The $180B Industry Bigger Than Hollywood Nobody Talks About

Sean Weisbrot: Welcome back to another episode of the We Live to Build podcast. This is episode 64. This entire time I've been doing interviews around business and psychology. While I try to enjoy myself with all of these podcast recordings, the final episode usually sounds somewhat serious. I happen to come across Shmi Beta, the VP of Marketing for Olo, an Israeli company. That focuses on gaming and e-commerce and how they can put those two things together in a seamless way. And it brought out the kid in me and I decided that this episode was going to be different because while we do get into the psychology of games and gamers and why people play games, what they get out of it. If it makes them violent or not. We talked a lot about the games we like, why we play those games, what we get out of these experiences. This episode gave me a chance to share a little bit more about my childhood and my teenage years, and first LMI to share a little bit more of an intimate side of himself that he may not, uh, usually share. In business as well. So while we do tick the check boxes of entrepreneurship and psychology, we also do geek out pretty hard. So if you're into games. You're gonna love this episode, and hopefully it's something you enjoy as a non-traditional version of this podcast. And if you're not a gamer, while you may not appreciate it, I hope you can still try to listen to it because maybe it'll help you better understand the people in your life who do like video games. What is it that you're working on right now and then we'll move in deeper from there.

Shlomi Ben Atar: I'll tell you a bit our, about our company Ello, and then I'll tell you about what we're working on. What Ello does basically is it's native in game advertisement. It means, uh, that we have billboards or objects inside the game itself. On top of those, we have videos of commercials of different brands. This is one thing that we're doing. We are happy, we're helping brands and, uh, publishers or game developers implement those billboards inside their games and brands. We're helping them to put five, six seconds videos that sell their product inside games, which means if they have a 32nd video, it's not good because the gamer doesn't have the time to stop in the middle of the game and like watch. 30 seconds of video. So you have to have big logos. The idea should be right there, big and clear, but the main thing when we're working on now is a product called G Commerce Gaming Commerce. It means we have a shop in the game. Let's say you finish a level. Or you reached a certain amount of points, you get a shop where you can buy real products after you won an achievement of, uh, some sort, like a discount or a one plus one, like a bonus or something. So you win like in a game, but you win. An actual thing with a real product like a, it's like real money basically. It gives the player a lot of incentive to stay inside the game and also to buy. So it's really, really interesting and I think it's the first of its kind. So we're basically combining two spaces. One is the mobile gaming world, and the second is E-commerce world.

Sean Weisbrot: There's a lot of ways for companies and creators and users to make and spend money. I've never heard of this kind of blending of advertising in, in an e-commerce inside of games, so I'm just curious how you figure the smoothest way to present the information so that it doesn't feel awkward to gamers.

Shlomi Ben Atar: What COVID brought to the world is people spent a lot of times inside games and people just had to buy things online, which everything went boom. And so physical stores got like, lost a lot of money, but online stores earned a lot of money. So we thought, you know, how to combine both world because what we do in our first product is like in-game advertisements, right? So it means we are tapping a lot of untapped, um, real estate. Inside games. So there is a, another real estate, which is a shop games already have shops, but it's like the gaming material stuff. Like you can buy skins, you can buy weapons sometimes, um, modifications, stuff like that. But still, you can't buy real stuff. Like for if I want to buy headphones or if I wanna buy covers to my cell phone or something like that, can go to an any online store and buy them. We thought. What about if you can win it as an achievement? We know that all the, uh, slots, games and, um, basically gambling games are really popular all around the world. It's not gambling. It's really far from gambling, but it's still something that, like psychology speaking, it's like basically it's the same thing. You are really inside the game. You're very engaged as a gamer. Okay. And then you win, you win a trophy. Do you know what's going platinum? In a game means No, no, no. Okay, so, so you're not a hardcore gamer, okay? But a lot of hardcore gamers, uh, what they do is they finish the story. Okay? There's like the main story of the game, and then there are still a lot of things to do. Like, I don't dunno, taking posters off the wall, discovering whatever small things, you know, doing side missions. And when you complete. Everything. Then you get like a trophy. It's called like a platinum trophy. Basically. A lot of the gaming world or gamers, they love the achievement. They love the trophies that you get for each achievement. So as we see it in G Commerce, the product that you sell. Is a trophy, you just won a trophy. We believe that people that are super engaged inside the game and they saw billboards with the commercials of that product, and then when they arrived to the store at the end of a level, or when they got like a certain amount of points, then they'll be able to buy the product, which is actually super interesting to see how it goes and we believe it. The next best thing in the, uh, e-commerce slash gaming world.

