00:00 • Tom
Welcome everybody to the ‘Evolution of AI and Gaming Panel.’ I’m Tom Shaughnessy, and I’m one of the co-founders of Delphi Digital. We’re a research firm and a venture firm, and we have a Labs division, the whole nine yards there. Today, I’m joined by Aaron McDonald of Altered State Machine, of Non-Fungible Labs, and a bunch of plays I think everybody knows. If you don’t have a Fluf or a Party Bear, not going to make it. I’m also joined by Brooks Brown who continually blows my mind in the wrong way that I’m thinking about gaming and crypto and how the space should be moving in the right direction. I’m so excited to get started here. Aaron, let’s start with you. Why don’t you give a brief background and then we’ll head over to Brooks?

00:39 • Aaron
Yeah, so Aaron McDonald here. I’ve been a technologist for twenty something years now. I started in engineering, but made my way through to the executive space in telco and IT and then into the startup world. I’ve been in crypto since around 2015 and full-time since 2016. For my day job, I run two venture firms as a GP, but in my spare time I co-found with three startups. One of the exciting ones most recently, that Tom mentioned before, was the Altered State Machine, which is a way to bring artificial intelligence to the masses through NFTs.

01:28 • Tom
Love that. Brooks, what about yourself?

01:31 • Brooks
Most recently, I’m the founder of a company Consortium Nine. We’re building a project called Nor, which is, as Tom mentioned very flatteringly, is trying to change the face of gaming, but very much crypto gaming and how gaming is integrated with crypto chains, NFTs, and how we do all those things. It’s a whole discussion, but my background comes from finding ways to marry technology with story worlds. I cut my teeth a long time ago in marketing and then developed my own game teams. I won a Webby for best online game, ultimately with VR specifically, which was a dream project to work on. I won Tribeca and Sundance and a Lumiere for a VR piece I directed called Hero. I’m super jazzed about this because, Aaron and Tom, both of you are people who I respect in this space and who I’ve had many offline bullshitting, fun conversations with, but a lot of good online ones too, so I can’t wait.

02:26 • Tom
Both are fun. I prefer the in-person ones, but it just hasn’t happened yet.

02:31 • Brooks
Today I went off about how riddles work with you on Twitter. We’re a weird group.

02:53 • Tom
Well guys, let’s get into it. AI in gaming is extremely buzz-wordy, right? What does that even mean? What exactly is an AI’s role in gaming? Why is this time different? The stuff nobody wants to say.

03:23 • Aaron
Well, I think the way that the Altered State Machine’s been looking at it is that the opportunity now exists for us to introduce personal ownership and training of AI in a gaming context. That leaves the door open for us to change the way that AI interacts in a game. Previously, I think one of the issues was that you had this small group of people determining the outcomes, and in a way that meant that AI’s were singular, universal force in a game context, as opposed to being unique individual characters in a game. That notion of having an all-powerful AI that was doing something, that was collecting data from everyone and being able to play better than you, or even the notion of botting, which has been seen as a negative thing for a long time in the game world, where it causes an unfair advantage.

04:38 • Aaron
Now that we can flip that and not only create unique individual AIs that are uniquely trained by individual people, but the problems also that existed with this superpower in the game start to go away and you democratize access to it becomes fair. It’s not some unfair advantage. Now we can introduce mechanics that allow for intelligence to evolve inside a game and interact with other intelligence that evolve in a much more organic way than we had before.

05:15 • Brooks
Yeah. I would just echo that it comes down to definitions, and that’s the argument people end up getting into. With AI, we end up with the same problem. People have been talking about with AI in games for a very long time, and primarily what that really means is scripting, the “If this, then that,” scripts that are written and designed in a specific way. I’m not denigrating the work done because there are some extraordinary bits there, but when we start talking about modern AI / machine learning / emergent AI is able and capable of and how we can play with those things, it changes a lot of what we use AI for in a game. You don’t necessarily want a single player game. I’d go back to my favorite enemy AI in Fear, which, granted, that game is now seven hundred years old.

06:05 • Brooks
It shows how little far we’ve come in time, but you design AI with a specific reaction in mind to continue a story or a world that’s particular to that vein. When I move, I want to do a thing, or I want a player to feel a certain way. That’s what level designers do, and that’s what AI designers do primarily in games, is they try to make it fit. It doesn’t make sense if the big, hefty guy (because it may be the smartest thing) runs the other way, because he knows the master chief is coming. You need someone to go into it like a big dumb brute. AI is one of those things that definition-wise, I think we’re starting to see: what can we do when it comes to emergent little creatures running around our spaces?

06:51 • Brooks
What does that even look like? How do we even handle that or think about that? From a game’s perspective and design, it’s incredible. It’s a different place than traditional AI, as they say inside of games for sure. It’s going to be interesting.

07:05 • Aaron
Yeah. I think AI technology has progressed as well. The kinds of things you can do now are much more sophisticated, and we’re not out of uncanny valley territory yet, but we’re getting close to that.

07:25 • Brooks
Yeah. We’re starting to figure out exactly what those limits really are and playing in a much more interesting spot for sure.

07:31 • Tom
What exactly does this feel like though? Say I’m a young gamer 10 years ago and I’m playing Grand Theft Auto. I’m stealing a car, I’m running away from the cops, and there’s computer players everywhere. If your guys’ vision makes sense and works, what is the difference for when I pop on my TV and I load up GTA7 and your views are fully in there? What is the experience like?

