Frederic Chesnais, CEO of Atari: The Legendary Atari's Big Move into Crypto

Frederic Chesnais is the CEO and Chairman of the Board at Atari. In this conversation, Frederic and Anthony Pompliano discuss the history of Atari's brand, how cryptocurrencies can incentivize new types of work, why gaming is finding product/market fit in crypto, and what Atari plans to do to capitalize on the crypto opportunity. -----BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. They do loans ranging from $2,000 to $10,000,000, and they're perfect for helping you reach your financial goals of all sizes. Visit BlockFi.com/Pomp to learn more about putting your crypto to work without having to sell it. -----If you enjoyed this conversation, share it with your colleagues & friends, rate, review, and subscribe. This podcast is presented by BlockWorks Group. For exclusive content and events that provide insights into the crypto and blockchain space, visit them at: https://www.blockworksgroup.io

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:01Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off the Chain, simply the best podcast in crypto. Let's kick this thing off.

• 0:13Anthony Pompliano?

  Frederick Chesnes is the CEO and Chairman of the Board at Atari. In this conversation, we discuss the history of Atari's brand, how cryptocurrencies can incentivize new types of work, why gaming is finding product-market fit in crypto, and what Atari plans to do to capitalize on the crypto opportunity. I really enjoyed this conversation, and I hope you do as well. Before we kick off this podcast, first a word from our sponsor BlockFi. As many of you know, crypto investors store their digital assets on exchanges or in cold storage for long-term safekeeping. However, this strategy doesn't help them grow their investment holdings or build overall wealth. With the new BlockFi interest account, users can now securely store

• 0:56Anthony Pompliano?

  their Bitcoin or Ether at BlockFi and receive 6% annual interest, paid monthly in cryptocurrency. 6% is an absurdly high rate. It's the best rate in the industry. I highly suggest you go check out blockfi.com/pomp. Again, that's blockfi.com/pomp to sign up and start earning crypto today. Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 1:42Anthony Pompliano?

  Alright guys, bang, bang. I am here with Fred. Super excited to go over everything that you've been up to. So, well, thanks so much for coming in.

• 1:51Speaker 01

  Thanks for having me.

• 1:52Anthony Pompliano?

  For sure. All right, uh, give us your background. You are not from America.

• 1:58Speaker 01

  No, so I'm from France, uh, was born there a long time ago.

• 2:02Anthony Pompliano?

  French people always say it so much better than Americans, France.

• 2:06Speaker 01

  France, yeah.

• 2:06Anthony Pompliano?

  In America, we're just dumb and we say French or France.

• 2:10Speaker 01

  No, but so I'm, uh, was born there. I stayed there until the, um, two thousand and four. I was working between France and the, and the US. And I stopped, uh, you know, I had to, I, I stopped that. I had to come here because I was just going to bed at two AM, three AM. So I was just like a, a disc jockey in France. And so the, my background is very interesting because I started in finance. Starting also as a, as a, as a CPA, then got bored of numbers and decided I wanted to become a lawyer to make deals, big deals.

• 2:45Anthony Pompliano?

  Okay.

• 2:46Speaker 01

  Uh, nobody, nobody's perfect. So I became a lawyer in France and then I said, you know what? What I really want to do is really big, big, bigger deals. So I went into investment banking, spent, spent five years at LaZord. And this is where I started to invest and advise in the space. So it was a long time ago. It was in nineteen ninety-five. Uh, and I was in Paris and I started to really look into the space. But at the time, you know, PlayStation, um, wasn't really there, Xbox definitely not. So what I, what started is that I was, one of my clients was Infogrom's Entertainment. And, um, it was at the time, you know, bigger than Ubisoft.

• 3:30Speaker 01

  So we were advising the company and I was going quite, uh, quite well, quite along with the founders. So five years later in two thousand, I left the bank and I joined the company. So we teamed up and, uh, at the time we were just, were mainly doing internet, not really video games. Um, but.

• 3:50Speaker 01

  In two thousand and one, we all, you know, woke up after the the big crisis and we all came back into the company and we said, okay, now let's do it. We have something that's, you know, we were losing a lot of money, but we had just acquired Hasbro Interactive from Hasbro. And in inside Hasbro Interactive was the Atari brand. And we knew it. At the time, everyone was very excited about games dot com, which is a URL that I ended up selling a few years later because we had to make ends meet and we had to redeem a lot of that. At the time, we had five hundred fifty million euros of that, because we had bought everything. G T Interactive, Hasbro Interactive. So we we knew that we had the Atari brand and all the games inside.

• 4:35Speaker 01

  So we renamed gradually our companies because we had subsidiaries in every country. So we renamed our companies Atari. And ultimately, the holding company became Atari S A. So the French company became Atari S A. So that was, you know, in in from two thousand to two thousand and nine.

• 4:53Anthony Pompliano?

  Okay.

• 4:54Speaker 01

  And I left in two thousand and seven because at the time we had so much debt, a hedge fund became the largest shareholder. They bought the debt and they made their way and we helped them because we knew we had to repay the debt. We were left in two thousand and seven and in late twenty twelve, early twenty thirteen, the the hedge fund called me back. They want the, it's public domain, you'll find the name of the hedge fund. But it's public domain. They called me back and they said, look, we want out. Please come back. We would like you to buy back the company from us.

• 5:24Anthony Pompliano?

  So, okay, let me recap for a second. You basically went from being a lawyer to an investment banker to an operator.

• 5:31Speaker 01

  Yeah.

• 5:31Anthony Pompliano?

  And almost exclusively have operated within the gaming industry. And you started out acquiring these different divisions or companies from larger players. Eventually, get a hold of the Atari brand. You create this new Atari kind of strategy. Go forward. You execute, sell to a hedge fund.

• 5:51Speaker 01

  Yeah.

• 5:52Anthony Pompliano?

  And then this is when the story gets really good.

• 5:53Speaker 01

  Yeah.

• 5:54Anthony Pompliano?

  Right? So you guys leave. The hedge fund takes over.

• 5:57Speaker 01

  It was not, it was not a one man show, we were three.

• 6:00Anthony Pompliano?

  Okay.

