You have joined the meeting as an attendee and will be muted throughout the meeting.
Later, we will be conducting a question and answer session. During the question and answer session, if you have a question, please select the Raise Hand button located at the bottom of your screen. Please note that this call is being recorded. I will now turn the call over to Andrew Kiguel. Andrew, you may begin.
Thanks, Jennifer, and Welcome everybody to our Q3 Investor Conference Call. On the call today, various members of the team, you have Lorne Sugarman, President, and the, the key leader at Metaverse Group. Josh Doner, our Chief NFT Officer, and also our leader at Hulk Labs. Eric, our COO, Jonathan, our CIO, Jennifer, our Head of Communications, and of course, Martin, our CFO. I think I've caught everybody there that's on the call for us. Just to jump right into things, Q3 was somewhat a not much going on quarter in terms of operations. We completed the acquisition of all the issues and outstanding shares of Metaverse Group. That was successfully completed. We now own 100% of that business.
We acquired the team behind a company called Startup Slang and obtained its workforce and its IP. That was done as a non-cash deal. Essentially, that was a business that was about to close for operating reasons, but we were able to take the most valuable people there, as well as their IP, and bring that in-house. That had a lot of interesting clients and some technology that we're utilizing right now. Hulk Labs has continued to evolve in its new direction. We announced the creation of a proprietary mobile-based Web3 game called Astraeus Defense. In terms of the overall business, we're continuing to focus on growth.
As the business has evolved since inception in 2000, which was really just holding, passively some tokens for staking and earning that income off the staking, we've moved into developing IP, getting clients and developing various types of software that helps companies go from 2D to 3D. We've continued to invest in our IP. One of the things that is a challenge for us is, you know, how do we show the margins in our various businesses, which are, are profitable or not profitable, but we're continuing to develop clients, while at the same time continuing to invest in IP and software that we think will be valuable in the future? For sure, I would say Q3, we may have been too optimistic on the revenue front.
As you know, with the group members, we discussed, you know, the marketing budgets weren't as quite there as what we thought they would be. We're continuing to focus on that, we're seeing a big improvement in terms of pipeline and signed contracts in Q4. With that, I'm gonna turn it over to Lorne Sugarman to provide an update on Metaverse Group. He'll turn it over to Josh for an update on Hulk, who will turn it over to Martin, then we'll close out and answer questions. Lorne?
Sure. Thank you, Andrew, and thank you everyone, this morning. As, as Andrew alluded to, you know, the business definitely faced economic headwinds, which did impact our quarterly revenue. Although what we've done in, in the interim is invest in processes and systems on our sales side so that we can continue to build top-of-funnel activities. We are very confident and very happy with those top-of-level, top-of-funnel activities, as we've seen that funnel continue to build, even in light of economic headwinds and softer revenues this quarter. We've also had an evolution in, in our business in the IP that we're creating and have continued to invest to, in order to build on multiple platforms.
So we are very focused on, on Roblox and Fortnite Creative as examples, where brands continue to grow on, and brands continue to see significant applications on the, on these platforms. As Josh will talk about a little bit later, I'm sure, we have some really exciting things that we're doing in the branded game side, that we're working very closely with our team at Hulk Labs to build out some of those initiatives. So we see this as, as development and investment in the future of, of our business as those platforms continue to grow. Last but certainly not least, is we've also continued to build out our e-commerce expertise, and so we're in the process of building an e-commerce application.
We have applied to both Unity and Apple, for development, ability to develop on their platforms and on the Vision Pro, as an app developer. We think that this is a very unique experience because it will allow brands and companies to perform e-commerce on all these different platforms. So it's a way for people to monetize, which doesn't exist today, and we think we're leaders and we'll be the first to market with a very interesting e-commerce product. We're excited, and that obviously has required investment dollars to build out those types of applications. With that, I'll turn it to Josh from there. Thank you.
Thanks, Lorne. Yeah, really excited about what's going on at Hulk Labs. In the end of Q2 2023, we went through a transformation of our business. First, we reviewed what the business was working on. For a little recap, what we used to do is give our assets to players, hundreds of players around the world. They would play Web3, play their own games, they would earn revenue. Then we would take that revenue and sell it as our own revenue. So in managing that network of players, we developed our own software around delegating wallets, as well as evaluating the data within the games that these players were playing. Some of that IP we have taken, we've reviewed it, and it's actually quite valuable.
