In this interview, Jon Margolis, Head of Business and Corporate Development at The Sandbox, discusses his journey into the web3 space and how he became interested in the concept of the Metaverse. With a background in the entertainment and gaming industries, he gradually shifted his focus to exploring the potential of blockchain and crypto in gaming. Jon sees the value proposition of utility in blockchain technology and believes that gaming is the ideal application for this. He talks about The Sandbox as a decentralized Metaverse, a virtual land-based world where users can buy and own virtual lands to create content and experiences. He emphasizes the importance of quality content and engagement to drive the growth of the Metaverse and highlights the relationship between NFTs (non-fungible tokens) and The Sandbox, where assets and items are represented as NFTs on the blockchain.
Jon's advice for those interested in the Metaverse is to invest early and not wait for competitors to establish themselves, drawing parallels to the early days of social media. He believes that the next 18 months will see a surge in interesting products and content in the web3 and Metaverse space as a result of the capital and attention received during the bull run hype cycle of 2021-2022.
In this interview, Jon provides insights into the potential of the Metaverse, its applications in gaming, and the significance of NFTs in this evolving landscape.
Jon Margolis' background in the entertainment and gaming industries led him to explore the potential of web3 and the Metaverse.
The Sandbox stands out as the world's largest decentralized Metaverse, boasting 166,000 virtual lands where users can own and create content.
In The Sandbox, assets and items are represented as NFTs on the blockchain, giving users true ownership of their digital assets. This unique feature sets The Sandbox apart from traditional gaming, where items are merely pieces of digital code within the game. NFTs play a pivotal role in empowering users to buy, sell, and move their assets seamlessly within and beyond The Sandbox ecosystem.
The Video
The Interview
Ben Plomion
I'm a big fan of The Sandbox and I cannot wait to dive in and learn more about you. I thought that may be a good place to start would be to ask about you specifically what has been your journey in web3. How did you enter that space?
Jon Margolis
My background is in the entertainment and gaming world. Once upon a time, I was an investor and working for hedge funds and taking on sort of tech and media investments.
I was always following the game space, but then, a number of years ago, I started working for video game companies and really loved it, built up a publishing studio and really got into that space. I was actually working at Riot Games a couple of years ago and was kind of watching the Web3 world and the Metaverse world and all these different things that were happening and I was investing here and there and testing the waters and basically said, "This is too big for me to just sort of play around and I need to figure out what it is, what I think is going on, and where do I think the opportunities are for the long-term."
I looked at it, and instantly discovered the concept of utility, and what is the differentiation of crypto and the blockchain and what it's able to offer, which is utility. And then I thought, "What is the best application of utility?" This is in gaming. It makes way too much sense. It's a value proposition for users beyond sort of free to play and single pay, type of economics. I dug deeper and deeper, and looked at the Metaverse as the transitional ownership value platform.
I was sold from that point. Here's the opportunity. Here's the mechanism. Here's how to do it. And this is what I believe in. So from there, I started talking to a number of people and found The Sandbox and The Sandbox found me, I guess the rest is history.
Ben
Wow – I'm learning a few things about you along the way: a stint at Riot Games, some experimentations on the side, and then finally an executive position at The Sandbox. Let's talk about the Metaverse more specifically. What is The Sandbox and how different is that Metaverse compared to other options out there?
Jon
The Sandbox is the world's largest decentralized Metaverse at this point by most measures. By users and number of experiences and revenue. Certainly engagement. So I would call it a virtual land- based Metaverse by that. It means we have 166,000 virtual lands on a map. Anybody can buy that land and own that land and you have to have access to that land to create content, create a virtual experience. Within that land, we have three different tools that operate The Sandbox Metaverse. You have the game client, the actual thing in which the game is played on, in which you, you, you actually journey through the lands.
Play the games. There is the game maker, which is a tool you use to actually create games and design worlds and levels and different things you can do. And then there's the Vox editor, which creates the actual assets, whether it's avatars or trees or mountains or whatever that go into that land.
Sandbox, certainly from a look standpoint, can give you a feel of a Minecraft or a Roblox, but it's much more adult- oriented. What makes something a Metaverse. It I would kind of consider any open or closed virtual world, a Metaverse probably and maybe to go deeper, probably somewhere where you can actually build your own experiences.
That is one of the core elements of The Sandbox. You have a user layer, you have a creator layer, and the creator layer is where people come and create their own experiences, whether it's a small development team, it could be a person out of town, it could be a big business, big company.