07:58 • Brooks
A game like GTA, I don’t know if you’d want all of them to have these kinds of AIs. A lot of that would be the same. Instead, think about it as Pokémon. What if in Pokémon, you had creatures that actually had a responsive AI, that you had to build a relationship, that did things in battle, whether or not they listened to you, as if they were a cogent, agent-based entity themselves? The average pedestrian in GTA doesn’t need any more processing power than they currently have. Sure, maybe we can have fun emergent worlds with complex AI, but we’re a ways from that. The idea of a single creature that I can play with, or a GTA game where you have a singular enemy instead of a multiplayer game; AIs that are built and designed and thought through and trained to find you and kill you.

08:46 • Brooks
These kinds of things become interesting on a singular, one by one basis instead of in mass. I think to the point of what Altered State is really aiming at is thinking about singular AIs rather than the brunt of a million people coming at you. Instead, it’s the thing.

09:04 • Aaron
It’s important to pick your moments. Just like in crypto in general, you want to use blockchains and DLTs for very specific things. When you start applying them to solving general technology problems, you get into lots of issues and make lots of mistakes. You want to pick when to use an agent and in what format. You think of all the deterministic games out there where you hit a button and wheel spins and something happens. Those are really great candidates for this, because now we can take that same activity in gameplay style and supercharge it and give the chance at what I’d like to call as ‘more genuine randomness’ with these agents who are somewhat sentient, interacting with each other, and learning off those processes each time, as opposed to just the outcome of a spin of a dice.

10:07 • Aaron
That kind of game format is a good one for it. I think you can see a path to where you can introduce agents in the context of different game formats, but if you think about it from the point of view of, “How would I build a game to consume AI?” as opposed to, “How do I take a game and put AI in it?” I think that’s the next most important thing is: think of the context of the game as if you started out with this, and then imagine how a game could evolve from there, as opposed to slopping it into a format that already exists. Even in existing formats, take something like a first player game that has team mechanics: putting say me and four mates fighting a boss versus me and four agents that have trained with me and learned my style and follow me around the world and helped me as a companion in that task -….

11:16 • Aaron
…I think that those can start to happen and existing formats too. If you played World of Warcraft, you remember some dude with four shamans running around nuking everything. People hate that because it wasn’t available to everybody. It wasn’t built into the game mechanics, but if it was democratized and everyone had access to do that, then you’re on a level playing field, and then it’s a matter of your configuration choices and team choices and tech training choices. Then it becomes a skilled game again.

11:48 • Brooks
Yeah. Thinking about it in real time is one thing. Aaron’s points generally on that I think are spot on. Even the ability for us to utilize these agents or these AIs to do world generation – one of my favorite games, Door Fortress, hands down one of the more extraordinary games that’s ever been made, literally has an entire period where the world is built for you by scripted events that happen inside of it. It’s incredibly complex, but the ability for us to have AIs that live inside of a space, and let’s say we just fast forward a thousand years, what happens to the space? What do people have? Where do the gangs end up? Think about Grand Theft Auto, where you just basically leave people running in a simulation for a thousand years. Where do the gang lines shift? Who is in charge of what? How do any of these things move?

12:39 • Brooks
Jumping into that emergent world and playing inside of a space in real time with other real people – there’s a lot of ways to cut when it comes to the proper use of AI inside of these spaces for odd side directions of things.

12:53 • Aaron
Yeah. I don’t want to throw away the car racing format too, because we are bringing out the Adam Car Club, which is an AI and ASM powered car racing game where the drivers are AIs. That is something that you can do I think that will be fun for people as an evolved version of Zed Run, where the agents who drive these cars can learn. You can create genealogical trees of drivers that have traits of some and traits of others. You can put them into a real race where they race each other in a track rather than just that dice spin scenario. So, those formats can be used. You can interject those things if you think about it right from the start.

13:45 • Tom
Are you scared of any of this? You have everyone in this crowd in the future who can own these characters, these AIs, these NFTs. We won’t get into the specifics because it’s beyond the scope of this conversation, but are you at all afraid that you have AIs in games or ecosystems that have a lot of financial economies built around them, and now you have AIs that could potentially run amuck, right? Like in the real world, Elon Musk is afraid of AI. We’re all scared of that idea where the robots take over, but it’s very hard to see what’s actually going on when it’s all code. Where does this run a foul? Are you afraid of that? Are there safeguards? What’s the thought process there?

14:28 • Aaron
I feel like the world Elon’s afraid of is inevitable. Trying to run away from it is silly. Whether we’ll see that in our lifetime or not, I don’t know, but it is inevitable. Our mission right now with the Altered State Machine is to give more everyday people exposure to how artificial intelligence works, how you can interact with it, and learn enough so that they can help make intelligent decisions that shape the way the stuff evolves. Right now, it’s ‘over there’; it sits in a dimension that the everyday person can’t interact with and get their hands around. Some corporation is doing something in the background process of a digital interaction that I have, and I’m not a part of that process. ASM is, at its core, a way to democratize the access to and understanding of and ownership of AI back into community hands and individuals’ hands, as opposed to some amorphous being in the sky. Gaming is a tool or a whip, depending on if you see this as a fight or not.