We've turned that into internal products that we are building today at Hulk, and we have developed over the last 3 months. In addition to what Hulk is focused on today, there's 3 core areas of business. Number 1 is analytics dashboards for Web3 gamers. Number 2 is Web3 game development, with our first title being Astraeus Defense, which we announced a month ago. Number 3 is a service delivery partner for clients and working closely with Metaverse Group, as well as, as Lore mentioned, on a game in Epic Store for Fortnite. We've made significant progress, and the really exciting game, Astraeus, is a sci-fi thriller, and it will use some novel Web3 mechanics in its design, and that will be kind of balancing the economies.
What we saw in Web3 gaming earlier is that these token systems were not sustainable and led to poor player experience. We've taken all that learning and all that analysis, and are putting it into this game that we're developing, and it'll give us the ability to develop games further. So I'm really excited about that. We're using a lot of AI-assisted tools in this, and that really improves the creative process, and it's kind of a theme we've seen in the last six months really develop. We think it's a sustainable advantage, knowing how to use these tools and building the teams that know how to use these tools. That is core to our game development. So yeah, we're really excited about what's going on at Hulk.
With that, I will pass it off to Martin to close off our financials.
Thank you, Josh. Hello, everyone. Please be advised that the numbers presented to you shortly are in USD, unless otherwise stated. For the 3 months ended June 30, 2023, company recorded revenue of $129K, compared to $251K for Q3 2022. On the 9 months ended basis, our revenue was $584K, compared to $903K for the same period of last year. Operating expenses were $1.2 million and $3 million, respectively, for the 3 and 9 months ended Q3 2023, compared to $753K and $5 million from the same period last year. For the 3 months ended, the increase in expenses was due to additional overheads incurred within both Metaverse Group and Hulk.
We have a net loss of $902K for the 3 months ended June 30th, compared to a loss of $11.9 million for Q3 of last year. On a 9-month ended basis, net loss was $879K, compared to a loss of $10.8 million from last year. We ended the quarter strong, with $4.3 million in cash and $7.9 million in liquid tokens, and we are well positioned for growth going forward. With that, I will turn back to Andrew for closing remarks. Thank you.
You unmuted. Yep, thanks. Again, just to summarize for everybody, and thanks everybody for, for attending. When you think about Tokens.com, really the way we want investors to think about us is a, a, a holding company or a parent company to various Web3 assets that are all interrelated. You know, when you think right now, we have Metaverse Group, and we, you know, Metaverse Group, the key things that we're doing there are, you know, three design activations for various companies. We're now platform-agnostic, meaning we, we've actually just signed a deal with a, a furniture company to build in Fortnite. We're building in Roblox. We've applied to become a, an app builder for the, the new Apple Vision Pro. We're able to design and help create, you know, e-commerce pathways for selling things like NFTs.
We're also doing branded games for various companies, e-commerce integration, as well as driving traffic. So when you think about Metaverse Group, that is sort of our company that's dealing with external brands and helping them navigate from, you know, 2D to 3D. The other assets we have within Hulk, I think you should view Hulk as sort of our proprietary business development company. That's where we're building our own game, our aggregator website, all of these things. We also have the domain names. We own the CocoNFT. We own our stake in Metaverse Architects. So really, we have a set of assets, all of which are very much linked to this growth of what's happening within Web3. If you read the...
You know, there's a recent report by Citi from March this year, talking about the tokenization of everything on the planet, talking about how the user base for Web3 is gonna go from, you know, millions today to billions. That the size of the market is gonna go from, again, $ millions and $ billions to, to the $ trillions. We're trying to position ourselves in that area where it's a balance between, you know, trying to go for that low-hanging fruit of revenue, while also trying to invest in this new technology, that we're trying to come up with the killer apps, the killer, you know, things that we can implement to assist companies to monetize. Really, that's what we're trying to do, is find the pain points for companies within this area and how do we help them get there and develop this, this IP.
You know, it's a challenge. We continue to invest. What I would say is the pipeline is looking much stronger, in terms of, you know, recent deals that we've landed. We've landed a contract for finalizing one of the largest financial institutions in the world. We've landed the for a furniture company to develop a game within Fortnite for them. We've done, you know, some other things which will come up and, you know, we're continuing to build. We're optimistic about the pipeline. We're optimistic about the things we're building. You know, we thank investors and shareholders for their patience. We know this has been a bit of a longer road than was anticipated. With that, Jennifer, I'll give it to you, and we can take questions.