• 6:00Speaker 01

  Four or four, but it was a good team. And then when the hedge fund arrived, I said, look, yeah, here's the waters here, electricity is there, gas. If you need us, you know where to find us. So we all left in two thousand and seven.

• 6:12Anthony Pompliano?

  Okay, so, so basically the team leaves two thousand and seven, hedge fund's in charge, what happens?

• 6:16Speaker 01

  So they went through six or seven CEOs, but they ended up losing like four hundred million euros. And yeah, for me, it was just like, whoa. So when I left, I, I negotiated that only to take some cash, but I had the severance to be paid. So also took the, I bought the MacroPro's brand at the time, MacroPro's, which I ended up selling a few years later. But it's, everyone went on and so on. So some came back to France. I stayed here. So I kept investing in, I created a company called Interactive Game Group, I2G, like stupid name, but my plan was to create a big portfolio of intellectual rights for games. So I started, I'm, I'm quasi-responsible for fitness games

• 6:59Speaker 01

  because I created with Jillian Michaels, we created, and Giancarlo Chiesic, we created Jillian Michaels Fitness Ultimatum for the, the Wii, the balance board.

• 7:09Anthony Pompliano?

  Yep.

• 7:10Speaker 01

  We sold a few units, millions of units.

• 7:13Anthony Pompliano?

  It's pretty popular, right?

• 7:14Speaker 01

  Yeah, yeah, but Jillian was great. And it was a perfect timing. But, you know, so I always kept an eye on Atari. And it's true that they were going down and down because it's, you know, the game business is super difficult.

• 7:27Anthony Pompliano?

  So when you guys left, you were still creating games, you were still creating different things, right? Still kind of involved, but just not at Atari?

• 7:34Speaker 01

  So yeah, exactly. No, no, I was just, I kept a licensing gig or advisory gig with Atari. But no, I, I made fitness games, I invested in zombie games. I'm the one behind Nether, which is one, a game online that just got rebooted two weeks ago. Nether, if you can, if you want to check it out on, on Steam. So yeah, we, we just kept doing that. But, you know, my eye was always on Atari and. When the opportunity came back, when they called me, I said, yeah, of course. So it took me one day and a half to go through the data room because basically it was just like, I know the contract, I did sign it, look at the signature page. So it was very funny.

• 8:15Speaker 01

  Uh, but at the time, early twenty thirteen, they were making um one million euros of revenue.

• 8:21Anthony Pompliano?

  Okay.

• 8:22Speaker 01

  And more than thirty million euros of debt.

• 8:24Anthony Pompliano?

  So hold on a second. When you guys sell this in two thousand and seven and you guys leave, you come back basically and when you see the company, it's a million euros in revenue, thirty million euros in debt. Not exactly a appetizing situation.

• 8:39Speaker 01

  It's a startup. It's a big, plus they had a great idea, which was to file for bankruptcy in the US. And you're like, why did you file for bankruptcy? And they say, oh, we thought it was a nice way to get some money with deep financing. And I'm like, dude, really? So what happened, it took me basically, um, so what I did, I bought the French company. Uh, the French company, which was our old company, so I bought it back. I became the largest shareholder, but the business, it was and is still in the US. So here I had to go. The French company was solvent, the parent company was solvent, so I bought it. But then I have to make my way out of the US bankruptcy.

• 9:19Speaker 01

  Here, you know, it is what it is. It cost us, what, uh, ten million dollars? But I ended up paying one point seven million dollars to the creditors and more than eight million dollars to the advisors. Uh, like the lawyers and the bankers. I'm a banker, so I appreciate that and I'm a lawyer as well. So.

• 9:34Anthony Pompliano?

  So, but the creditors got just under two million and basically the lawyers and the bankers got it.

• 9:41Speaker 01

  But it's, what was very important to me is that I was able to basically uh, work a plan with the creditors, with the bankers, the advisors. And we were able to keep uh, the brand because the brand could have. Been sold through auctions. Yep. So we had to sell a few games. So we sold, I think, six or seven games for like five million dollars. And with that, we were able just to, you know, put some, uh, some gas in the, in the tank and, uh, keep the ball rolling. But what was interesting is that I was able to basically keep, keep the brand, keep the games, uh, keep test drive, uh, keep, um, the, the Roller Coaster Tycoon license. Uh, the only Atari game really that we sold at the time was Barrel Zone, which, you know, it doesn't have the Atari, uh,

• 10:26Speaker 01

  name, word in the name, so it was okay. Uh, but in any case, we had to, to leave bankruptcy. So we, it took us from twenty, early twenty thirteen, January, February twenty thirteen to basically, it took us eighteen months to leave bankruptcy. Hmm. And, um, after that, I still had thirty million euros of debt to redeem because the debt, the thirty million euros was on top of the bankruptcy. It's, uh, it was the parent company level. So then I, I had to tackle that and I ended up repaying all the debt in twenty sixteen roughly. And in the meantime, we made everything we could just to rebump and, uh, to, to, to revi- revitalize the business. Yep.

• 11:08Speaker 01

  Uh, so to do that, you know, it's, uh, we, we had to make a very simple, some very simple choices. What we did was, uh, was we selected two IPs and one was, uh, and is Roller Coaster Tycoon because I knew the, the franchise quite well. Uh, so we, we started with that and we also restored with Atari Vault, which is basically the older toy games, all packaged in one single bundle. Um, but we've not tried to, for the moment, but now it's coming, we've not tried to relaunch a new Warlord, the new Tempest, a new Vessel Command, a new whatever, Adventure. Uh, that, that's coming now.

• 11:47Speaker 01

  So with these two franchise plus a very solid licensing program, we were able and we were able just to reboot the business. But I did it in a very, very different way, different manner. You know, in, let's say if you look at the year 2005, we had 2,500 employees of which 1,000 developers.

• 12:09Anthony Pompliano?

  So In 2005, you had 1,000 developers and 2,500 employees.

• 12:13Speaker 01

  Yes.

• 12:14Anthony Pompliano?

  Wow.

• 12:14Speaker 01

  Roughly, we went as high as 300, 3,000 something. Uh, yeah, we had 10 studios, Dallas, Los Angeles.