15:53 • Aaron
Gaming allows us to teach people in a fun and engaging way: the steps of how to interact with artificial intelligence, what it can do, how it reacts to you, how you can own it, and how you can apply it to different kinds of tasks. Gaming would be the first of those tasks, and then eventually other more sophisticated tasks, going up to creating utility intelligence that works personally for us, our digital twins. That entry point of gaming is a nice way to ‘bread crumb’ people up to that point. Hopefully, in this future context, we have a much more educated population that understands how these things work at a deeper level than they do now, and the potential for communities to own the outcomes of these machines, as opposed to just something that sits over there in the cloud that you don’t have any control of.

16:58 • Brooks
If you want to get the philosophical side of things, I don’t necessarily believe AIs can do things that I would call new or the creative process. They’re good at the combinative process, i.e. figuring out how things go together. I’ve never seen an AI create something new. New is an interesting thing. As we may play a game like Dota and we can be defeated by a five man team of AI’s inside of Dota, the ability for us to understand metas very specifically in video games or in the real world is a thing you then need to build an AI to specifically dedicate towards that. Any AI doesn’t have the ability to understand the meta and the singular. At least as they exist now, there’s a lot of complications around that. I have a lot less worry about AI as we currently define them.

17:43 • Brooks
It’s my old joke; people say, “Oh, what if they start thinking like people?” It’s like, “Yeah, why don’t you tell me how people work and then we can figure it out,” because we don’t even know how does thinking work as a thing. It’s literally like the biggest question of philosophy, and technology is not anywhere near it. We’re doing AI. Keep doing AI. It’s combinative and and utilizes the information that exists. It’s not emergent yet.

18:08 • Aaron
If we’re being super philosophical, we’re all AIs, like it’s already happened in some future.

18:15 • Tom
I am scared to smoke weed with Brooks because he’s going to ask me these questions, and I’m going to start losing it. What is life? Who are we? I’m only talking to Brooks before 9:00 PM.

18:30 • Brooks
That’s fair. I’m not a fun person to smoke pot with. It ends up becoming like a weird Jesus mode because I don’t shut up. You think I don’t shut up now. Imagine me stoned. It’s no fun.

18:45 • Aaron
I’m going to roll the dice. I’m going to do it one day, Brooks.

18:48 • Brooks
It’s worth it.

18:51 • Tom
Fine then. I’m down to try, guys. Twist my leg. The other question is: everyone in the crowd will eventually own these things, right? Why do they want to own AI? Why do they want to own these models? Why do they want to continue to train and to pay for this and upkeep and have a censorship resistant record and model and file of what they’re creating? Why does that matter?

19:14 • Aaron
I think there’s a simple answer to that question. Let’s assume that two models exist. One is that the AI is owned by someone else, and I have no control over them. The work I put into them as a player or as a user benefits mostly the entity that owns them. Given the choice of two equal scenarios, one in which I own the thing, and one that I don’t, what do I choose? Nine out of ten people choose ownership. The idea that these things won’t exist is silly. They will. Now we just must make the choice of, do we want to own them or not?

20:17 • Brooks
“What is ownership in the world of crypto?” would be my first question. Right now, if you look at any of the NFT projects, such as Bored Apes, you own that NFT. I don’t own any Bored Apes, but I can use any of them, essentially. They are public goods but privately owned. It’s an extraordinary thing crypto can do. The ability for us to do the same with AI, where ultimately ownership is less about ownership and more about control, which is what ownership really is about. My ability to train and be one who works with and does that, if that’s my thing, and it is, but if that’s not your thing, that’s fine too. The ability to use my AIs can very quickly can run dividends for people who do own them.

21:03 • Brooks
It’s one of those things where again, it’s about the ecosystem of the entire thing: the ability to use, the ability to control, and the ability to grow that thing is happening. You get to pick where you sit on that gradient.

21:18 • Aaron
Yeah. As Brooke says, even if you don’t want to own it, you might want to use it. That’s good for the people who do want to own it.

21:28 • Brooks
Exactly. It’s all positive.

21:31 • Tom
Brooks, I’ll go to you for this one because we started out with Aaron. A lot of people mistake the benefits of AI and NFTs and gaming because they come from a traditional world. They see mainstream media and they’re like, “Oh, this is a joke. It’s fake. We don’t want this,” and we’re literally offering them all the things that they want: the ability to transfer their ownership of items from game to game, the ability to profit from them without going to an open market, things like that. It might be more important to monetize the items around the game versus the game itself, what you described elsewhere as the magic circle. What is your view on the community involvement on the financial side here for AI and gaming? How does that interplay?

22:15 • Brooks
One of the great difficulties is doing it responsibly and doing it in a way that isn’t predatory. Predatory delivers gains; I’m never going to say it doesn’t. There is absolutely good reason to be a bastard. There’s a reason people are bastards. It’s the way it works. In the long-term, it makes it more difficult. It’s easy to be very short-term thinking. The world of AI, the world of crypto, the world of gaming – all these things are places that we absolutely can and have seen people be bastards. Talk about how angry the gaming population is towards crypto. They’ll feel that towards AI if it’s touching crypto. Anyone who says otherwise isn’t paying attention, but the other side I’d say is they have justification for being angry. The anger isn’t just about crypto. With AI people, it’s not just about crypto or vice versa.