Again, we will start the question and answer session now. If you have a question, please select the Raise Hand button located at the bottom of the screen to be entered into the queue. The first question will be from Bill. Bill, you are able to speak now.
Hi, can you hear me?
Yes.
Good morning, Andrew. Thanks for, taking my questions. I just want to start off with Metaverse Group. Just hoping to get some color on terms of, you know, where your clients are demanding that they have exposure to... You know, are there any virtual world at this point that you'd say are, are really leading the pack in terms of, where your clients want to be situated?
Yeah, I'm going to turn it over to Lorne, but what I'd say is, back in 2021, the hype cycle was definitely there for what are called the Web3 metaverses. That was like Decentraland and Sandbox and Somnium Space. What I would say is, today, those places have not been able to attract the traffic that they wanted to. They have not been as successful as they wanted to. The traditional metaverses, like Roblox and Fortnite, have really been thriving. You know, you have all this media talk about the metaverse is dead. We're seeing just the opposite. You're seeing, you know, Apple launching the Vision Pro. That is a significant development in the industry. Apple has a history of taking technology products and making them mainstream.
This is something that, you know, one of the, the largest technology company in the world has said, "This is the future. This is our new product, and we'll invest in our time." Meta, formerly Facebook, again, one of the largest technology companies in the world, has said, "This is where the technology is going, and this is how the Internet is going to be used." So the pivot that we've made is to say, we're not going to hang a shingle just on the Web3 Metaverses, although we're able to do that, we've been expanding outside of that. Maybe, Lorne, I'll turn it over to you. You can talk a little bit about interactions with clients and what they're asking for and looking for.
Yes, sure. Thank you, Andrew, and thank you, Bill. You know, Andrew, Andrew kind of stole my thunder, and I think what he said was very accurate and very true, is, you know, unfortunate for the Web3 metaverses, but they all put it DCL Sandbox. You know, there's definitely been a decline with consumer interest. In fact, frankly, very minimal consumer or brand interest in, in those metaverses today. Whereas we have seen very significant interest in Roblox, Fortnite, et cetera. Spatial is also one that has seen quite significant interest, and we have some quite, quite interesting activations coming there as well.
I would say the traditional Web3 ones have moved away, whereas the Web2 ones, or maybe better said, the more traditional Web2 ones, is where our consumers or customers are most interested, and we expect to see continued significant growth in those, and that's why we've spent the time investing in our infrastructure to make sure that we can deliver on those platforms.
Great. Just as a follow-up, are you able to share some of the color in terms of the, the traffic across some of the storefronts you've designed in these virtual worlds? Just hoping to get some KPIs on that.
I- unfortunately, I don't have any statistics off the top of my head, to provide you with, with respect to that. You know, I would say it, it varies by a virtual world, and it obviously varies by activation. It varies by how much, companies are willing to invest in, in what they're building. For example, I'll, I'll pick on, DKNY in a very positive way. During Metaverse Fashion Week, this year, they, they invested significantly in NFTs and gamification of their site. They saw a very significant number. Over 10,000 users came to their site and they sold out of all their NFTs.
So depending on what brands are willing to do, it's really hard for us to, you know, compare site by site or by activation by activation, because it really depends on how much they're willing to invest. As time progresses, Bill, happy to provide those so you can get some, some good KPIs with respect to the different platforms and what you can expect out of the platforms. Maybe one thing we can do for you is, instead of using individual names of the different brands that are doing activations, we can provide you platform by platform basis of the type of stuff that we're doing.
Yeah, that'd be great. Thank you for that color. Then just moving on to Hulk Labs, can you speak to some of the developments in terms of gaming economics? You know, my understanding is that the company pivoted away from the player network in the prior quarter. You know, how is Astraeus Defense shaping up relative to kind of the profitability or revenue generation of the player networks?
Yes. The revenue generation of the player networks was not hugely significant. It was actually giving us a really good way to experiment and understand how these, these games worked at scale. So the game is, is building IP that is a little longer run. The same with when we look at on the data side, that also is a, a little bit of a longer run IP build, and that's product that we've been, you know, facing. However, it's very scalable, so you can build those businesses quite large, and we've seen games obviously be extremely successful. There are mechanics in there that do allow us to monetize it as we develop it, but it's been under development for some time now, and right now the IP is, is already been all developed out.