• 12:22Anthony Pompliano?

  A lot, yeah. Huge company.

• 12:24Speaker 01

  Melbourne, everything, we were doing 700, 750 million euros of revenue. So, uh, but to reboot the company, I mean, I could have tried to raise the money and do the same. But my goal is again, not just to build on the portfolio, to have a very, very valuable of a portfolio of games. And it's easier for us to do that and team up with third party studios.

• 12:50Anthony Pompliano?

  Yep.

• 12:51Speaker 01

  Uh, so you have, um, I mean, it may cost, it might cost you more than if you had them internally. But at least, you know, if you take a studio that does

• 13:00Anthony Pompliano?

  Lower risk.

• 13:01Speaker 01

  Racing games, yes, it's lower the risk, you don't pay the downtime. But the most important thing is that I can tell you, you know, I've lost a lot of money with games. I've made a lot of money, but if you have a studio that does racing games, I can tell you they can only do and they will only do racing game. It's just part of their DNA, you just have to acknowledge that. So there's, you know, so much racing games you can do. So right now, I think what, what we're doing is that we're back. Very, very different organization, very, very different structure. We are less than 20 employees, we do more than $20 million of royalties. So now we have partners who push the boxes at retail. We have a new console coming again, we partner with people.

• 13:42Speaker 01

  Uh, we have casino games, so it's very, very different organization and we are very happy with that.

• 13:48Anthony Pompliano?

  So, so I really want to touch on how big this market is, right? I think a lot of people hear Atari's name, they think, um, kind of the, uh, the legacy games that we all know and, and many of us grew up loved, but describe how big gaming, uh, is both domestically in the U.S. But also internationally.

• 14:08Speaker 01

  So. I think, well, you have numbers all over the place, but I think the most important thing to understand is that you have different markets, right? First, you have consoles, so that's one thing, this is the Microsoft, the Sony, the Nintendo of the world.

• 14:24Anthony Pompliano?

  This is Xbox, Playstation, Dreamcast, whatever it takes.

• 14:29Speaker 01

  Nintendo Switch, so that's console. Then you have PC, this is, so console is big in the, in the US, in Europe, there's no console in China, uh, not for the moment. But this is big in the, in the US and in Europe. Then you have PC, PC is all over the place.

• 14:46Anthony Pompliano?

  And this is Minecraft.

• 14:47Speaker 01

  The Minecraft Steam as a distribution, uh, you have PUBG, you have, um.

• 14:55Anthony Pompliano?

  Whatever game.

• 14:56Speaker 01

  Whatever games, you know, Fortnite, of course. And then you have mobile, on mobile you have Apple and you have Android. So that's basically the video game business.

• 15:06Anthony Pompliano?

  Okay.

• 15:06Speaker 01

  So I'm not gonna, I mean, you, it's billions of dollars depending on if you put China or not China, if you, I mean, we're talking.

• 15:12Anthony Pompliano?

  It's big.

• 15:13Speaker 01

  It's big, we're talking one hundred billion easily. But on top of it, what people have to understand is that you have also gambling. So gambling is, not, I'm not talking casino, I'm talking gambling, real money games on the phone, right? So you, you have, of course, you can think, okay, slot machines, you can think number games, lottery games, but more and more you have esports. Esports is that, what is it, is it, uh, is it a game, is it gambling, is it casino, it's not regulated, but you can make money. Uh, so you, you have all these new businesses and I can tell you, you know, what we're looking at here is also very big. We do, as a charity, we do casino games on phones in Europe and in Africa.

• 15:56Anthony Pompliano?

  So you guys, let me back up for one second. There is the three bucks you described, but then there's also this esports, casino games, all this stuff that in the United States is actually not legal or is heavily regulated, right?

• 16:10Speaker 01

  No, esports now it's, it's open.

• 16:12Anthony Pompliano?

  Well, esports is different than the casino games, right? The casino games in many states are still regulated, etc.

• 16:17Speaker 01

  As long as you have.

• 16:18Anthony Pompliano?

  Outside the US is different.

• 16:19Speaker 01

  Yeah, so, okay, so, I think.

• 16:23Speaker 01

  Video games, we all know what it is. Real many games, it's, you have three types of games. You have games where you have only luck, this is casino.

• 16:32Anthony Pompliano?

  Yep.

• 16:33Speaker 01

  You have games where it's only skill, this is sports. And then in between, you have a combo of, we call that hybrid.

• 16:39Anthony Pompliano?

  Okay.

• 16:39Speaker 01

  Games, it's a combo of luck and skill.

• 16:42Anthony Pompliano?

  Mm-hmm.

• 16:43Speaker 01

  If you have luck, basically, you have to go and get the license. It's cleaner, easier in the US. Outside of the US, it really depends on the country.

• 16:51Anthony Pompliano?

  Okay.

• 16:51Speaker 01

  The country where it's monopoly.

• 16:52Anthony Pompliano?

  So luck is the one that's heavily regulated?

• 16:54Speaker 01

  It's, luck is regulated and frankly, for everyone listening, if you have a game that involves luck. Um, but basically, think about it, if a monkey can play the game and win, then you have luck. So I think it's, uh, that's the way to, that's always the test I, I, I put myself for. Just a kid like two years old, one year old, just pressing the button, you win money.

• 17:15Anthony Pompliano?

  Luck.

• 17:16Speaker 01

  It's, it's a better get a license.

• 17:18Anthony Pompliano?

  Uh. You're offending these smart kids that are out there winning the spelling bee at like age three now.

• 17:23Speaker 01

  Yeah, yeah, but they don't make a lot of money. So it's unfortunate for them, and I think it should be a sport. Um, but, so you have gambling, but the point is this, the, for anyone listening, I mean, the point is, if you think about this industry, I can just tell you, it's going to keep growing.

• 17:42Anthony Pompliano?

  Mm-hmm.

• 17:42Speaker 01

  Very simple. Why? Why is he saying this? Stupid. No. Between forty and sixty years old, people don't play.

• 17:50Anthony Pompliano?

  Yep.