23:05 • Brooks
It’s the way that these tools and the way that their world has been hyper financialized and exploited with them at the bottom of the pile. It’s the thing that every time it gets worse when there’s a leap. When it gets a lot worse, the anger boils, and it will. I think for us, the question is going to come down to how we can really change things to be more revolutionary and to be more open, and (as I just outlined) the way that we can enable ownership, but not totality of that. Like the ability for me to buy a Van Gogh, I then control what happens to that Van Gogh. Is it going to be shown in a museum? If I buy or commission a piece of art, I show it in my house to people I like. No one in the world gets to see this beautiful piece of art. I get to choose which museum it goes in and how much tax break I get.

23:54 • Brooks
I get to go through all these things. The reality is that the seven-year-old, who it could inspire to become a great artist and lead them down that pathway, never gets to see it. A world instead where AI, gaming, art, and these hyper creative things including science, archeology, all these things that are generally seen as non-profitable entities, because ultimately they need to be publicly owned. They need to be public. Well, we have that. These things can be public. They can be public goods, yet also privately owned. It’s a weird thing crypto does. It’s a very difficult thing to wrap your head completely around, but we’ve had this discussion. Over time, it’s going to get better. Specifically with AI and the way that the Altered State Machine is doing it is one of the reasons I like you guys and I’m jazzed to see where you go.

24:49 • Brooks
As we turn that on its head, people can have their control for those who want it, other people can use it and utilize it as they go about their day. They can use the system Netflix is secretly hiding for recommendations because that’s how privacy works. Instead, make it public, make it on the token. Suddenly, we’ve got everyone using it. It’s being refined, but it’s a public good. I don’t have to pay to use this thing. It’s a very strange way of thinking through these things. As this revolution really starts taking over, we start getting into a place where the anger diminishes and people can start to see, “Oh, there’s actual possibility here.” There are still going to be bastards, but it’s an interesting turn that we’re able to start making.

25:25 • Aaron
Yeah. Brooks is right. If you want to make an impact, you have to think long-term. The goal of ASM isn’t to make lots of money building games, although that might be an outcome. The goal is to give the public the ability to own and control or the communities to own and control artificial intelligence. That’s the goal. There’s a means to an end there, and that requires financial incentives because otherwise people don’t get off their ass and do things, but at the same time, that’s not the end. That’s a means. I also think like this whole anti-crypto culture from the gaming community, it’s an interesting thing because a lot of the arguments that are put up are quite weak. As an example, “NFTs are bad for the environment.”

26:25 • Aaron
Cool, dude. There are many more PlayStations than there are Ethereum nodes. PlayStations are Ethereum nodes. They have eight GPUs in them and they’re crunching the same kinds of calculations as an Ethereum node does. The notion that gaming is green and crypto isn’t is just a stupid thing. If we had invented blockchain or decentralized ledger technology and used it first to give gamers ownership of their in-game assets, and that was the first use case, everyone would love it because people naturally want to be able to do that. The fact that, as Brooks mentioned, it started as a financial game and then has become a tool that can be used for these other things, has put it in a context of a world that those people hate. Because it touches that world, that hate translates to it. If you stripped away everything else, and the only thing that existed was the ability for people to own their in-game assets and trade them freely, I think that would have been a smash hit.

27:46 • Brooks
We’ve talked about this, but I disagree strongly on the in-game assets thing. The general thing of what you’re saying, I agree with. The in-game assets and these other use cases, we’ve seen how they already are fairly abusive when they’ve turned gamers into labor forces, rather than people playing.

28:07 • Aaron
That’s a layer on top, Brooks. I think that there’s this distinction between building up a story, a history, a lore, a relationship with a character that ultimately someone else owns, and then me being able to be the owner of that ultimately. The layer you’re talking about is this kind of false economy that exists on top of it.

28:38 • Brooks
We take the best part about the digital world which is infinite and lack of scarcity, and we basically introduced the s*******t part of our real world on top of it. This is my point is that the layer you’re talking about – (because I agree with you here) that is incredibly difficult to parse except for people who this is our literal job is to think about this and care about this. This is one of the battles we have, and it’s going to be a continuing thing. Again, how you do it is you do it by showing. One of the things early crypto has had a problem with and I think for a long time, is that it’s always been show, not tell. I promise that we’re going to be getting there at Ethereum 2.0 for quite a while. There are a lot of promises that are coming that just don’t hit versus building the damn thing, actually having the AI (like Altered State) or actually having the game developed (like our world in Nor), actually having these things and going look, “You can see how it works. The code is out there. It’s public. I’m not hiding things. This isn’t some weird s**t. You tell me, am I full of s**t?” Then you can have a real conversation. I think that’s where we’re going to really have a fun time.

29:52 • Tom
Where do you think this happens though? When Bitcoin came around, the whole generation of TradFi bankers were like, “Screw this, we’re not going to do it.” They didn’t uptake it until 10-11 years later, or more than that at this point. Is this a generational shift that will happen with current gamers? Or do you think we’re going to have to wait several years until the younger generations are just born into it and understand it?

30:18 • Aaron
I think to a certain extent, like humans hate change, anything that comes along that’s new is the devil to start off with. Radio was the devil. TV was the devil. Electricity was the devil. Steam engines were the devil. At some point, probably fire was the devil. I think that there’s just a natural resistance to change from people who have been in an established mode for some time. You can’t escape that with anything except time and education, but mostly time.