We've released some of it in terms of a game lore trailer, and right now we're focused on the core game development. You'll see more about gameplay and the actual trailer of the gameplay very soon, which we're pretty excited about. A little longer run on those two parts of the business. However, the game development side is something that we are already earning revenue for and is something that's revenue generating today. When brands are looking at this space, they want to do gaming well, because at the end of the day, gamers are very picky of what they like to see and, and build. Some of the popular indie games that have got blown up on TikTok and have been quite successful are not built by necessarily agencies, but built by indie developers. Our...
The guys that we are building games with, they know games better than anyone, and they are the ones that are creating not only avatars, but also doing it for brands, and that is revenue generating today.
Thanks, Josh. Just as a follow-up to that, you know, in the press release, you guys mentioned that there was a significant development in Web3 gaming, with Google enabling NFTs in gaming apps in the Google Play Store. Can you just share your view in terms of how Tokens.com may look to capitalize on that development?
Maybe I'll, I'll really quickly grab that one, and then throw it to Andrew for some final thoughts. On the day that we announced Astraeus, Google also announced enabling NFTs in Google Play Store for both games and apps. This is extremely significant. I've been around NFTs since the very beginning of, you know, what, many years ago in 2017, and to see where we are today has blown, absolutely blown my mind away. I think, you know, one of the key pacemakers or I would say, you know, directors of, you know, leading technology is on Apple side, it's the Vision Pro saying, "Hey, we're investing in the future here." On, on the apps and gaming side, Google plays a large part in that because they own the distribution of all these applications.
To enable NFTs in Google Play is extremely significant, because that's where 1,000s, if not 100,000s of apps and developers are constantly tinkering away and adding new business models and testing new things. Also for our game, obviously, it makes a lot of sense. The rank system, if you go to astraeusdefense.com, it's actually linked on the Hulk website, hulklabs.com, you'll see there a bit more about the player economy and how we've built it out. We've done it in a really novel way, based on ranking and the ability to use the marketplace as a resale spot. That will lead into cosmetic skins and other things that players can buy and purchase from us.
Andrew, I don't know if you have anything to expand on that, but really exciting, development though.
Yeah, I, I, I, I think you summarized it well. You know, Bill, what I'd say is, I've been in the, the, call it the, the crypto Web3 space since 2017, and we're constantly battling headwinds with respect to, you know, this will never go mainstream, this technology is useless, there's nothing to use. Part of what I think is significant is you can get into some of the details of what this can do. Again, what you read in the media and everything else is very opposite to the things we're seeing. Like you saw, you know, PayPal just launch a U.S. dollar stablecoin this week. We saw Apple launch the Vision Pro. We saw Meta change their name. Now we're seeing Google enabling, you know, NFTs.
All of this really is, you know, speaks to the fact that these major corporations in the world are all seeing the same things that we're seeing. Obviously, they're, they're larger and better funded than we are, so we're trying to sort of find these little niche areas where we can profit from this over time. You know, I think part of the significance of all this stuff is to say that the It's not just us anymore who's looking at this area and, and seeing, you know, massive opportunity. It is the major players as well.
Great. Thank you, gentlemen, for that call. That's all I have.
Awesome. Thanks, Bill. The next question will be from Michael Donovan.
Hey, Michael.
Hi, Andrew. This is Michael Donovan calling for Kevin Dede. How should we think about revenue growth for the Metaverse Group and Hulk Labs going forward? Can you give us a bit more color for 2024?
Yeah. I, I, I'll, I'll do my best, but I don't like providing guidance because we're in an area that, you know, has a mind of its own. I'd say starting with Metaverse Group and the way we look at it, there's, there's two aspects to Metaverse Group. There's the, the current revenue where, you know, we have a, a sales team, a client integration, and then devs that provide these like 3D designs and, you know, branded gaming experiences that we team up with Hulk on. Right now, as I mentioned earlier, we've signed up, what I would call a very significant financial client. That will end up being our largest contract to date, I think, if I'm not mistaken, Lorne, I think that will be very large. We've signed up a bunch of smaller contracts, that will add to that.