• 17:50Speaker 01

  You know, so you have, it's like, as if we were doing TV, producing TV shows where no one between forty and sixty would watch TV. Why am I putting a line at sixty-ish? Because we've realized that grandparents would play more than parents to bond with the grandchildren. That's a very interesting one. And also because you had that Nintendo game, uh, Brain Age, uh, that was basically, she was deemed to, to fight Alzheimer. I don't think it's, it's true, but it was just like.

• 18:19Anthony Pompliano?

  Trying, yeah.

• 18:21Speaker 01

  That's the first thing. Uh, you have a, yeah, big age group that are not playing. Second, women. Are not playing as much as Mail. So here you have a second bucket of growth. Third, if you think about India, South America, Africa, all these, you know, even China, all these big territories, there's no one, I mean, the the level of players is not the same as in the US. So you still have a pocket here. And then the fourth reason is that more and more you have new platforms, right? Now you can play on the phone, tomorrow you'll be able to play wherever on Facebook. So for all these reasons, this industry still has like twenty to thirty years of growth easily. Easily.

• 19:06Speaker 01

  After that, you're always as good as your last game, but that's the plan.

• 19:10Anthony Pompliano?

  And most of these games, they're fun, they're entertainment, right? So like people are never going to want to not have fun or not be entertained.

• 19:18Speaker 01

  Yeah, I think so. I think it's, of course, you spend more time, you know, you allocate time. So that's the only, that's the only issue for us. It's the competition is really, you know, everyone who is competing for your, your time for entertainment, is it Facebook, Google, whoever, for us, it's a competitor. It's not only the, it is not only the game publishers. Facebook is a competitor because the minute you spend on Facebook, you don't spend it playing video games.

• 19:47Anthony Pompliano?

  Got it. And so we hear a ton about crypto and blockchain entering into the gaming space, right? Everything from these non-fungible tokens to instantaneous settlement for casino games, just all kinds of stuff. From your seat, you know, you've been at this a really long time. Give us an understanding of like how crypto actually fits in. Where do you think it makes sense and where you think maybe it doesn't make sense?

• 20:11Speaker 01

  Well, I think for me first,

• 20:14Speaker 01

  I mean, I don't want to say that the video game company industry created the crypto, but we're very used to having virtual currency. That's part of, you know, this is why we're still alive. Because we know in every game, any game, we know to create a currency. So I think we're very familiar with that. Now, the other way around, from crypto into gaming, I think there are basically three ways. One is More and more, you'll be able with the non-fungible tokens, you'll be able to to play video games and you will have more and more games based on crypto and digital assets. I mean, CryptoKiller is a very good example. If you look at a company that we've partnered,

• 20:56Speaker 01

  we have partnered with Animoca, they have a license from Formula One to do a crypto game or a game based on crypto, non-fungible tokens for Formula One. I don't know what the game is about, they announced it, but so yes, there will be crypto and blockchain in the game space. The second thing is more and more you'll see, when we do game, I'm talking gambling now, gaming being for video games, gambling for casino games. For us, crypto is just another line in the database of currencies. As long as your platform supports 10, 20, 50 different currencies, adding a crypto is not a problem, as long as you have somebody who can do the transaction on the other side. But so more and more you will have is, I think, casino

• 21:41Speaker 01

  games using crypto, definitely. And the third, I would say the third element of the first, third point of convergence is that, and this is what we're trying to do, we're trying to create a platform where new users will be able to log on and work inside the industry.

• 21:57Anthony Pompliano?

  All right. So there's two separate bodies of work here. One is what I'll call crypto fitting into the legacy system, right, of gaming, which is everything from blockchain-based games to just using Bitcoin or other cryptocurrencies as the medium of exchange within a game, right? So that's kind of, the old model stays true, and now you're just adding blockchain or cryptocurrency into it to replace a single piece.

• 22:20Speaker 01

  Right.

• 22:21Anthony Pompliano?

  The second bucket of work that you're talking about is building basically a work marketplace, right?

• 22:27Speaker 01

  Yes.

• 22:27Anthony Pompliano?

  To use cryptocurrency as an incentive tool to get people to work from anywhere in the world on different tasks.

• 22:34Speaker 01

  Exactly.

• 22:34Anthony Pompliano?

  Okay, explain this more.

• 22:35Speaker 01

  So what we've done, we, there's a company called Infinity Networks Limited that we've created with A few developers and I'm very proud to just to remind everyone here about Anthony DiOrio is also one of the founders and is also one of the partners is Anthony is one of the co-founders of Ethereum. So what we're trying to do here through this company in INL is create an Atari platform where anyone will be able to log on and work in the industry. Let me just first give you the few reasons why we're doing it. Today, you have approximately between two and three billion people that are connected.

• 23:19Speaker 01

  Tomorrow, you know, with all the satellite systems that are being launched, you're going to have, is it five, six billion people, but you're going to have many more. A lot. A lot of people connected. And these people will want to earn a living. So we see that as an opportunity. We see that as an opportunity. Of course, we are not going to program a game from A to Z. Definitely not the case, but we believe that this new tranche of individuals will will be able to provide services in the video game industry such as testing, translating, doing some little animations. And as time goes by, I think they will earn, you know, they'll go on YouTube, they'll just train themselves and they will be able to do more and more sophisticated tasks.

• 24:03Speaker 01

  And we see that as an opportunity. So what we're trying to do is creating a platform where they can log on and be offered through the blockchain, smart contracts to perform initially simple tasks, but then more and more complex tasks that will be helpful in the, I don't want to say game, I just want to say in the multimedia space. Again, it could be checking a translation, checking a dubbing of a voice in a local language, could be testing the game, could be.

• 24:36Speaker 01

  Many, many of these tasks, which will increase in complexity. But why do you need the blockchain here? You don't really need, you need the crypto, but first you need the blockchain to have a smart contract. Because you don't know where these guys are. I'm not saying that you don't care, because you do care about the, about the quality of the work. But you don't know who they are. I mean, they have no address. They have, they have a cellphone, but I can tell you, that's for sure. But they have no address, they have no ID, they'll never have any credit card, any debit card, forget the IMAX.

• 25:07Anthony Pompliano?

  What you're basically talking about is there's almost like to the Western world, there's a shadow workforce. Right, there's a bunch of humans.

