Video Transcript
now what up friendos welcome back we’re talking about metaverses today everyone’s favorite we’re talking about star Atlas they’ve just laid off 73 of their team uh over 100 people I do believe 122 people and they’re left down to 45. now if you don’t know what star Atlas is I’ve covered it on one of my maybe both of my channels now uh quite a few times mostly looking at what I believe to be just a clone of Star Citizen only worse and on the blockchain uh Star Citizen kind of was already the first nft game without even really knowing it I think if star Star Citizen release nowadays they probably would have been on blockchain because what better way to earn money than to sell people pictures of spaceships for even more money than Star Citizen currently does which is essentially what star Atlas does they say you know buy these spaceships and one day they’ll exist in a game and it’ll be the ultimate metaverse play to win uh pay pay to win well is definitely pay to win but uh play to earn all these crazy buzzwords that anyone with the brain knows doesn’t really work like in an MMORPG or a persistent world at all Gamers don’t want to speculators do and as we’ve been proven time and time again right in saying speculators care until the product comes out and then it’s not good it doesn’t get adopted and then people stop speculating and it goes to zero because the games are worse for this type of monetization than than they possibly could be if they were made normally but companies like this like Star Atlas according to an interview the other day uh what I was listening to with Michael Wagner which is the CEO here stood giving these nice little speech they’ve raised 200 million dollars in Revenue apparently and obviously the majority of that money would have been raised in the bull market as you can hear here um this is how much money the game raised here you know the fact that we’ve done 200 million dollars in Revenue through time is so they’ve done 200 million dollars in revenue and obviously the majority of this was done during the the bull market of cryptocurrency right when everything was going crazy and these companies were valued an incredibly stupid amounts because everyone was basically dumping money into a market because they thought line only goes up but then line goes down and loads of people go bankrupt and they lose loads of money uh because they you know the line can go both ways or it can stay in the middle so essentially they raised within a very short period of time 200 million dollars for something that nobody is going to be playing for a really long time is an actual product and they did so by selling nfts and cryptocurrency tokens and the transaction fees and things like that their first stuff that again doesn’t exist people will say oh no Kiri you don’t understand cryptocurrency it does exist because you own the asset but the game doesn’t exist so the asset does nothing it has no value other than speculating on whether it will one day so there’s some confusing things here before we get on to laying off 73 of their team which obviously doesn’t bode well for anybody if you’re a fan of this game or well it’s not a game but what it could potentially be this is obviously really bad news news and obviously it’s been spun a little bit to be not quite as bad but what I’m confused about is that star Atlas came out last year we’ll all remember in 2022 the FTX one of the biggest frauds on the planet allegedly according to the US government uh basically was running a big old scheme taking tens of billions of dollars of people’s money misappropriating it using it in whatever means they wanted to and then uh went bankrupt lost it all you know just lost all that money sag times and basically star ratlers decided in in you know Wagner’s Infinite Wisdom he thought what would be a good idea I know we’ll put our money that we don’t need to that these people gave us for this product into FTX and then FTX goes bankrupt and they lose their money he said quote they had a material cash exposure and that his trust had been betrayed by FTX the company did not say how much cash get lost in the collapse so he said based on what they lost while previously we had multiple years of Runway given current operations ahead of us that has presently been reduced by approximately one half now according to eventual news that came out basically he was he was quoted in a lot of these articles as saying they lost 16 million dollars in FTX which doesn’t sound like it makes a lot of sense to me if you’ve done 200 million revenue and you lost 16 mil that shouldn’t reduce your your development Runway by half uh doesn’t make a ton of sense especially considering that they later said that after the you know they lost this 16 million dollars they claimed back 50 by selling the debt to to somebody essentially uh because obviously the bankruptcy proceedings so that would mean they lost 8 million dollars and that is apparently cut down their game uh Runway by half financials don’t make a ton of sense there but maybe there’s something here I’m missing but here we go let’s talk about the layoffs so nothing about our vision has changed uh other than the fact that it’s [ __ ] pretty far away Vision now in an exclusive interview uh the co-founder and CEO Michael Wagner told decrypted the move was necessary to preserve the Project’s long-term goals we did have to lay off about 122 people from our team so there’s a sizable reduction in the labor force yeah you could say sizable most people would say the majority unfortunately ATM ta cut its team to 45 total people down from a recent total of 167 and slashed from the 2022 peak of 235 so basically they’ve lost like 190 employees uh since they lost this money from 235 down to 45 at present they told the Crypt that the total includes contractors and employees from partner Studios that were tapped to co-develop the game saying that they’ve essentially been full-time team members so what they say is this is to accommodate a long Runway now you’ll hear this a lot in business people love saying to talking about runways essentially what they mean is you’re in a plane uh you Runway needs to be long enough otherwise you can’t take off