30:56 • Brooks
I agree wholly. I would say that the challenge comes down to: I don’t think it’s waiting until the next generation – I think it’s about making sure that the onboarding matches whatever’s current. In online games, as an example, they were not a thing in the nineties. They started to be, it was a pain in the ass. If anyone ever had a LAN party or modem dialed up their friend to play Command and Conquer or Duke Nukem or Doom like I did, you know that it was cumbersome (as a cute way to put it). A lot of people were like, “Obviously this is going to be the future,” but it didn’t take off until technology got to point A: until the ease of it wasn’t setting up some weird subnet or b******t, but just literally connecting to Xbox live. When you get to this point where it’s tapping a button and everything else is magic, users will do whatever comes naturally. We just have to be able to find that way to do the thing.

31:45 • Tom
Totally makes a lot of sense.

31:50 • Aaron
One last point: it’s our job as creators to make it more fun, better, more interesting, more socially connected games than these people have ever played before. That’s what it starts with. I think this whole notion of play to earn is just a hiding to nowhere because games are about escaping reality. They’re about putting aside your daily grind. Although, you can get into a grind in some games, but putting that aside and going and living in another world and it being somewhere you couldn’t be normally. If it becomes a job and the design of the thing is to drive a workforce, then that not only is a false economy, but it’s a terrible game. The start has to be, “Build better f*****g games than they’ve ever seen before,” and then they’ll want to play them.

32:55 • Brooks
Just told build off that: There’s an old saying, and people don’t know what it means: the customer is always right. People think that means that it’s literally that the customer is always right when they talk or they yell at you, but no – people suck. That phrase came about because, if you have a hardware store, and everyone walks in and goes, “Hey, do you sell towels?” And you say no and then the customer walks away, if that happens every day, then, “Oh, just so you know, the customer’s always right, and you should have towels.” This is the reality of how these things work. For us, when people, gamers, and players say, “F**k, I don’t want X. I refuse to have that.” Understand why, utilize that, and run with that because what the customer wants is what they want. You’re never going to change someone’s mind. You’re just not going to do it.

33:42 • Tom
Aaron opened with the idea that we have to make better games. How are you doing that when Activision has 10,000 employees?

33:50 • Brooks
Oh, that’s an easy one. Activision has 10,000 employees because of the games they build. Those 10,000 employees aren’t designers making brilliant move systems or gun systems. They’re people building 9,000 different types of skins for one specific gun and doing that over and over. There’s a joke that there’s multiple people in the world of Rock Star. Their only job is the texture on tires, because that’s what someone goes to art school for, apparently. They put out so much content that that’s the reality. Instead, what you can do and what you’re able to start seeing, because (by the way, Activision Blizzard is having trouble finding talent and Ubisoft is having trouble finding talent) because the people who’ve been doing this, see those games, and they’re like, “I don’t want that.” They care about the art that they’re making.

34:39 • Brooks
This is not just saying creatives or artists. Engineers are artists in their own rights as well. Everyone is. They care about the stuff. I am going through the process right now where I’m finding people who give a s**t and saying, “Here’s what I’m doing. We’re looking at really changing the face of games. We’re a small team. Do something interesting and just prove it,” and we’re getting amazing talent. I had an interview yesterday that we were able to find someone who I was shocked was as excited and down as they were. When we’re talking about these concepts: the idea of what play means, how we can make all games free for people, how we can redefine what it means to financialize them, and we can properly build out a financial aid system around games that matters, and that doesn’t completely f**k over everyone involved. The people who are good at making games want to do that.

35:30 • Brooks
They don’t want to make Call of Duty 92 unless it’s an interesting game. That’s the fun part. If it’s interesting, they’ll be there. If Activision is doing something (they’re not), then they’ll be there.

35:44 • Aaron
Just to build on that, because I agree with all of it: the most innovative things to hit us from a technology perspective always started with small teams, and the bigger an organization gets, the less innovation they get. It gets to be incrementalism. We see that right across the board. There are very few established companies that do something truly new.

36:15 • Brooks
Our team is seven people. It’s me and a few other people and one art guy and a couple of engineers, and we’re just doing it. We have other dev teams that are also small groups, but you don’t need the 10,000. Once upon a time, Star Wars Connect came out with the wonderful connect dancing of Han Solo and Darth Vader and the Emperor even, worth checking on YouTube. No one believes that when they see it. That was like 2,500 people working on that. Size doesn’t mean a good game. budget doesn’t mean a good game – that was a horrifying game. These things are awful, but it’s because of their size quite often. There are brilliant giant games as well, but the creative interesting people want to do interesting things. Small teams, thanks to tools and technology and to everything that’s become hyper democratized – it’s insane what you can do on a home rig and build.

37:10 • Aaron
Also, Altered State Machine specifically makes it possible to build more engaging games that have better meta games inside of them with fewer people, because you’re giving these agents parameters and then they are figuring out how the game works. You’re not having to program all that stuff in. You give them objectives, constraints, and rewards, and then they go and figure out how to play the game and how the gameplay works. The manpower, time, and money required to build an ACM game of the same kind of game that might exist today is going to be much less.

37:57 • Tom
What’s the difference here on the gamers’ involvement on building out these games from past games to blockchain based games? Like if I’m a dedicated user: I want to build a world, I want to build a skin, I want to augment an AI to do a certain task and a game, whatever it is – what’s the difference between those user builders today and what you are building and those user builders in the past?

