Suggestions
Ed Chang
COO at Sophon
Ed Chang is the Chief Operating Officer at Sophon Labs, a blockchain company focused on entertainment and consumer-oriented applications.1 He has an extensive background in the tech and gaming industries, with a BS in Computer Science from UCLA.2
Prior to his role at Sophon Labs, Ed held several notable positions:
- Head of Gaming at Ava Labs (December 2021 - Present)2
- Senior Director of Partnerships at Electronic Arts (EA) (July 2017 - December 2021)2
- Entrepreneur in Residence at The Chernin Group (April 2016 - June 2017)2
- Head of Business Development at Streamlabs (April 2015 - February 2016)2
Ed's experience also includes founding Basikz Agency, where he represented content creators and provided gaming brand consulting.2 His career demonstrates a strong focus on gaming, esports, and blockchain technologies, making him well-suited for his role at Sophon Labs, which aims to bring entertaining experiences and a culturally rich ecosystem to consumers in the crypto space.1
Highlights
FaZe Clan, one of the most storied esports teams of all time, is getting acquired at a $16M valuation, down from it’s initial $725M market cap. Can this business be saved?
I won’t rehash low-hanging fruit like SPAC insanity, the unprofitability of esports, or general mismanagement of the company, but FaZe’s problem was that they had massive reach numbers across player socials that were largely unmonetizable.
As the org got bigger, they brought in bigger names (Bronny James, Offset, Nyjah Huston) that contributed to the increasing burn rate but weren’t helping increase ad dollars.
I’d bring FaZe back to first principles - a talent incubator that kingmakes homegrown creators. It’s there for the taking - for all the celebrity star power they’re known for, don’t forget that Banks, Temperrr, Apex, Rain, and Rug all got their start with FaZe.
Offer salary, equity, and mentorship in exchange for representing teamwide sponsor categories and businesses, then use it as a feeder program for a CAA competitor (which FaZe always wanted to be) or crossover parent company initiatives.
There are few that have tried this, and even fewer have succeeded. MrBeast announced a $2M creator program in 2021 but seems to be focusing on larger initiatives now. LOUD, one of the most underrated esports brands in the world, has done this successfully with homegrown talent but is focused on dominating the South America Massive market.
FaZe's comeback story can be defining the future of the esports business model instead of trying to chase the same broken strategy as other teams and projects.
I want web3 gaming to succeed as much as anyone but the incentives between chain and game studios are largely misaligned today.
Game studios need funding to build the product and acquire users, and they want to open the floodgates to onboard hundreds of thousands of (free) players.
From the chain perspective, we need to drive onchain activity (wallets, transactions, volume) but a payoff period in years and a low success rate for games makes it hard to see the ROI on that spend.
So where do we go from here? A couple of thoughts:
𝐅𝐮𝐥𝐥𝐲 𝐨𝐧𝐜𝐡𝐚𝐢𝐧 𝐠𝐚𝐦𝐞𝐬
FOG have been popularized by OGs like Dark Forest and now we're seeing projects like DeFi Kingdoms and Pirate Nations move more and more of their game logic onchain. However, most protocols can't handle the load a game at scale will put on the blockchain, that's where Avalanche comes in with 15+ gaming subnets in the pipeline
𝐌𝐚𝐤𝐞 𝐭𝐡𝐞 𝐜𝐡𝐚𝐢𝐧 𝐝𝐞𝐜𝐢𝐬𝐢𝐨𝐧 𝐥𝐚𝐭𝐞𝐫
In the last bull market, games were choosing chains with no DD based on financial offers. Blockchain is still early enough that there are stark differences between the tech - take your time and DYOR! When possible, raise from traditional methods of capital before locking yourself into a platform that may not suit your needs. Being able to come into a conversation with us with defensible user and growth metrics makes it that much easier to make the case.
𝐂𝐡𝐚𝐢𝐧𝐬 𝐛𝐞𝐜𝐨𝐦𝐞 𝐩𝐮𝐛𝐥𝐢𝐬𝐡𝐞𝐫𝐬
In the analogy that the blockchain is the web3 equivalent of AWS or Stripe, neither of those web2 vendors are investing into projects not provide the support expected of us - as this type of support gets productized, there is an opportunity for blockchains to function similar to traditional game publishers, where in return for providing funding, they receive a rev share on game revenue, which reduces reliance on only recouping through txn fees.
𝐀𝐝𝐝 𝐦𝐨𝐫𝐞 𝐟𝐚𝐮𝐜𝐞𝐭𝐬 𝐚𝐧𝐝 𝐬𝐢𝐧𝐤𝐬
Assuming a range of 0.3-6% monetization of F2P players and the only blockchain elements being NFT in-game items, even on the high end, you'd need to have 16MM+ MAU to achieve 1MM monthly active wallets in your game. Adding on other innovative features (onchain currency, wagering, UGC) can unlock even more engagement.
Working on something cool? Get in touch, we'd love to hear about it!