because you’ll go fast and then you’ll run out of Runway and then you’ll blow up and everyone will die but obviously there’s a couple different ways to look at this if you’ve already scaled up your company to have a whole bunch of people that means your Runway will be one size but you’ll be going faster so you might take off faster when you downsize your team after you’ve had a bunch of people that’s going to be incredibly inefficient which means you’re going to be wasting more time plus you’ll be going slower so while the runway might be longer there’s a good chance you might still reach the end run out of Runway you’re essentially trading speed for just a longer duration so what you’re doing here is just hoping hoping to God that you just raise more money now let me just say if you’re a company that’s done 200 million dollars in Revenue in in basically two years nobody wants to be hearing that we’ve had to fire almost everybody because if we don’t we’re just not going to make it he’s also been quoted in this video as saying that the Unreal Engine game the big old metaverse that everybody bought into and everybody wants is probably 400 plus million dollars to be created which which means that essentially with their 200 million dollars done in revenue and having to fire these people they’re going to have to have to raise multiple hundreds of millions of dollars additionally to ever get to that point so what he’s saying is we are essentially gonna have to focus on making money instead of making the main product otherwise we will never be able to make the main product not a position anybody ever wants to be telling you that they’re in so essentially what he said is they’ve determined Key Personnel that will be that will enable us to achieve our long-term vision and still build build a variety of product lines that we have in development he also acknowledged that downsizing could impact game development yeah I’d say so particularly when it comes to building out the robust full sized version of the game using Unreal Engine epic games industry standard toolkit for AAA games the biggest impact is probably to our Flagship product line the Unreal Engine team that is where we saw major reductions in our co-creation studio engagements so yeah essentially they’re going to be focusing on the [ __ ] that nobody really wants and if they don’t raise enough money the [ __ ] that people did want it’s just not gonna happen is it like the writings on the wall here cryptocurrency is gonna have to go crazy for them to raise enough money now to be able to do almost anything so while we make money every single month we did not make enough money to cover the expenses of a triple A team that’s a multi-million dollar monthly run rate so we’re scaling down the team to a more sustainable rate to get those products out specifically focusing on the economy activation AKA activate my economy because if you don’t we going bye bye your nifties your pictures are going to be [ __ ] worthless so while ATM ta is scaling back its staff Wagner said the team is forging ahead and plans to rebuild its Unreal Engine team in time yeah if you make way more money just real loads of money otherwise you can’t otherwise you wouldn’t have had to scale back so essentially you’re gonna have to make a ton more money to do this the long-term Target hasn’t changed in other words but the star Atlas team is Shifting Gears with a difficult crypto market and financial setbacks of your own creation we’re not stopping on real engine development he said nothing about our vision has changed we’re only re-prioritizing our efforts on those things that are more immediately repeatable and we’re leveraging that as a way to grow the user base and generate Revenue in a more substantial amount imagine a company telling you like two years after we’ve done 200 million dollars in Revenue uh we just need to generate Revenue in a more substantial amount not even Star Citizen would be so [ __ ] Brazen to say that so I’m not helping matters is the 16 million dollars that they lost when FTX collapsed in November at the time Wagner said that the startup had lost about half of its funds which became inaccessible when FDX closed withdrawals we had 16 million on the exchange that was lost now he said but they recovered a fairly substantial portion the funds lost by some Goods claimed to a distressed investment fund he said the amount reclaimed in the sale was less than 50 of the amount held at FTX so yeah this is the part that doesn’t make a whole bunch of sense to me but who knows you know maybe I’m totally you know just seeing crazy things on this one so despite the hardships Wagner is optimistic about the future and building games on the salon and blockchain I’m also very optimistic after I’ve you know lost a bunch of money and fired 127 staff and now we only have 45. I can’t imagine how anyone in the community could wouldn’t be optimistic about this because clearly this is a real good change if things weren’t going good before I mean they certainly are now so we’ve been and continue to be extremely supportive of Solana and The Innovation there uh I generally believe the work that we’re doing building on on chain gaming logic is only possible on a network like Solana so they only launched in January 2021 so it’s been like two and a half years and they did 200 million dollars in revenue and they’re already having to lay so many people off crazy we didn’t have one dollar we had a white paper in a dream he said we were able to generate hundreds of millions of dollars off of that Vision even with hundreds of millions of dollars that was never enough to get us to the completion of star Atlas mate I’d be [ __ ] raging if I if I heard the person who I trusted with this is an investment by the way I don’t care what anybody tells here when people say oh I bought a Kickstarter pledge for a video game and I invested in it no you didn’t this is an investment people put money into this uh with the idea that it’s gonna go go up in value as the product develops and matures and later on they would probably be able to sell it for a whole bunch of money or at least take advantage of it in an economy where they own the thing and and anytime