• 25:16Speaker 01

  There's shadow necessarily.

• 25:17Anthony Pompliano?

  Well, just what I mean by shadow is the means by which we would recognize work, right? Workers in the Western world is they would ask you for identification. They would ask you for your home address. They would ask you for your bank account details, your social security or other identifying numbers. In many countries around the world, there's tens of millions, if not hundreds of millions of people who don't have that information.

• 25:39Speaker 01

  They have no address.

• 25:40Anthony Pompliano?

  Yeah, they have no way to provide those details. And so what I think I hear you saying is that blockchain and cryptocurrency can basically provide a lot of the same infrastructure to these people without them having to kind of catch up. They almost leap ahead and now they can receive payments. They can actually participate in a global economy without having to get an address, for example.

• 26:05Speaker 01

  But they will, for instance, if you have a very simple task to perform, a task that can be embedded into a smart contract. It's impossible to find first, assume you found the guy, he's not going to sign you a 10-page document just to earn $150. So it's impossible, forget about it. And second, he doesn't have a bank account.

• 26:27Anthony Pompliano?

  Yep, you can't even pay him.

• 26:29Speaker 01

  You can't pay him, it's just like. Look, I've been trying to send money to the G O C, the Democratic Republic of Congo, Kinshasa, the old, the former Belgian colony. It's just incredibly, it's impossible to send one hundred dollars, because we had a test survey, and I wanted just to use that as a test case and say, okay, let it, let us, guys, let us send him one hundred dollars for, he had worked like twenty minutes, I wanted just to give him one hundred dollars for his services. Took me five days. So, I think this is why the blockchain is very, very important for these people, because you don't need to, as long as you know that the work has been done, and of course, you

• 27:10Speaker 01

  have an ID, you know, but you, you know that that guy, he has that name, okay, great, you may want to meet him one day if you go there, but the most important thing you, you want is to have the workforce, pay him, and make sure that, you know, the work is done. And on his end, what he wants is make sure he's going to be, to get paid. And it's impossible for him to send a ten, ten-page document, it doesn't mean anything. So that's why I think blockchain is important, and then will be, should be very helpful. After that, you know, once they get the crypto, they'll find a way to get liquidity, it's not going to be difficult even today. Look Africa, look at Africa, I can tell you, I work a lot in Kenya, for instance, two-thirds,

• 27:51Speaker 01

  I mean, they use, they, they basically leapfrog the, like, leapfrog the, the bank development state, there's no, the banks are gone, the, the money is with the telco, and two-thirds of the transactions, financial transactions in Kenya are done with mobile money.

• 28:10Anthony Pompliano?

  I think about this all the time.

• 28:11Speaker 01

  It's crypto, it's, it's like on the phone, you send a text message, you have to go there to really understand what it is. And it's very cheap, it's one percent, even, yeah, one percent, one and a half, and everyone is like, great, no problem. But this it's working.

• 28:26Anthony Pompliano?

  The, in, almost the entire continent of Africa, not, not every country, but many countries, were drastically behind, fi- in on a financial infrastructure basis, the Western world. And with the advent and proliferation of mobile banking, they leapfrog, right? Like, they are way ahead now. And they actually can use financial infrastructure that we struggle with in the Western world, because it's so mobile, because it is so connected, it is top-down from the telcos. It feels like blockchain is going to help many of these areas who see the value and embrace it immediately, continue to leap ahead, whereas the Western world, we're okay with the infrastructure we have, right?

• 29:11Anthony Pompliano?

  It works for us on most use cases, and so we're less likely to be the first adopters.

• 29:15Speaker 01

  But I think it works for us, for a very simple, I mean, for a series of very simple reasons. I have an ID, I have a bank account, I have a Visa, MasterCard, and/or an Amex. I'm good. So, why would I just go through blockchain crypto? Because I have everything and it's working. It has a cost, yeah, but also I have security, I have an insurance, right? If, if I get fraud on my, fraud on my business card, um, yeah, I'm gonna get protection. So why would I make the move? But I think at the end of the day, we would all make the move, because you would have a mass of people that will just make the move before us. And if we want to be in a position to catch up with these guys, we would just have to make the move.

• 29:58Speaker 01

  And I think, I don't know what's gonna happen to the, to the, you know, the Western banks, but it's true that right now, the world, you see a lot of transactions going to telcos in Africa. It's, it's just insane. Kenya, Tanzania, Nigeria, all these countries, uh, this is just the way it works. So, we'll see, in fact, you know, for the moment, it's working for us, but because we have the KYC and AML, but try to do KYC just in, in Ethiopia, be my guest. There's no drama.

• 30:28Anthony Pompliano?

  Good luck.

• 30:28Speaker 01

  Yeah, be my guest. So, I think this is where, back to a trial, this is what we see as an opportunity. And you, I can just also give you a very, another very, very simple example. Um, you know, take Fortnite, take, um, Pokemon Go, take any game, you know, today you can play, you can build your avatar up to a certain level, and then you can sell it. So... For these new people coming, you know, joining online, uh, Verciva also has a way to make money. Because for us, okay, one hundred and fifty bucks in New York City, you're not gonna make a living out of that. But I can tell you, if you if you live in a village in um in Kenya or in Uganda, if you can make one fifty a week,

• 31:11Speaker 01

  building an avatar, just because the issue will be the access to the hardware. But I think the hardware will come for free, will come through the the existence of basically farms where you go, you you rent one hour, two hour of hardware, but even the phones are so powerful today, but you'll be able to build your avatar up to a certain level and make one hundred, one twenty-five, one fifty a week. And this is a lot of money.

• 31:33Anthony Pompliano?

  Yeah, well, well, the whole thing here is uh that access to the internet, the connectivity to the rest of the world. You can learn, right? So you can pick up the skills that it takes to edit, to create, to do all this stuff.

• 31:45Speaker 01

  Everything is on YouTube.

• 31:46Anthony Pompliano?

  Absolutely. And then you could turn around and you can then use that to participate in the digital economy. Uh, the hard part is how do you get paid?

• 31:54Speaker 01

  Yeah.

• 31:54Anthony Pompliano?

  Right? And if there's a way to get paid uh with some sort of global currency.