38:24 • Brooks
The user builders today: just look at Roblox and how easy it is for them to take basically child labor and make an exceptional amount of money off it. It is horrifyingly exploitative and disgusting, but the idea of what Roblox has done is they have tools that kids can use to build games that other kids like to play. It’s an incredible thing that that exists.

38:49 • Aaron
And those kids pay to do it.

38:51 • Brooks
And they pay to do it. Yes, they do. Yes, they do. So, these tools and these things are more powerful than they’ve ever been. Once you’re able to get past Roblox level, and you’re starting to get into things like Unity or Unreal and this other side of gaming, or even [indistinct], which has leaps and bounds as an open-source engine just been extraordinary to see as it happens – it’s so next level and so easy. My joke now is for people who want to get in games, “Cool, spend two months and do it.” Like, just grab YouTube and go.

39:25 • Aaron
Honestly, that’s how Altered State Machine came about. David literally did that. He went on to YouTube and figured out how it all worked.

39:38 • Brooks
That’s how Nor came about, and that’s how I learned crypto. Anything can be learned this way now. It’s amazing.

39:43 • Aaron
The other interesting thing in your 10,000 Activision employee’s scenario is: you can introduce the notion of creator marketplaces into these things as well. In the Adam Car Club game, there will be a marketplace where people can create elements for the cars and put those in the other’s and can go in and start to attach to them. You can create the tools and the systems to allow people to engage in the creative process and make that a community activity. Now, out of your 10,000, there might be a guy that absolutely loves textures on tires, and he makes the best f*****g tires in the world. That’s what he wants to do every day. That could be a thing, and those people could do that, and they can be part of the game ecosystem without being an employee of the company.

40:35 • Tom
I love that. You totally tore apart my Activision comment, and I’m glad because it makes sense. Next time I’ll bring a helmet or something to make sure I’m okay afterwards. The other thing I wanted to get into, on the flip side of this, is that there is a lot of data in these games; applying real-world data, applying external. How are we linking external data and in the game data? I know everyone says it’s so easy, like, “Oh, it’s an API,” but it’s a lot harder than that. How are we doing that?

41:09 • Brooks
I mean, it’s not much harder than that.

41:12 • Tom
It is that easy. Okay.

41:15 • Brooks
To build it, it’s a pain in the ass. Roblox uploading models as a thing, VR chat, which in theory I’m being seen in – the ability to ingest is something that’s growing in a lot of the software, and it’s getting easier in time. One of the big breakthroughs, and it’s people see the beautiful Unreal 5 demos, but they don’t get the idea that I can just have a mode and it goes into Unreal. That blows my mind. Once upon a time, you used to have to send it to outsourcing shops in China to have ninety versions made for level of detail and for distance calling and all these nightmare problems. We don’t have to care anymore. The more we get to these amazing leaps where now we don’t have to give a s**t, we can do stuff. It’s wonderful.

42:08 • Tom
I totally agree. The question I had that I lost my train of thought on before, was that in crypto, in DeFi, and these communities, everybody wants: ownership, they want control, and they want a say. The reality is not many people want to do the work. They don’t want a say, and they just want to enjoy what’s out there. It might be upside. It might be inclusion; whatever it is. In the way you are describing the future of gaming, are you confident, or do you expect all your users to take an active role in defining the protocol parameters, the game mechanics, all the hard stuff that frankly might not be too much fun?

42:46 • Aaron
No. I fully expect most people not to. Even if most people wanted to, it’d be a shambles.

42:56 • Brooks
User-generated content is one of the worst things in the world. It just flat out is. Once upon a time, when social media was first starting, I used to run a UGC contest for Star Wars. We’d get people sending in images, pictures, and drawings. It was always a hot mess with one or two that are decent, and one that’s like an actual artist and you look them up and it’s a professional and it feels bad that it’s such a weird mix. It turns out most people aren’t good at everything. I know it’s a shock.

43:31 • Brooks
Good people exist, but it’s the ability for us to have fewer people and not have it be a thing where literally power begets power. I think that’s the challenge with the current system, even the one we have in the real world. Power begets its own power; those who are powerful become more powerful. We don’t want that, but we also don’t want Steve down the street who just smokes pot and lives all day and likes video games – I don’t want him designing the future of democracy. That’s not the person. Having people involved at the right levels, I think there’s some very good ways to do it. I’m a big believer in sortition. I’ve had this conversation with both of you, but I think there’s really good ways to get around this that don’t necessarily have power beget its own structure.

44:19 • Aaron
I think the most interesting thing for me about the notion of governance, which I think you’re hinting at here. This isn’t a new thing; we’ve been trying to get this right for thousands of years. We still haven’t, but if you look at it, most people aren’t interested in it until there’s a point of crisis. Most people will go along with the status quo until a point of crisis, and then they’ll change. The status quo requires people who are motivated by whatever, to operate it and that are deepening it and want to be doing that as their thing. The everyday person will just go with the status quo until the point of crisis. The interesting thing about the technology, say DAOs for example, is not that everyone can be part of the governance process on an active, persistent basis.

45:24 • Aaron
That’s just a pipe dream. It’s that when there is a moment of crisis, the users get to decide, which is a different paradigm to what exists. Now, if Facebook f***s up, which they regularly do, we don’t have any power to change it in that moment of crisis. The paradigm shift is not that every user gets involved in governance on a permanent basis. It’s that every user has the opportunity to affect change in a moment of crisis.