Really what's there is, is our ability to continue to build our, our sales pipeline and land these clients. Once the client is landed, we turn it over to our client integration team that works with the devs, and generally, every project takes from 3 to 6 months to complete, depending on the complexity. Within that group, what we're trying to do is say, "Okay, what are the, the areas here? If we want to stay ahead of the game, what are the areas here that can distinguish us from, you know, the other sort of handful of people doing what we do?" We said, "The way that this is gonna change..." You know, e-commerce, I've said this before, e-commerce hasn't changed in 20 years. It, it's been very stagnant, and now finally, we're starting to see some changes in how that's being done.
We have a small team that is really working on creating a killer app that can be integrated into 3D environments for companies, that can also lead back to the traditional one. I would almost call it Web 2.5 in terms of what we're trying to do by linking Web2 and Web3. When you think about revenue there, it's gonna be our ability to continue to land clients. I think as we continue to land larger and larger names, you know, like I said, some of the names that we've been landing recently are household names. I think, I'm hoping that will help us attract more similar type clients.
If we can complete the development of this e-commerce product that we can start integrating in, I mean, that'll either be, you know, in my perspective, that could be a zero or, you know, a grand slam home run. If we can build that properly and get that integrated in, we can start licensing it out. At the Hulk side, there's two main areas. Number one, we'll continue to provide and work hand-in-hand with Metaverse Group on this sort of this branded gaming, which, to put it in perspective, like, in the early days, we would build these virtual stores, right? Like Forever 21, H&M, DKNY. As we start to develop, clients were coming back and saying, "Can you help us drive traffic? Can you help us have a party?
Can you help us build a game? We've continued to add on these services because we really want to be a one-stop shop for these companies. When we build something for them, it's more than just the, the game. You know, KB Home is another good one. KB Home is one of the largest home builders in the US. We built a customizable or a 3-model home, built to scale, that are customizable, you know, in terms of your, you know, countertops, your backsplash, your brick color, all these types of things. We're trying to make, to use this new technology in ways that is useful to companies beyond just that, "Hey, come to our really cool website." At Hulk, we're providing some of that branded gaming consulting. We have the game.
Again, we feel pretty good about that game, that we'll be able to get some success, but that won't be ready till next year. Then we have this aggregator website, and what we're really trying to do, you know, we're, we're actually quite along, and we'll be putting together a press release on this in the next couple of weeks. Essentially, it's gonna be an aggregator website, whereby players, we're gonna take the technology we have, and where our players can link their wallets and their playing statistics up to a website in a way to sort of show them off. Games we're already speaking to, can link in, and the same calculators we were giving away for free before, which is which game provides the best return on your investment, will have their statistics there. So we believe it's gonna be...
You know, what we're trying to do is almost like the CoinMarketCap, but for Web3 gaming. We don't know anybody else doing that the way we're doing it, which is be doing the link in this, you know, the wallet technology, which is really what we developed through our player network. So we think that's got the potential to be worth a lot, A, from advertising revenue, a SaaS model that's being built in there. As well, I mean, if you look at CoinMarketCap, obviously they're, they're quite large, but they traded for about $400 million last year. There's significant value that we could be building from that as well.
If, if I may add on to Andrew, what's really exciting in gaming is last year, $4.5 billion of funding happened for Web3 gaming specifically, and we're starting to see some of those quality titles coming to market this year. Hulk Labs has recently put out a couple of games that are really kind of testing the limits and experimenting really in novel ways. We'll see more of these titles. As more of these games come to market, it's gonna build the audience that's playing them, and there's gonna be needs for data. Players that want to track and see how they're doing, how they're playing, what's growing, what's interesting, what should I be spending my time and finances on?
Then you'll have games too, that are like, "Hey, I wanna attract players." A competitive advantage for games is not just the clicking and moving a character and, and choosing something, it's also all these things that are around the game. The data quality, the kind of immersive part of it that you can get in with. You know, if I own a character and I'm playing and it has a high win rate, can I sell at a higher valuation? As more games are created, same with more items and more characters that have what is metadata tied to its NFTs, which then has valuations in secondary markets.
So all this data needs to be tracked, and it's something we've been working on for a year and a half on, and I think we're well positioned to have a compelling offering there.