• 31:58Speaker 01

  No, no, not even global. I think you can take any crypto associated to your blockchain project. If the if your project is good, you're gonna have a lot of users and then you're gonna have a lot of liquidity on the crypto and the crypto will be exchangeable. They'll find a way. Is it like from crypto to blockchain and then blockchain to cash? Is it, look, well, they will find a way. Uh, and I think this is, it doesn't have to be listed on the exchange. As long as you provide liquidity in one, two, three steps, you're good.

• 32:27Anthony Pompliano?

  Absolutely. What um what are you most excited about with Atari right now? Like, when you look for it, you've got the the work marketplace that you're building, but on the gaming side, what what's kind of next for you?

• 32:38Speaker 01

  So we have uh four business lines. We have games, that's our DNA. We have the new console that we just uh announced, um that will be out twenty nineteen, twenty twenty. So that's the second business line. And then we have. Gambling casino, so that's very minor for the, I mean for the US, doesn't really matter, but for me it's important. And then we have blockchain, we're using the brand as a tech brand. I'm really excited. So games, we have a guy who's taking care of that, that's great. We're working on, you know, new game features, new gameplays. We're working on the Asteroid 99, which is basically the Asteroids, but with a last man standing mode online.

• 33:21Speaker 01

  So games, we're working on that. The VCS is very important. What I'm really interested in doing is to basically see I can use the brand to create and to invest in new tech technologies. So is it blockchain? Is it, I'm looking for instance into a phone right now, or having more and more examples of using the Atari brand to attract people to a new experience that makes sense. But it's true that with the Atari brand, it's very funny because it's always the same thing. And I've been through immigration here so many times until I got the global entry system. But it would be like, you know, going through the officer and say, okay, I'm here, there's a passport. Okay, what do you do? Video games?

• 34:03Speaker 01

  Which company? Atari. And then all of a sudden it was, oh, wow, Atari, that's great. And then the guy would go for 10, 15 seconds about the, you know,

• 34:12Anthony Pompliano?

  How great it was.

• 34:13Speaker 01

  But then it was always, oh, but what are you doing today? Is Atari still alive? You know, past the first reaction. So I think I'm very interested in trying to use the brand to create new experiences and new applications. Hardware is great, the new console, but long term, it's really building an online community.

• 34:32Anthony Pompliano?

  Got it. What do you think the biggest challenge is for you guys as you enter into the blockchain? So there's tons of opportunity. You're really excited about it. I think a lot of people see the gaming applications. What do you see as the biggest challenge?

• 34:44Speaker 01

  I think the challenge for us would be, so we have a name recognition. I think the challenge is just like everyone, it's a race. So first you need the resources. And I think it's really gaining mass adoption. So that's why we prefer to go or to use the end goal of the work. Basically,

• 35:04Speaker 01

  I don't want to to oversimplify, but sometimes, you know, that's why I decide to do it. Back in the day, you would have to pay to play, right? Uh, now it's more like free to play, so you don't have to pay, but I think down the road, you will be paid to play. Uh, so I think that it's a reversal of the proposal, right? Before I had to pay and I'm being paid, and I can tell you this is true today because if you play any game, you'll see a video, you're getting a boost, we're getting the money. But you are receiving a boost, a power up, because you've watched a video. So yes, you're paid in a way and you I we're working on concepts like watch the video, the chips are free and then you can earn real money.

• 35:45Anthony Pompliano?

  Mm hmm. So basically, you're getting paid whether it's direct monetary value or some other value.

• 35:50Speaker 01

  Yeah.

• 35:50Anthony Pompliano?

  Uh, that there's an exchange.

• 35:52Speaker 01

  Yes.

• 35:53Anthony Pompliano?

  You do an action, you receive some incentive for that action.

• 35:56Speaker 01

  I see. So I see that. That's why, because it's still a very, it is a very, very competitive business, but as because it is growing. And but also, as it is growing, we see a lot of opportunities. I think for us, the biggest challenge is just making sure that, you know, you don't have a lot of tries, so to say. Uh, you can have one, two, three projects, but after that, it's, uh, if you fail three times, it's difficult. Um, so I think for us, it's really the the definition of the project, what do you really want to do? And I think going through the money angle being, okay, you can work, uh, you can have a future. This is where, you know, the Atari brand is, uh, is very powerful because we

• 36:37Speaker 01

  it's very difficult to compete against the big, big boys, but look at where we're coming from. So I think that's the the big challenge for us and that's also the opportunity. But the big challenge is making sure that we define exactly what we want to do. And so far, I'm very happy to have selected that angle, which is, uh, make sure that people earn a living, earn money, uh, because at the end of the day, we will need that, right? So.

• 37:00Anthony Pompliano?

  To, uh, to help people have fun, be entertained and make a living is, uh, is quite a mission there, my friend. Um, all right, before I wrap up, I always do rapid fire. What, uh, what do you think the most important company in crypto is, other than Atari?

• 37:14Speaker 01

  Binance?

• 37:16Anthony Pompliano?

  Binance? Why?

• 37:16Speaker 01

  Ah, because we provide liquidity.

• 37:18Anthony Pompliano?

  All liquidity.

• 37:19Speaker 01

  Yeah, I think it's all liquidity. It's the most important thing to do.

• 37:23Anthony Pompliano?

  What do you think is the one regulation that you would change or improve if you could?

• 37:28Speaker 01

  I think, you know, the regulations is people's. I remember all these, um, all these conversations last year about utility tokens. Frankly, it's just like, it's a currency, right? So for me, doesn't matter. Make sure that you select your own, uh, your, your, you know, the reference what you want to use. If you're in the US, do it by the books. If, because at the end of the day, it's a money, right? People will make a living. So I don't really care about the regulations. The, the only advice I have and for me and which, which we apply is that, is it clear? Is it safe for people because it's a currency? It's, uh, it doesn't matter. The regulations will always change, so.

• 38:07Anthony Pompliano?

  Don't build the business for the regulations.

• 38:08Speaker 01

  No, it's for me, it's, it's just, it's one of the parameters. Deal with it, it will change for sure. The more successful we are together, the more regulations there will be, but it is what it is.