46:01 • Tom
I love that, and I agree with you. People only come around in times of crisis. You see this with any business, but isn’t that the worst scenario?

46:10 • Aaron
Humans are f*****g lazy.

46:13 • Tom
Yeah. That’s true. Is there any way that you can motivate people pre-crisis?

46:17 • Brooks
This is why I aim at sortition as a concept. I think if you get to the point where you have, let’s say a people’s parliament of four hundred people – there’s a few places that have this. The Greeks who invented democracy, this is what they had. You have random people who are just paid to be in the spot. You motivate them instantly to be in it, and you take care of them. You give them experts; you give them all the things they need in order to learn. It’s this weird thing. It’s the reason jury trials and most of the world does a random selection for a jury. That’s the reason, because we know chance is the best option to have flatness and power. That’s why I’m a big believer in that, and I think there’s a lot of power in governance to do the same with that as well.

47:01 • Tom
Jeez. That’s exciting.

47:04 • Aaron
I, for one, am just waiting for our quantum AI overlord to make all the decisions for us.

47:12 • Tom
I hope I can buy a piece of that NFT. Hopefully get some good control there. How do you think this plays out? What is the hierarchy of control of a game? And second question: when do you get fired by your community?

47:30 • Aaron
I feel like the answer to the second one is that with everything in these decentralized systems, you get to the point where you’re there because you want to be there, not because you’re needed. Being fired is not the right notion, but it’s having the opportunity to not be the person who’s responsible for everything I think is a good outcome in decentralized systems. Also, if you think about it as a protocol thesis, our job is to give the tools to make the protocol successful irrespective of our own activities. That doesn’t mean that we won’t still want to build cool s**t. The notion of being fired doesn’t really fit into that because you can keep building on it independently, just like anyone else can, but being irrelevant is a better position to be in. On the other question, I don’t know if anyone has the answer to it yet. No one’s done it successfully.

48:48 • Brooks
That’s also true. I have a more romantic notion. My son’s four, my daughter was just born just a couple of weeks ago. I look at children not drastically different from this. With a child, you’re building a system. That’s all any of us really are; we are systems. We like to think we’re a lot more than that, but we are a series of pieces that our parents put it into place and society did. We react to the world the way we do as we go. At some point, my son is going to stop wanting to hold my hand when we go out. At some point, he’s going to stop asking dad for different things and help in different places. At that point, if he does, I’ve done my job as a parent. I think with the community, it’s not so much being fired. It’s knowing you’re not needed anymore and being able to go is excellent.

49:37 • Tom
I’m with you. I guess the cultural shift is that it’s very hard for a traditional game dev to come in here and think that they might become irrelevant.

49:50 • Aaron
But they’re not becoming irrelevant because if they’re doing their job, they’re building cool s**t. People will want to use it. You only become irrelevant when you stop thinking about what’s best for the community.

50:04 • Tom
Are they okay with that?

50:06 • Brooks
Real quick though, because I do want to step back. To me, game developers are not at the whim of the community. The ownership of the community is what the developers allow. There are things you just would never change in some games. Some things you just simply wouldn’t allow. If Halo decided to come over and make their version of this, they’re not suddenly going to have naked big breasted women as the main characters running around, even if the community really wants it, which they probably do given gamers. You determine how much involvement your community has. They don’t own you. They own what you allow them to own. The battle and the smart move is finding that balance between you being able to make something great that you can be confident in with them playing inside of the sandbox, but make sure the sandbox is enough that they feel they have proper agency, control, and their own destiny in their own hands.

51:04 • Brooks
If you can do that balanced, any developer can make their way in.

51:07 • Aaron
Also, and the great thing about decentralized protocols is if they don’t like those constraints, they can fork you. That’s the key ingredient there. You might be able to decide as a developer what constraints you put on your users and community in terms of their role in decision-making and then they can be ‘the customer is right’ and just choose to go somewhere else.

51:38 • Tom
Have we explored the link between the developers being the players and interacting with the community in the new age? I don’t know how game development works traditionally, but I’m assuming these guys are in an office somewhere. They interact with the community, on message boards or whatever. Now they’re interacting with the community who own this thing. Day to day, they’re getting feedback and they can implement changes. Is that feedback loop between the developers and the players being one a meaningful difference for new games?

52:08 • Brooks
The specific nature of it is what’s shifted. People don’t remember early Minecraft days, and it’s not just Minecraft. A lot of games do this, where they list here are the features; upvote or downvote what you think I should be working on. Here’s the bug list and tell me which one I should be doing or I shouldn’t be doing. Developers utilize communities in traditional games massively. World of Warcraft would be a very good example of this. They are not above the clouds as gods. They are very much embedded. Very often, most of the developers now even have come as people who grew up playing. My friend Mike works over there in IT at Blizzard. We spent literal days of our lives in that first year of World of Warcraft playing together.

52:55 • Brooks
The specific change is having the way tokens and NFTs work is it’s not ownership in the traditional sense, but it is a meaningful “I am a part of this.” It is an emotion and a feeling with a reality and a contract with it that gives people something more. It feels like it’s mine rather than just the thing I’m playing. The more you have that, it shifts from being a, “I’m hoping the developer listens to me,” which is the case, and good developers do listen – to, “I’m telling the developer what I think ought to be done. If everyone agrees with me, we’re telling the developer,” and that power is very unique.