Yeah. Keep in mind, Michael, as a, as a statistic, currently, there's only a few million Web3 gaming wallets out there. Citi has did this full report on this topic in, in March of this year, and they're predicting by 2025, which is only a year and a half away, that there'll be 50-100 million players in Web3. When you think about the vast amount of volume and people moving towards this, this migration from traditional gaming to Web3 gaming that's projected, that's where we see that coming in. Again, back to my original point, we're balancing here between generating revenue today, which we know is important to shareholders, but also continuing to invest into things that we think will be highly valuable for us, you know, by 2025.
Okay, great. Thank you, Andrew and Josh. Now Astraeus Defense will be launched next year, hopefully. For the dashboard that you mentioned, is there a beta version available right now, or when can players start tapping into that?
Uh, yeah-
We're hoping Q4 this year.
Q4?
Yeah. We're just finalizing the timing, but it's actually further along than the game. We're just sort of finalizing some things, and we'll be providing investors with some additional data on that, I would say, towards the end of this month or possibly in September, when, you know, I think a lot of people are away in August. We may get a better audience for what we're, we're talking about in September.
Okay. Now, what are the typical development costs for games like Astraeus Defense? How can we quantify how much is saved from the use of AI tech that you mentioned in your press release?
Yeah. It's, it's quite significant. If you were to go get a quote from a game studio to build a game like Astraeus, you would probably come into the $500,000-$1 million area if you also add on the services. To put in perspective, the cost savings is almost a tenth of that, if you use some of these tools really well. kind of something that is just going to impact game development. Like it's, it's a known at this point, whether it be on the creative side, you know, animating characters or scaling out the development of units. Like, let's say you have a game that has 100 unique units in it, that kind of development of that used to take a long time, a lot of people to build.
Each of them had to be animated, each of their movements had to be animated, and all of that required a lot of people to do. Now you can have, you know, a small game development team that is just kind of tinkering and tweaking and building the Lorne and kind of running it through these models over and over and over again until they get an output that is in their vision. It's quite significant, and it adds a lot to the creative process, and we think this is a competitive advantage that, you know, will be here for a while as we, you know, continue to learn these tools really well.
We think we probably, to the stage we're at, using AI versus not using AI, we think we've saved probably somewhere between $200,000 and $300,000.
I was expecting that. Okay, okay, helpful. Now, I, I know it's a bit early, but to dive into more Google's policy change for Web 3D games, are there download statistics out there, on how many games have launched after this policy change?
Not to.
Are available on Google's platform.
Yeah, not to my knowledge right now. It was literally a couple of weeks ago, I'll have to follow up with you on the next call, Michael.
Yeah.
I think it'll be too soon.
Okay, on the e-commerce side, with the use of Startup Slang tech, have you hammered down on a take rate for the Metaverse Group, in terms of the revenue share with Shopify Plus's platform, with the games that are actually implementing this? How would you even think about that?
At this point, Michael, we haven't. In some cases, it will be important to us, and we'll, we'll get there on that, and we'll come back to you in the next conference call. In other cases, it, it isn't based on the application tool that we're going to use, because fundamentally, the application that we're building will effectively be its own standalone app, and we will not be required to partner with Shopify on allowing companies or branded companies to use it. They'll already be using the Shopify store themselves, and it's just an application that allows for the transaction to occur, as opposed to actually sitting on the Shopify store itself, if that makes sense.
No, it does. Thank you, Lorne. Let's see, so, so these brands, Andrew, you mentioned the projects may take 3-6 months to incubate. What are you seeing for the, like, sort of the staying power with brands? Are they, are they looking long term, or are they, are they just putting aside budget for one-off projects and, and seeing how they go? I know for each brand, they can take charges, but, but what's the overall consensus that you're, that you're seeing?
I'll, I'll take this one if it's okay, Andrew. I would say to you that all these brands, actually, all is an overstatement, but most of these brands are taking a long-term perspective, and you'll see repeat activations and repeat use of 3D technologies or NFTs or other technologies related to Web3. For example, you know, KB Home is a great example where Andrew referred to, where, you know, they built their first application in Decentraland. They're now looking at other applications and how they continue to use the technology to evolve it. I referred to DKNY earlier, another great example. They've participated in the first Metaverse Fashion Week. They've participated in the second Metaverse Fashion Week. They've created NFTs and again, continue to evolve.
There are many others that aren't just our customers that, that have the similar view. We typically look to partner with long-term clients that are looking at a long-term vision, and we're trying to share that vision or work with them on that vision. There is quite a bit of, of repeat success and quite a bit of sustainability in our client base.