Sean Weisbrot: You were talking about people being engaged in games to a point where they are willing to put in extra hours of their life to complete everything. What makes a game engaging to a point that people wanna do that? And what kinds of people are the ones most willing to actually engage?

Shlomi Ben Atar: The gameplay itself? I mean, the graphics. Can be okay. If it's bad, it's bad. Okay. But there's like amazing graphics and there's okay graphics. Okay. Graphics with great gameplay can be amazing to gamers. I'll give you an example. Spider-Man, there was a big open world game of Spider-Man. After you finish the main plot, you have a lot of stuff to do inside Manhattan and you can just swing by, you know, and just go do a lot of side missions and stuff like that. And because the gameplay is so much. Fun and it looks great. The game looks great. You wanna complete the game, so you're so hooked into this game. It's exciting. It's a real live emotion. Like it's love really. So you want to finish every little thing in the game. And then a lot of them are posting it online, like I did the platinum thing in the game. So I think it's an emotion, like if a gamer is really into a game, it's like falling in love with this game. Have you ever been. In love with the game.

Sean Weisbrot: Oh yeah. Final Fantasy Three. Final Fantasy three on Super Nintendo, but actually considered Final Fantasy Six in the entire series because there were three games on NES that came out in Japan, but didn't come out in the us.

Shlomi Ben Atar: Really? And you have nothing to say on like on seventh one.

Sean Weisbrot: Oh, I mean, yeah. The seventh one's good.

Shlomi Ben Atar: He's the best. They just remade him.

Sean Weisbrot: Amazing. I know. I don't have a PS four, so I can't play it. Here's what kind of gamer I am. I don't have a PS four, so I watched someone's full play through of the remake of part one. So I spent 15 hours watching someone else play it. I

Shlomi Ben Atar: have to stop you there. So you're so in love with the game that you actually, because he didn't have the console, you actually washed 14 hours for, you washed for like half a day. You washed. Someone else playing the game. Why?

Sean Weisbrot: Because it's not just a remastering of the, uh, the pixels. It's a remake of the story, and I wanted to see how the story changed from my original play through 20 plus years ago. Why? Because Final Fantasy seven is a pretty damn good game, and you're in

Shlomi Ben Atar: love with the game. You are in love with the game. You won't ever see a 14 hours game if you're not in love with it. That's the thing.

Sean Weisbrot: When it came out, we didn't have social media. People weren't taking pictures or screenshots. They weren't sharing their love. Like the internet really wasn't a thing at the time. It was like 19 96, 19 97. So like if you were my friend from school, you'd come to my house and you'd watch me play or I'd let you. Play. Like that's how we shared our, our affection for these things. You know, we don't have social media to tell 80,000 strangers across the globe. I love this thing. You should love it too.

Shlomi Ben Atar: That's why we have Twitch or YouTube today. That's exactly the thing.

Sean Weisbrot: I watch people play Minecraft. On Twitch,

Shlomi Ben Atar: really,

Sean Weisbrot: they're not just playing Minecraft because they've actually developed drama, they've developed storylines and plots. They've created a soap opera around 30 different characters, 30 different people. And they, uh, some of them, uh, stream on Twitch. Some of them stream on, uh, YouTube, and they have several writers and they each have their own channels. And so whenever there's lore. You can watch it from the perspective of any of the characters that you like, and if one of them goes offline, if like their portion of the lore ends for the day, then you can switch over to another character that's like continuing on with their lore beyond that person. And most of them are like 15 to like 22, 23 years old. But I love watching them. There's the, some of their streams are three plus hours long, but then there's people that created YouTube channels specifically around. Capturing the highlights of that stream. So they'd be like, oh, this character did this thing. And like that's the title and it's like 10 minute clips. You don't have to watch the other two and a half hours, but you get the gist of what's happening in the lore as it happens. 'cause there's like 30 characters. So it's just too much time.