• 38:19Anthony Pompliano?

  Yeah, that makes sense. Uh, what would you say is your most controversial thought in blockchain and cryptocurrency?

• 38:25Speaker 01

  Uh, yeah, I think it's, uh, before we, we used to pay to play. And today it's free to play and tomorrow, I think we will be paid to play.

• 38:34Anthony Pompliano?

  So there's a transition between you used to have to pay as the, as the user or the player. Now it's free and eventually you'll profit from playing these games.

• 38:43Speaker 01

  Yeah, that's.

• 38:44Anthony Pompliano?

  Like the, the value problem was in, goes completely inverse to what it used to be.

• 38:47Speaker 01

  Because on top of it, you know, uh, if you think in masses, what we are really providing is information about us. And, uh, you know, if it's, uh, I have a friend who was, was says, look, if it's free, it means that you are the product. And I think it's true. And you are the product being, if it's free, you are paid because you're providing information about you. And this is why you're the product. So, yeah, you should get paid for that.

• 39:12Anthony Pompliano?

  Yeah. How do you think Bitcoin fits into all this?

• 39:15Speaker 01

  Look, I think it's, uh, is it gold or like gold?

• 39:20Speaker 01

  Maybe you see, I think what what is really important here is that we are seeing Bitcoin through the eyes of people who have IDs and social and all of that. If you put yourself in the in the shoes of somebody who is in a country where there is no currency, Venezuela, Zimbabwe, things like this, it's better to have a Bitcoin, a fraction of a Bitcoin than just the local MAC note. So in that sense, I think it fits well for for all these countries. But I think we we are not, because we live in the Western world, we don't grasp the real utility of blockchain, because it's only when you're in a situation where you

• 40:01Speaker 01

  have no ID, no address, no bank account, that you see, wow, am I going to get out of here? And I think Bitcoin here can help, but more more generally blockchain and crypto can help a lot.

• 40:13Anthony Pompliano?

  For sure. What what's the most important book you've ever read?

• 40:16Speaker 01

  Oh, the way for me, it's The Clash of Civilizations by Huntington, because it shows, it's not crypto.

• 40:24Anthony Pompliano?

  What is that about?

• 40:26Speaker 01

  It's about, you know, how you have basically seven civilizations today in the world, the Western, the Chinese, the Russian, and how each, some civilizations were great before, how the Western civilization was great and is still great, but the moving forces between the civilizations, that's that's a great book.

• 40:50Anthony Pompliano?

  The Clash of the Clash of Civilizations. All right, I'll have to read that.

• 40:55Speaker 01

  Yeah, nineteen ninety, it's twenty years old, but it's still very.

• 40:58Anthony Pompliano?

  Think it's still worth reading?

• 41:00Speaker 01

  It's still worth reading, as long as you can update it, and yeah, I think it's it's still very, you know, I'm from Europe and I see more clashes of civilizations there than than in the US. In US, it's, I like it here, because everyone is here for a reason, and you know, you know why you're here, and you know why, what the US is is giving you, and that's great.

• 41:22Anthony Pompliano?

  So since you brought up civilizations, I got to ask, what's your take on all this, the yellow vest protesters? What's going on in France?

• 41:30Speaker 01

  Yeah, yeah, it this came as basically a short reaction initially, but they basically grew out of proportions. The guy started with very, very simple request, but then the thing got out of proportion. And basically also these guys found themselves a reason, right? Now it was just like, okay, what do I do instead of staying home alone? I'm going to see my buddies on the roundabouts. At the end of the day, like now it's it's out basically. As the government provided all the answers, yeah, I think the government has provided a lot of answers. So and a lot of measures. So we'll see, you know, there will be like this waves.

• 42:13Speaker 01

  They express themselves in a certain way, but it is just have to take that into account. But at the end of the day, you know, democracy is that people have elected some people and you just have to deal with it. It's a, I mean, the the third round of the elections cannot be in the streets, no way.

• 42:28Anthony Pompliano?

  The the Frenchmen are wild, man. I saw some videos. They were they were going crazy.

• 42:34Speaker 01

  Always have, I mean, if you put twenty thousand people in the street, you will always find one or two. At the end of the day, it's it it's been a long movement.

• 42:42Anthony Pompliano?

  It's been going on for months now, right?

• 42:45Speaker 01

  Yeah, months. But I think it's for me, the way I see it is that there's no way you can have like the third round of elections being in the street. And it's going to take time because they have clearly left a huge impact on the on the French system and in in even on the day to day, you know, life of people. So it's not over, we'll see, but you know, these are long term questions, so I think the long the answers will be provided also on a very long term basis.

• 43:15Anthony Pompliano?

  Got it. What um what do you think about aliens? Real? Not real?

• 43:20Speaker 01

  Well.

• 43:21Anthony Pompliano?

  Do you believe in them?

• 43:22Speaker 01

  So.

• 43:23Anthony Pompliano?

  Have you met one?

• 43:24Speaker 01

  No, look, I think it's a it's a scientific question, so I think there's no proof right now. So show me an alien, no, is there an alien somewhere, somehow? Can someone someone tell me, okay, they live here? No. Having said that, I think no one really understands the the. The the depth and the the extent of the the universe. When people say, okay, one hundred billion light years, you're like, no one gets it, right?

• 43:51Anthony Pompliano?

  Yep.

• 43:52Speaker 01

  Uh, so I think no one gets the the real number of planets out there. Uh, every day, every week, every hour, you have new planets coming, oh, we didn't know that, and so every day. So I think as long as uh you you you have not explored the whole universe, there's a there will always be a probability. But aliens are out there. Now, I think the the second question, the first one is, of course, do they live out there? Yeah, show me, explore any planet, and as long as you have not done that, there will always be a probability, uh, which is higher than zero. Now, the question is, is this a risk? Is this a chance? Is this a probability of meeting these guys? Um, uh, look, it really depends on your perspective.

• 44:36Speaker 01

  If you're a native Indian, uh, in fourteen ninety-two, I'm not sure you want to meet Kristoff Kolumb, because uh, when you look at the death, the death rate after that, it's uh, it's pretty significant. It was just like, you know, a a lot of death, dead people.