that they can get out and probably make more than they put in but to be told within you know two and a half years after putting after hundreds of millions of dollars going through it the it’s this bad man I’d be [ __ ] raging there would be no way you could spin this one in my brain if you were saying that the game should cost 400 and something million dollars to create the entire Vision obviously if you’ve raised 200 million dollars you should at least be able to get like a Star Citizen equivalent Alpha row I mean star citizens are a 600 mil and they’re still going a decade later 10 years so let’s math this out a little bit 600 mil 10 years you’ve been going two and a half years 200 mil and you’ve already fired the vast majority of your team meaning it it’s going to be even slower for not making a ton of [ __ ] sense to me so I don’t think people should be surprised that we are scaling down in the current environment when the reality was that we always needed to generate Revenue you did 200 mil that was the only way this ever gets accomplished and we’re still very much in that model nothing’s changed there so there you go uh that’s star ratlas if you want to see what kind of state the game is you can they’ve got this you can fly around on similar race courses and and shoot some things they have obviously released some stuff on the epic game store like a showroom or something where you can walk around and you know uh look at ships and things but obviously I’m completely out on stuff like this I’ll never buy anything related to any any of these you know web 3 games or whatever because realistically I don’t even think the model works I don’t believe in the model I think even the messaging behind things like play to earn is fundamentally flawed and come up with by people who don’t understand why or how Gamers play games in the first place but obviously I don’t want people to lose all their money and it looks like this is one that may be the case later on I don’t think they’re going to manage to raise you know the 400 mil that they’re going to need to get this over the Finish Line uh especially considering now they have so few people 45 people to make the best game ever you know built on technology that isn’t mainstream in gaming and hasn’t really been done before to make the metaverse the all this all-encompassing thing that this word is supposed to represent to make the the greatest biggest MMORPG ever yeah uh not for me man never for my money but maybe maybe they’ll prove me wrong only time does for the people that are going to show up and I’m sure this guy will see the video and say he doesn’t know what he’s talking about and blah blah blah time will prove everybody right or wrong uh so all you’ve got to do to shut me up and prove me wrong it is very simple just make the product and when it comes out it’ll be amazing everyone will say ah Kyrie you’ve got a gun you face there for you know having common sense but realistically if you do achieve this uh it was in the face of overwhelming odds so I guess good luck uh and sorry for all the people that obviously are going to be disappointed by stuff like this but you’re probably not watching the video anyway and if you are you’re probably angry already then left 10 minutes ago but there we go uh links in video description Discord uh Twitter uh patreon if you want to give me some money and uh yeah see you next time I guess oh twitch as well peace
Star Atlas, a game that involves crypto-assets and NFTs, is the topic of this video. The company behind it recently laid off 73 out of their 122 personnel, leaving only 45 team members behind. Despite raising $200 million in revenue, the presenter believes the game to be a less impressive clone of Star Citizen, a game that sells virtual spaceships for real money. The expectation with Star Atlas is that you buy these ships and eventually they will appear in an online universe that still doesn’t exist.
The revenue generated was largely due to the bull market of cryptocurrency. The creators of the game hoped that the value would only increase, but this was not the case. This tends to happen with these types of assets, speculators are interested until the product is released, and if it is not adopted or doesn’t perform well its value drops rapidly, often to zero.
Star Atlas’ CEO, Michael Wagner, discussed in an interview about their reduction in labor force, explaining how it was a necessary move to preserve the long-term goals of the project. He mentioned the big hit was to their Unreal Engine team which was in charge of creating the game’s universe. However, due to the high cost of running a team of this magnitude, they were forced to scale back.
The company was facing financial difficulties for a while, notably when they lost $16 million during the collapse of FTX. FTX was a platform where they had stored a substantial amount of their capital, having decided to invest their money in FTX which ended up collapsing and resulted in the loss of funds.
The CEO acknowledged the scale-down would impact the games development, particularly with the full version of the Unreal Engine game, but committed that they would rebuild the team if they could generate more funds, and explained they were refocusing on immediate revenue generating projects to grow their user base.
Further confusion arose when the loss of $16 million was said to cut their development runway by half, which seems unlikely given they had generated $200 million in revenue. There were claims that after losing this money, they claimed back $50 million by selling the assets tied up in the bankrupt FTX, meaning essentially they lost $8 million.
Overall, the presenter is skeptical about the future of Star Atlas, citing unrealistic expectations and mismanagement of funds. Despite the CEO’s optimism, the $200 million in revenue and the layoff of the majority of the team has raised concerns about the viability of the project. The CEO stated that the project’s long-term target didn’t change, expressing hope the game would continue. Despite all of this, the presenter believes the reality paints a different picture, as the company’s plan relies on crypto markets picking up substantially, which is highly unpredictable.