Shlomi Ben Atar: People call it content today. I mean, for me, when we grew up. Content was a great TV show or a great movie or a great play or something like that. And today people are calling, let's say, you know what great content is in the gaming world. It's like, for me it's doctor disrespect. You know, disrespect. He's a character. Like he is, he is like, I think he's around his forties. Okay. He has a mustache and he has a wig. Okay. And he curses a lot. He's a great, um, he's a great gamer. Like he's really good at games. He played and he's like, he's a character. He's not, he's not, it's not like his real name or something. Like, this is his name. Doctor Disrespect. Um, he's great. And today streaming. Is content, which is amazing to me. Being inside games. For me, it's exciting because a lot of people, a lot of you can't even count. It's not millions. I think it's more than a billion of gamers all around the world. It's like 2.9 to be exact. So you understand like that. The future as we, as I see it, is all about gaming. Think about vr. It's not there yet, but it's gonna be there. Think about ar. It's not there yet, but it's gonna be there. The problem with AR and VR is hardware and. In-game ads are gonna be in vr, eventually they're gonna be in ar. Eventually you, you're gonna see ads all around you physically. When you go to Times Square, what you see all around you, you see ads. What we do is basically, I mean, doing the same thing inside a game. When you go to like an open world city, okay, and you look around, you see buildings, you see cars, you see all those things that a city has. Part of the things that a city has. As commercials, look around, you have commercials. That's what we do. And you also have shops. The virtual world is already there. We're there also as a business,

Sean Weisbrot: I feel like Second Life pioneered this kind of idea because from what I recall, there were people who were in game who had things that they could sell to each other. So normally when you play a game, you go up to a, a non playable character, an MPC, and you buy. Let's say you wanna buy a sword and, and you spend a hundred gill, you know, this is the in-game money. You spend a hundred GI to buy this sword, but in second life, you know, you would use like a PayPal transaction to buy something from the other user. So you're in the game, you're moving around in the game, you approach them, you wanna buy something from them, and you send them dollars. That was like one of the first instances of global transactions. I think as you're talking, you know, with vr, we're going to be in that again pretty soon and I think blockchain is probably gonna be the thing that drives it forward. Totally agree. There's been a lot of discussion about children buying things like apps or in-game purchases with their parents cards without their knowledge because the card was pre to the account and then the companies have to provide refunds because the parents are pissed 'cause the kids spent $5,000. It's an extreme example.

Shlomi Ben Atar: It's not that extreme. I've heard things.

Sean Weisbrot: Does Sayo take any sort of responsibility for this? Or how do you work to minimize or prevent this from happening through the connections you make with the in-game shops that are connected to traditional e-commerce items?

Shlomi Ben Atar: If you want to buy, uh, a product, you have to fill in a lot of intel about yourself. Not a lot, but you know, names, her name, email, and credit card. And most kids don't have their parents' credit cards. You can, uh, use an automatic, kind of like an Apple Pay or Google Pay because of this thing. There are workarounds all around that. There are so many parental controls. A lot of times they can control their kids' movements inside of the game or like they can purchase stuff if you don't have those defenses. Then, you know, those things are happening. People ask for refunds and stuff like that. I don't think that a kid can insert his parents' credit card unless he's really stealing the credit card and he's, if he steals the credit card, then you know, he can shop anywhere.

Sean Weisbrot: When we spoke about this last time, you had said that you guys work with, uh, like Apple Pay and Google Pay, things that it's already connected to the system so they don't have to enter in information. Again,

Shlomi Ben Atar: we're not working with Apple and Google yet, but if you want to work with Apple or Google Pay, you can't just use Apple or Google. You have to face scan or, or stuff like that today.