53:40 • Tom
That’s a hell of an answer, guys. It’s such a new world here. If we took the average of everyone in the crowd right now, and they asked a question for you, what do you think that would be? What do you think people are most confused about at the conclusion of our conversation about AI, gaming and NFTs? Imagine someone comes up to you afterward and they say, “Hey Aaron, hey Brooks, that doesn’t make any sense,” – what do you think that would be?

54:06 • Brooks
It depends on the crowd. I can’t see any of them. Gamers, their question to me eternally is, “Why are you doing this? Why NFTs?” We’ve had hires who are not going public that they’re working for us because they are afraid of backlash, which is significant. It’s the thing. I get frustrated, and the Internet’s an awful place as it is.

54:35 • Tom
We went through that on Wall Street. You leave and your bosses hate you.

54:37 • Brooks
The moment you start in a place of, “All NFTs are bad.”…- Folding Ideas’ made a wonderful channel. His video was excellent with an edge. There’s a frustration I have the entire time is he essentializes the entirety of crypto. When the entirety of crypto is being called these things, it’s the same as once upon a time when the internet was called ‘this.’ It’s 92,000 technologies layered on top of each other, so if you don’t like the shape of that, that’s great. It isn’t a thing.

55:11 • Aaron
Video games cause gun violence. It’s the same meme.

55:14 • Brooks
Break things up, put them together, figure out how things work and re-try to put it together in new ways. That’s what we’re doing, that’s what I know Aaron’s doing. The big push is just going to continually to be, “Look at what we’re doing. Talk to us about it and think through it,” because you’re very right. There’s a s**t ton of these awful NFT scams and crypto things. There’s also a s**t ton of people doing amazing work and really trying to push some new stuff, because I will tell you right now, the old way of financializing games is worse because while you may be angry at NFTs – “You’re selling things in games and blah, blah, blah,” – the way we financialize games over the last 40 years, you don’t realize it, but it’s just as bad. It is just as bad.

55:59 • Tom
Brooks. I agree with you, but I frankly don’t think most people will take the time to think.

56:06 • Brooks
That’s what I say when they’re actually in it, when they’re doing it. That’s why I keep saying, “It’s show, not tell.”

56:14 • Aaron
It’s exactly the same meme as what we’ve said before around the internet or any new technology that comes along. You’re not going to convince people without them experiencing something better and different. You can never explain something that they’ve never imagined before without giving them something to see what that juxtaposition looks like, what the difference looks like.

56:41 • Brooks
To use World of Warcraft as an example: World of Warcraft was a subscription fee game. Those before did exist, but the numbers didn’t even come f*****g close to what Warcraft did because people before that were like, “I’m not paying monthly for a video game. How much does that cost me? That costs me $180 a year.” That mentality….

57:01 • Aaron
The first free to play on mobile, everyone hated it. Like it was, “It’ll never be successful, and it will never be a thing,” and not everyone loves it, but it’s a significant market in its own right. I think we get to the same kind of position that I’m sure you’ll have your diehards that just won’t for whatever reason, (mostly ignorance and lack of education), just won’t change their minds, just like we have with crypto today.

57:37 • Aaron
Also equally, there will be people who take the time, or we will build crazy, cool s**t that people will want to play. People’s perceptions will change because of that. That’s our job – is to prove that we can build better, more fun, more sustainable, fairer games and economies inside of games and just do it. The change will happen because of that.

58:07 • Brooks
Free to play is actually a great example because those of us who were involved in the early part of it, there was an exceptional amount of potential. Specifically, it once was, “Look, anyone in the world can play these games, Holy s**t, and we can make money.” It wasn’t “Oh, great, we can do this and make more money,” which is what it very much is now. The idea of the inevitability of these things is real. They will continue marching. Technology marches, society marches, things push towards all these things. The question is, “Are you going to sit on the sidelines and piss and b***h and moan until it gets something where people who don’t care are the ones in charge and they’re the Zuckerbergs and the a******s at the top who are just screwing everyone, or are we going to jump in and go, ‘Hey, I think Aaron, I think what you’re doing sucks. Here’s how I think we can make it better.’”

58:56 • Brooks
Aaron will go, “Oh, Brooks, I think here’s how what you’re doing sucks.” This is, by the way, a conversation that has happened and will happen again. We need more people doing that because if you’re just going to b***h and piss on the sidelines, you’re doing nothing for anybody.

59:10 • Aaron
Yeah. I’d double down on that. It’s exactly that the people, by in large, who are going to make a difference in this space, actually care about what they’re doing. They care about gamers. They care about game developers. They care about game economics. If you think we’re not doing it the right way, help us figure it out. As opposed to saying, “Your effort and trying to make things better is wrong.”

59:42 • Brooks
Yeah. Totalizing the entire thing as if it’s a single voice, silly.

59:46 • Tom
Guys, I couldn’t agree more. I’m frankly so excited to have both of you out in the future to do some long form podcasts. I love it. Anyone in the crowd listening, you can follow Brooks on Twitter @PlayIsFree. Aaron is @AaronMCDNZ, if you’re not already. Guys, you just crushed your vision of where AI, gaming, and crypto can come into play and why it’s not this hostile thing, but it’s a new era that we’re hoping to get people involved with. I really appreciate your time and thanks for having us.

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