions around the world. By empowering developers to monetise their games more effectively, Xsolla has helped to create a more diverse and vibrant gaming ecosystem. Overall, Xsolla's mission is to help game developers and publishers succeed by providing them with the support and resources they need to grow their businesses and reach new audiences.
Investing in the gaming, Web3, metaverse, and fintech space can be a lucrative opportunity for ultra-high-net-worth families.
What would you say to ultra-high-net-worth families looking invest in the gaming, Web3, metaverse and fintech space but don’t know where to start?
For ultra-high-net-worth families looking to invest in these spaces, there are a few things to consider:
Conduct thorough research: Before investing in any new technology or market, it's important to conduct thorough research to understand the potential risks and opportunities.
Look for experienced partners: Investing in emerging technologies can be challenging, especially for those who are unfamiliar with the space. One way to mitigate risk and increase the chances of success is to work with experienced partners who have a proven track record of success in the industry.
Consider investing in a diversified portfolio: Given the risks associated with investing in emerging technologies, it's important to diversify your portfolio to spread risk and maximise potential returns. This may involve investing in a range of companies and technologies.
Stay up to date: Emerging technologies are constantly evolving, so it's important to stay up to date on the latest developments and trends.
Ultimately, investing in emerging technologies can be a high-risk, high-reward proposition. It's important to approach these investments with caution and to seek out experienced partners and advisors who can help you navigate the complexities of the market. With the right strategy and approach, however, it can be a lucrative opportunity.
What are the pitfalls of such investment?
Some of the main pitfalls to be aware of include:
Market volatility: Emerging technologies can be highly volatile and their valuations can fluctuate rapidly based on a range of factors, such as changes in regulatory environments, shifts in consumer behaviour or the emergence of new competitors.
Regulatory challenges: Emerging technologies may be subject to changing regulatory environments, which can create uncertainty and risk for investors. Regulations around topics such as cryptocurrencies, blockchain and virtual worlds are still developing and may change in unpredictable ways.
Technological risk: Emerging technologies are, by definition, new and relatively untested, and there may be unexpected technological challenges that arise. This could include security breaches, software glitches or unforeseen shifts in consumer preferences.
Competitive pressure: As emerging technologies become more popular and lucrative, new competitors are likely to enter the market, potentially eroding the value of existing investments.
Lack of liquidity: Emerging markets can be illiquid, meaning that it can be difficult to sell assets quickly and at a fair price. This can create challenges for investors who need to liquidate their investments quickly.
It's important to approach these investments with a clear strategy and to work with experienced advisors who can help you navigate the complexities of the market.
According to Campden Wealth’s European Family Office Report 2022, significant percentages of family offices have exposure to the metaverse (20%) and NFTs (13%). Do you expect this allocation to rise in the coming years?
Yes, I would expect the allocation of family offices to the metaverse and NFTs to rise in the coming years. The growth potential for these emerging technologies is significant and more and more investors are becoming aware of the potential investment opportunities they offer.
The metaverse, in particular, is gaining traction as a new market for gaming, entertainment, brands and social interaction. As more platforms and experiences emerge, and as the technology becomes more accessible, we are likely to see increased investment and interest from family offices and other institutional investors.
Similarly, NFTs have demonstrated their potential as a new asset class for digital ownership and value exchange. As more use cases for NFTs emerge, and as the technology becomes more mainstream, we can expect to see increased investment in this area as well.
That said, it's important to note that these emerging technologies are still relatively new, and that there are risks associated with investing in them. Investors should approach these investments with caution and seek out experienced partners and advisors who can help them navigate the complexities of the market. Overall, however, I believe that the allocation of family offices to the metaverse and NFTs is likely to rise in the coming years as these technologies continue to mature and offer new opportunities for investment and growth.