Sean Weisbrot: As like a preventative measure before you confirm the actual payment. You

Shlomi Ben Atar: can't buy stuff today, just like that. You have to, uh, confirm your purchase, which means you have to, uh, have a face scan or a fingerprint scan, just a two-way authentication, some sort of, uh, authentication. So those are defenses against kids.

Sean Weisbrot: All right. I want to dive a little bit deeper into the psychology. Again, we touched on it very briefly, but I think there's an important conversation there. Games have. Become more popular as a result of the pandemic. They were already hugely popular. Gaming globally is like $50 billion a year, I think, or maybe 50 billion just in America. I don't have the numbers in front of me, but I've, I've heard recently, it's massive.

Shlomi Ben Atar: Are you talking about the whole gaming industry? Yes. If it's the whole gaming industry, including eSports and stuff, the numbers are 180 billion. I think it was even before COVID, it was 180 and I, I believe that post COVID, it's way more, it's. What Hollywood makes a year, which is amazing.

Sean Weisbrot: Why do you think people went to games during the pandemic? Because I've heard, I heard that people were buying more alcohol, they were buying more cigarettes and marijuana and more games. So why? Why do you think games is on that list?

Shlomi Ben Atar: It's a nice addiction thinking, this is the psychology. It's like reading a book, like a gut book or watching a really good movie. For me. I'm entering another world and the peace and quiet that it gives me is, is priceless Also. It's very social today. If you play Call of Duty, fifa, you play with friends. Okay? Or against real people. The one thing that wasn't hit with the COVID was, uh, in the internet, we have internet, so we can play with friends and with the good headphones, it's like they're next to you and you. They have a character. You have a character, so you're playing. A lot of people played Call of Duty, Fortnite. All the battle rial games and they had company. It just passed the time for a lot of people during quarantine or people got addicted to having fun people, you know, lost jobs, relationships, everything was tested.

Sean Weisbrot: It's an interesting observation about the sociability of games. When I was a teenager, I used to play counterstrike, so I'm familiar with. That side of it. In terms of consoles, I never had a console that was wi, you know, internet enabled.

Shlomi Ben Atar: You're forgetting one very important platform, which is mobile. Today's mobile capabilities are amazing in gaming, and everyone's going to into gaming. Like Netflix is going into gaming. Apple's going into gaming, like Apple has the Apple arcade. Google, of course, is in gaming. They're in, uh, cloud gaming. Everyone's in gaming. Amazon, they have like their own studio right now. Everyone has a mobile device, and smartphones today are really strong, so a lot of games are starting to, uh, go mobile.

Sean Weisbrot: Call me old fashioned, but I'm used to playing, you know, a super Nintendo, like

Shlomi Ben Atar: yeah, you are old fashioned.

Sean Weisbrot: You are, I have a smartphone, and what do I do with it? I make phone calls. That's what a phone is for you, you call people,

Shlomi Ben Atar: me and my friend, when we're gaming. Okay? Let's say we're playing a war zone. Okay? It's like Pav G, like a, like a, again, 150 people, um, dropping into an island. So we're a squad, like we're four four people, four players, and we're picking up weapons, right? And stuff to use. Against our enemies and the map is huge. It's just so you had a lot of time to run and talk. So we talk about relationships, money, work, usual topics during our game. Because when you go into a game session, it's like another world and you can talk there. It's like therapy. Exactly. When action is starting. Everyone knows that's it. Like even if you had something really important to say or to answer, that's it. Because stuff are about to go down and it's fun. It's like part of the game. You know, you talk, you talk, you talk, but now you're in a battlefield. So you need to like say, oh my God, this guy's behind you. Run with me. Uh, go from here to the left. Look, uh, let's hide, let's do this, let's do that. And the conversation is. Fun because you have like real world stuff and then you have like the gaming stuff and it's all combined to a really great experience.