Michael, what I would say is, to me, it's, it's inevitable that every single company, and major company in the world will have some kind of 3D website over the course of the next couple of years, whether for something related to metaverse, whether you call it the internet or whatever you want to call it. What we're, we're seeing here is that, yeah, they're coming in, they're doing these sort of quick things, but they're also focused on, "Hey, we realize we need to be here." I, I'll give you just sort of a quick story. I was talking to, you know, a, a friend of mine and, you know, I have got 3 children, you know, that are 9, 9, 11, and one younger, and talking to other people that have teenage kids.
These kids spend a lot of their time playing Web3 games in places like Roblox and Fortnite and others, other games and streaming. And when you think about the brands and like, this, this can't be a one-time thing that they're doing because if you think about the Generation Alpha, they talk about that in our, in our deck, which is going to be the largest generation in history with the biggest buying power and 50% of the workforce by the end of the decade, it can't be a one, one and go and done thing. This is how e-commerce, this is how shopping, brand education, advertising, all these things are going to be done over the course of the next few years, because that's what that generation is going to demand.
Everything today has really been catered to how the baby boomers wanted it, but the technology has changed, and this new generation thinks and acts differently. You can see that just by reading the news on a daily basis. This isn't a one and done type thing for clients. They're dipping their toe in the water. We're starting on some small projects. The projects continue to build, and we continue to brainstorm, even with our earliest clients, as to how can we build something bigger? How do we access this generation? How do we advertise and build stickier relationships with our current client base?
Okay, great. Thank you. One last question. Staking revenue and your current crypto holdings, are these going to remain constant for the next year or two? Are you, are you thinking about rotating the profits into Metaverse Group, Hulk Labs, or selling some of the crypto to fund other projects? How should we think about staking revenue?
Yeah, you know, what I would say is it provides us a good cushion. We've always liked having that there. Like I said, it's about $8 million right now in, in with the tokens. I, I would say for now, we're not planning to, to move it. It's primarily all ETH. You know, I'd love at some point in the future potentially to be able to add to it. However, if some of the businesses, you know, our cash and capitalization is, is, is pretty good today. There's no requirement for us to do any type of financing. I think we have, you know, at least a couple of years runway before we even have to touch our tokens.
That said, if there was another crypto run, you might see us taking some, some of our tokens off the table and converting them to fiat. Right now, I think we're happy earning sort of that passive staking income. We may, at some point, take some of the staking rewards off the table just to, to pad the balance sheet a little bit. For now, it's, it's there, and you can consider it as a, as a constant.
Okay, great. I apologize for misleading you guys. I promised this would be my last question. You mentioned about swapping over to fiat. With all the news and stablecoins, are there any talks about, about games, partnering with, with another large company to develop their own in-game, stablecoins versus their native tokens right now? Are you guys hearing any talks around in-game stablecoin?
In many games we've analyzed, they have a dual token system, and so one of the tokens is typically for rewards and transacting, and then another token is for the ecosystem. This is quite a common thing. As for games accepting tokens, it might be a little early on that, 'cause typically that's at the beholding of, let's say, on the mobile side, Google and Apple and their policies around in-app purchase and whatnot. Many games do accept payments, transact their NFTs in cryptocurrency. It is already quite common. I think generally, as you know, Circle and there's regulation around stablecoins, it's my belief that as more people hold them, it's, it's kind of more buying power, if you will, or addressable market for if they're using that type of transaction medium.
In, in short, I mean, even Yuga now has a coin, and they, their games are kind of built on top of that platform. I, I don't think that will cease to continue. I think that will grow substantially, actually, over the next couple of years.
Okay, great. Well, thank you so much, Andrew, Lorne, and Josh, for entertaining my questions. Best of luck.
Thanks, Michael.
Thanks, Michael. There is no more questions in the queue, so you're safe to continue, Andrew.
Yeah. Just to wrap up, I think, you know, thanks, everybody, for your patience. I recognize this last quarter, and by looking at our share price, is not necessarily well-received by the market. We're continuing to sort of work hard on, on your behalf. We think we're working on a lot of interesting things. We're trying to be, you know, fiscally prudent with our capital, and we'll, we'll chat again in three months. Thanks, everyone. Bye.