We have tons of big partners like Warner Music Group and The Walking Dead and Time Magazine and Paris Hilton and Snoop Dogg and the list goes on. When we think about The Sandbox, we think about it as sort of the Manhattan of the Metaverse. There will be potentially other bigger ones, but what we want to create is sort of a very concentrated world of the most interesting content and the place people live out their virtual lives in every aspect, just like they live out their real lives.
Ben
The Sandbox has done a spectacular job onboarding key influencers in the media, music, and probably sports industries. What is it going to take to bring us millions and millions of additional users to the Metaverse?
Jon
It's probably going to come down to one thing, which is actually product. It's content. It's better content. This is a web3 issue in general. Even if I could take a step back, we'll look at other sort of technological sort of big changes that happened over history, the way they became popular is not to lead with the tech.
In the tech room of the late nineties, early two thousands, you even use the words like "I Google things," right? You didn't say, "I have a search algorithm," and then you needed to understand what an algorithm is. In some ways, web3 has led with the wrong foot concepts like blockchain and cryptocurrency.
The full rabbit hole that we could go down in that direction, when the truth is, really, that is the backend technological layer. That is not the front- end way. Millions and millions of people need to engage with it. What they need to engage with is that there is a way for me to own and get all this utility or this value out of the things I own digitally and I have the security of not having to depend on anybody to own it. I can take it anywhere. I can buy it. I can sell it. And it's very easy. So, the two things that will drive onboarding will be the use cases and the ease of use. So in the Metaverse side, and on the web3 gaming side in general, just need better games, more games.
The value proposition of the crypto side, the blockchain side will be evident once you're there. The content, better games, that have this is what's needed. Same thing with The Sandbox. We are open. We are actually in alpha mode, still. We are still in the early days of developing it, but we are open and we are live and we are living it because we want the feedback from users. We want users and creators to contribute towards its development. There's still many levels of better type of content mechanics that are coming.
Ben
What advice do you have when it comes to selecting the right Metaverse? What type of criteria should marketers and creators be looking at to make this assessment?
Jon
I would look at the quality of the data that you're able to get back, the concentration of engagement of users, not necessarily the number of users is as important. Do they actually have people and users that are sticking around? Especially at this point, it's not about the big numbers. It's about the quality users and the quality impressions. For example, The Sandbox has 30 minute average playtime per experience in an 80 minute average daily session. That means people are gonna spend an average of 30 minutes there, all the different ways in which you can expose something to whatever sort of content or brand or whatever you're looking for is there for you.
The thing I would say is invest. Small, early, but invest early because the actual real advantage is the learnings you'll get right now as a marketer that will pay off in 2024, 2025. You're not there now. You'll be behind by the time it's really, really valuable and you start getting more and more users. I would experiment now and be active now for the longer term payoff.
Ben
It reminds me of the early days of social media. The companies who started earlier got a competitive advantage. The same can be said for the Metaverse. We're going to talk a little bit more about NFTs. What is the relationship between NFTs and the Metaverse.
Jon
The relationship between NFTs and the Metaverse just depends on whether a Metaverse is using a blockchain system for its monetization and for its assets.
The Sandbox does use that. So our, so the items that you either use or that you collect are going to be NFTs themselves. The land also that you own is an NFT. And all that really means is that it's an asset that you get to own digitally in a wallet. If you compare it to other gaming, uh, such as You know, free to play mobile games, right?
And you're playing a game and you buy a sword. In that game, it's just a sword. It's just a piece of digital code that exists in that game. In The Sandbox, you buy that same sword and it's an NFT and it's something you own. It's something that's in a wallet and can exist in or outside The Sandbox and across multiple areas in a very easy way.
Our actual monetization system is through NFTs, and the assets that people purchase are NFTs.
Ben
It makes a ton of sense. Thank you so much, Jon. Are there any questions about the Metaverse that are hot right now that maybe I haven't asked over the course of this interview?
Jon
Let's see. I think the only thing I will say is that if you look at the investment cycle of web3 and the Metaverse and gaming space the next, let's say, 18 months should be a very interesting time for more interesting content and products in the space that are coming. One of the things that was good about the bull run hype cycle was a lot of capital went into a lot of different projects.
Some of them probably went under, but a lot of them will come out, bringing really interesting products. Don't get too caught up in the hype cycle that happened in '21, '22. That was a blip across a more iterative growth curve that's more realistic.