Sean Weisbrot: I used to play competitively in, in Counterstrike. I used to have a team and we would use, uh, vent Trello and we would use our microphones. We, we didn't know what any of each other looked like, but we knew our voices. We knew our in-game names. We would play competitively in Counterstrike. Uh, we, we used to play in, uh, cyber athletic league.

Shlomi Ben Atar: I play with my friends for two years. We played, um, Fortnite, apex Legends. Now we're in war zone and I never met them.

Sean Weisbrot: I have plenty of friends like that.

Shlomi Ben Atar: One of them died recently. We played for like two years together and we didn't know he had cancer. He never told us. He just recently died and we, like his brother told us and we were like, what? Like we knew this guy. You know, we never met him. I never met some of my friends and I, and they know everything about me. They know where I work or I'm dating some very deep secret 'cause we just. We play and we talk about everything. It's fun. So it's like a whole world. And think about this world during COVID, that's why it, everything got accelerated. Okay? So you need shopping in order to live. And also shopping is a therapy for some people. Okay? And. Also gaming. So there are like two markets which are therapeutic for people. So that's why they were so big during COVID, as you said, like alcohol, um, I don't know, drugs, addictive, uh, substances, all like all sales around those subjects when boom, I, I had gaming. It's way better than drugs.

Sean Weisbrot: It is a drug.

Shlomi Ben Atar: Yeah. But it's not harmful. Like it's not, you know, destroying my life.

Sean Weisbrot: Correct.

Shlomi Ben Atar: I'm really in control of my game.

Sean Weisbrot: It, it does hijack your brain.

Shlomi Ben Atar: It's like reading a book or watching a TV series. What's the difference? There is no difference. Apple just announced on a new, uh, feature, like a FaceTime feature. Okay. Where you can watch a TV show and be on FaceTime during the TV show. Okay. To make everything more social. So what's the difference? I think they got it from gaming. They say, okay, if we can game and be together, why not see a TV show together?

Sean Weisbrot: It's decentralizing the concept of Netflix and Chill before the pandemic. You could get together and watch the show and you know, like if you're, you have a partner or a friend, like you're gonna watch. That show or that movie and you're going to comment on it with each other. Well, you can't see this person now, but you can have a call with them and watch it at the same time on the screen together. So it's like the same thing but not physical.

Shlomi Ben Atar: It's a great feature. Let's say long distance relationships. Couples can watch stuff together. They can play together, they like, I know this couple, they play, I think Apex Legends, they play together. It's great. She lives in Germany. He lives in Israel. It's great. So why not? It's like an added feature, like the tech world is bringing us more features to our lives, so why not embrace it?

Sean Weisbrot: Do you think the expression of these raw emotions during gameplay makes people better people in the real world, or does it make it easier for them to express those emotions again in the real world?

Shlomi Ben Atar: That's a hard question. I heard and I read a lot of, uh, research about, you know, what gaming does to people. People are, they don't have anything to blame, so they blame gaming for violence. I think the opposite. You can have a lot of aggression in games, but then when you believe your life, you have less aggression in you because you just took all of it on the game. So gaming's also like small aggressions going out and then you are way more calm when you go. Out to the world and deal with real life situations. I don't think someone that is shooting someone inside a game will go and shoot someone in real life. Because 99.9% of the people know that it's a game. That's the thing. In a game, you watch Game Thrones, are you gonna cut someone's hat off? No. It's a TV series. It's fantasy.

Sean Weisbrot: What I've come to understand is something similar. We are capable of compartmentalizing that this. Is not reality, and that because it's not reality, we feel free to act on those desires in a way that allows us to make it less likely that we're going to commit crimes against people And. In reality, what we've seen is a decline in crime rates since the advent of gaming. I just wanted to see what you thought.

Shlomi Ben Atar: First of all, I'm a gamer. I, I'm, I'm gaming since I was like eight, and I know what gaming does to me. It excites me, but in a good way, even when I'm angry, like I, I can. Break something. It's like part of the game. It's like I, my ex-girlfriend, she used to said to me, why do you get so mad? Like you woke me up? Or something like that. Of course I was sorry and I paid for that later, but still I told her it's part of the game. It's like when two guys are playing, I don't know, soccer. Or even fifa, like they're gaming, uh, but they're right next to each other. They won't hit each other, but they can yell, they can get excited. They can get up and, and just walk around the room because they're mad, but then they'll be back in the game in the same, like, you're intense.