• 44:51Anthony Pompliano?

  That's an interesting way of looking at it.

• 44:52Speaker 01

  Yeah, you're not sure you want to meet them.

• 44:54Anthony Pompliano?

  We might not want to be discovered by aliens or vice versa.

• 44:57Speaker 01

  Look, look at these guys in the Amazonia, you know, uh, you you discover, you were still discovering villages, right? So, um, I think for these guys, I'm not sure it's good for them to be discovered by us because of, you know, the the new.

• 45:13Anthony Pompliano?

  The diseases.

• 45:14Speaker 01

  The diseases, yes. So, as a as a human here, do you want to know that they are out there? Yes, but clearly, you know, one of the greatest questions. Uh, there's no proof today, but I'm not sure that you want to meet them, uh, initially, because it's something in disease and the, but I think it's it's definitely one of the the greatest questions that we have to answer. I don't remember the guy who said, um, whatever the whatever the answer, you know, the the answer is quite terrifying, because if it's yes, you're like, whoa, where are they? And if it's no, it means that we are alone in the universe.

• 45:50Anthony Pompliano?

  It's pretty sad.

• 45:51Speaker 01

  Which is in itself, you know, quite unique, and you're like, wow, why us? And uh, so in any case, I think the the, I'm I'm I'm just losing the name of the guy, um, the guy, the the

• 46:04Speaker 01

  the servant who who said that, but I think in any case, the. Whatever the answer, the answer is pretty, you know. Yeah, pretty sad and you're like, whoa, you have to think about it twice.

• 46:18Anthony Pompliano?

  Big magnitude to that question.

• 46:20Speaker 01

  Yeah.

• 46:20Anthony Pompliano?

  That's my, uh, there's this guy, Dave Portnoy, who says, uh, big brain? That's my big brain question. Is, uh, are the aliens real? What, uh, what one question you have for me to, uh, to, to finish this up?

• 46:31Speaker 01

  Say it, why Atari?

• 46:33Anthony Pompliano?

  Why Atari?

• 46:35Anthony Pompliano?

  Look, I, I, I think two things. So one is, uh, there are too many people who are trying to build what I'll call, uh, utility or productivity, uh, products today, right? So a lot of entrepreneurs are very stuck on the idea of you have to solve a real problem. And they've lost sight that, uh, fun and entertainment is a problem, right? People want to be entertained, people want to, uh, have fun. And so I think that, uh, the Atari brand, uh, just stands for that, right? It's just people, you know, it's like the story you tell where somebody hears the word Atari and they ha- immediately go back to childhood memories. And it's just these like positive moments in life that I think, uh, are very underestimated and forgotten by today's entrepreneurs.

• 47:20Anthony Pompliano?

  Uh, and then the second thing is, um, you, the company, the story, the current user base, like, there's a very much more global nature to what you guys are doing, um, that, uh, a lot of Western world developers and game, you know, builders and designers, they just don't understand, right? And so it's how many other game developers can say, look, I've built games that are played on, you know, six of the seven continents, right? Or, or can say things like, we actually have partners on the ground in countries in Africa or, you know, places around the world. Um, I, I think it's just very different approach that you're taking. Now, as you said, there's a lot of challenges, right?

• 48:00Anthony Pompliano?

  And so, uh, being able to build the games is one thing, being able to elicit, uh, or incentivize a workforce is another. Um, but, but I think that, uh, if, if anyone's gonna do it, it's gonna be you guys and seems like so far, so good.

• 48:14Speaker 01

  Yeah, thank you.

• 48:15Anthony Pompliano?

  So don't, don't screw this up.

• 48:17Speaker 01

  No, no, if we will, we'll, we'll always say, because, you know, we're listed. So, but no, it's, it's a huge challenge. At the same time, you know, we're very happy to do it, at the same time, we're like, whoa, let's make sure we don't mess this, mess this up because, you know, it's, I did not create the brand, the brand was created by Nolan Bushnell. It was very successful, he's still around, I say hi to Nolan. So we just, there's a lot of history, so we try to do the right thing, but sometimes we're like, whoa, if we fail on that one, if we screw up. But the good thing is, you know, it's like everyone knows the brand, so that's a good thing. The drawback is, just like in France, we say, you know, we have the French national

• 48:59Speaker 01

  team that's world champion, so you have, everyone, you have 60 million people, maybe not 60, 40, who want to be the French coach, and so you go to anybody, they will just see, ah, if I wear this guy, if I wear this guy. Yeah, you have 40 million guys who want to have the job, but there's only one job, right? So, I'm saying this because sometimes I go online, I see very positive comments, I see very negative comments, I see basically people who love the brand, and other people who love the brand, but we don't love what you're doing. Yeah, it takes time, just be sure that we really love the comments as much as we can.

• 49:33Anthony Pompliano?

  Listen, the haters are just future fans that haven't figured out that they like you yet.

• 49:38Speaker 01

  Coming soon.

• 49:40Anthony Pompliano?

  Exactly. All right, listen, thank you so much for doing this, I really had a lot of fun, we'll have to do it again in the future as you kind of continue to progress.

• 49:49Speaker 01

  Thank you, thanks, thanks everyone, and thanks for listening.

• 49:52Anthony Pompliano?

  All right, guys, thanks so much for listening to that podcast. Before I let you go, one more word from our sponsor, BlockFi. Their new interest account allows you to securely deposit your Bitcoin or Ether at BlockFi and receive 6% annual interest paid monthly in cryptocurrency. This rate actually compounds, so you receive a 6.2% APY, which is very attractive given the alternatives. So you can actually take your Bitcoin, you can deposit it with BlockFi, and get paid an interest rate of 6% in return. Go check out blockfi.com/pomp, again, blockfi.com/pomp, to sign up and start earning interest on your crypto today. Hey, everyone, Pomp here. If you liked this episode of Off the Chain and want to help us take crypto to the top

• 50:37Anthony Pompliano?

  of the Apple, Spotify, and other podcast charts, please do us a favor and rate, review, and subscribe. To review, simply go to the Off the Chain homepage, scroll down until you see the five blank stars. Taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts. I appreciate you listening, and see you next time on Off the Chain.