Sean Weisbrot: I believe firmly that that extends to watching other people. Play sports at a competitive level as well. For example, in America with American football, when someone scores a goal, you know, if it's your team, like, yeah, right? There's this primal, this primal urge to just celebrate over your perceived connection to these strangers. That their success is your pleasure.

Shlomi Ben Atar: Yeah. I'm gonna surprise you. Have you heard of eSports?

Sean Weisbrot: Yeah, of course.

Shlomi Ben Atar: Of course. So basically it's the same with gaming.

Sean Weisbrot: Yeah.

Shlomi Ben Atar: Other people watch gamers like pro gamers doing their thing, and there are plays there that you just. You see that and you don't believe they just did what they did because their response time is so amazing and it's like watching Christiano Ronaldo or Messi doing their thing in soccer, but now it's a gamer doing this thing with Christiano Ronaldo in the game, but he's doing amazing things like how can you control the game in in that level?

Sean Weisbrot: I watch people do this with Minecraft. So there's this guy, uh, I don't know his real name, but his, uh, handle is Dream and he does these videos about manhunt inside of Minecraft. So he started off where like one, one of his friends would try to kill him, and if they killed him once he was dead, that was it. It's over. But if he gets to the end of the game, then he wins. So this whole time he has to devise strategies to evade detection, not get killed and all of that. He can kill the hunter over and over again and the game doesn't end, but the game only ends if he gets to the end or he gets killed and he got like 40 million views. He. Minecraft. And so he said, okay, well let me try again with two hunters, three hunters, four hunters. He just recently did a five hunter every single time, 20, 30, 40, 50 million views per video.

Shlomi Ben Atar: Have you heard of uh, ninja?

Sean Weisbrot: Ninja plays with Dream on Minecraft?

Shlomi Ben Atar: Oh, really? So Ninja, he got famous from Fortnite 'cause he's amazing. He's one of, I think he used to be one of the best in the world because. What he does inside the game is just phenomenal. And you're asking like, how do you do that? Gaming companies, they sell hardware, like headphones. They make millions because gamers wanna be better. And if you wanna be better, you have to have the right keyboard, the right mouse, the right controller or whatever to give you the edge over other people. I see people doing stuff that that are just phenomenal in gaming. If you play a game, I don't know, conscious, right, and you are watching. Another guy or girl doing phenomenal things. It's like really exciting.

Sean Weisbrot: In Counterstrike, the gold standard was like a no scope headshot. With a sniper rifle.

Shlomi Ben Atar: That's hard.

Sean Weisbrot: I remember no scope head shotting people with sniper rifles all the time. Like, I didn't think it was a big deal.

Shlomi Ben Atar: I can see you smiling, like, uh, yeah. The listeners, they, they won't see you, but you're smiling. The reason why you're smiling is because.

Sean Weisbrot: It's hard to do and I could do it.

Shlomi Ben Atar: Yeah. And you remember the excitement. Sure. You felt the excitement. It's even bigger because the games today are so much more complicated. We didn't have this complexity back then. Today you have to pay attention for everything. The sound, like you can hear people walking behind you or upstairs or you know, in the basement, something like that. You need to know where they're come from. You can see shadows of players today. You can see details. You have ray tracing and you have the technology today to see small details. People from afar like between mountains or in forests. You see like this carries running there and you are with a scope, you are with a sniper, and then you get silent and you want to focus to get the shot and there's like trajectory. You see him, but. You won't shoot directly at him because he's very far, so you need to expect his movement and shoot there because there's a, the trajectory of the bullet and when you get. It's exciting. You just, wow, you're shouting to everybody. He's down, he's down, he's down. Everyone what? You know, stuff like that. He's inside a chopper and you snipe him. That's like everyone's screaming.