Join us for this newest episode of the Licensing in Games podcast. This month we are joined by Rebecca Danta, head of partnerships at Onchain Studios. Onchains new venture, Cryptoys, is an NFT native digital toy company that has found success licensing IP from Mattel. In this episode, we dive deeper into exactly how Cryptoys landed Mattel and what other studios can learn from their exciting story.
Welcome to Layers Licensing in Games Podcast. I’m Mitch and this is Rachit. And today we’re pleased to be joined by Rebecca Donta from Onchange Studios, based in Miami. Rebecca has been head of partnerships at Onchange for about seven months after previously being Managing Director at Miami Angels, which is an early stage investment fund for Angel Investors. Onchange Studios launched their flagship product last year, which is cryptos. And cryptos is an NFT native digital platform crafting fully interactive collectibles, play your own games and next level interactive experiences. Welcome, Rebecca. And hopefully I’ve got the description of cryptos right.
You did. I like to simplify it for people to by just saying, “We’re a digital toy company.” With that said, it’s great to be here.
That’s a great description, much easier than the mouthful. I just used.
So tell us about cryptos. It’s one of the most unique projects in the web three and NFT space. So maybe if you could just start by telling us how did it start? How’s it going? And then also, maybe if you could explain how it differs from some of the other NFT projects that people might be familiar with?
Yeah, so actually, I think something that was make it so unique is the way that it came to be. So we have five co-founders at this company, and three of the five had built another company before. They had sold it. They were working at the company that acquired them. And Will, our CEO likes to say, how one day he was upstairs in his office working and he hears his daughter yell from the playroom, “Dad, I got an ultra-grill.” And he’s like, “What?” And he goes down. And then if you have kids, you may have heard of LOL Surprise Dolls. Like the biggest, the hottest toy trend in the toy industry. So he says that she’d like, “[Unclear]. Oh my gosh, you get the ultra-grill.” And about five minutes later, she throws it in the toilet. And he’s like, “I spent over $1,000 on these things, and you’re not even playing with them.” So he says that, around then was when crypto kitties came out. This was back in 2017. So he started seeing how like you can fuse the two. So like a really cool unboxing experience and appeal. But a toy that’s actually fun to play with. And one then you can actually own as well. The trend nowadays is if any of us are around young kids today, we see how a lot of their play patterns are playing with other kids like video games, like Roblox. And then they constantly want digital money to spend in these games. We said, “What if we create something where they can actually own the product, unlike the digital game state,” that is how cryptos came to be and we did launch in 2021. But we actually just made or just dropped our first wave of characters in November. And we really took the time to do it. And again, that’s because we’re working on another NFT project. We weren’t just trying to ride the wave in the craze of 2021. We could have just thrown something out quickly last year, but we didn’t want to do that. This is a generational company. And going back to our founding story, we’ll jokes around that his goal is that his daughter, one day become CEO.
That’s super cool. I’d love to understand that more. I’d like just to help understand like that, that space or that divide, I guess which people might have in their heads, right? It’s like, it’s web three kind of NFT spaces often a little bit older, a bit more kind of like tech focused. And I guess the toy space people, generally think of as little younger, right? So, what does that look like? And how do you actually go through that process? Like firstly, getting the right people into this space, but also like who are the right people? What’s your audience look like? Who are the people that are interested in cryptos? Where are they based? What kind of ages? Wat’s that, in general?
Yeah, so cryptos is a whole family entertainment platform. So it’s very much for adults and kids, in a similar way that like, we as adults love watching Disney movies. And of course, so to our kids. There’s some platforms that are very much kid focused, like as an adult, you could never watch it or enjoy watching it. The idea is that cryptos is for all ages. And there’s a few things in our product, like the fact that our video games are going to be minigames and if you look at the age demographic of minigame play across the globe. It’s really all ages, kids play, and so do adults. So that’s why we’re going to route with video games. But then, our first job with Mattel, our first licensing partner is Masters of the Universe, and Masters of the Universe is a very nostalgic IP. And we went with that one first because our group today are adults, where we’re going through everything to be compliant for children. So we actually don’t allow kids anymore platform yet. But the idea is that we have these IPs that adults loved as when they were kids. And then they can get to show it to their children. And it’s been just so fun to see the unboxing experiences. And like the parents just bringing their kids to like, come sit with me and look that T-man and getting to show them that and kids learning about Master of the Universe for the first time.
Yeah, I think that’s one of the coolest things about cryptos when I first came across you guys is like the fact that it does kind of transcend generations. It’s not like Cocomelon where it’s like a two year old can enjoy it. But mom and dad probably find that quite annoying.
Exactly, t what I was thinking about, that one.
Yeah, you’re not gonna have any like JJ drops in cryptos, baby JJ.
Yeah, one day.
You touch a little bit there you did your first branded NFT drop. Recently with Master of the Universe so users can purchase. He-man, She-Ra, all these really awesome nostalgia by piece. So I think you kind of touched on it then why did you start with Masters of the Universe? What made you want to go with that IP as your first NFT drop?
Yeah, so Mattel is a huge household name brand [Unclear]. And we decided to go for that one exactly for the reason I mentioned before. While we can’t have kids on our platform, we’re really going with these nostalgic stories. Because it’s bringing in the adults, our ideas is that adult become crypto fans and user, and then they bring their kids into it as well once we’re ready, [Unclear].
What was that experience like working with Mattel? It’s such a huge brand. It’s a pretty big project for the first partnership. What was that experience like?
Yeah, I mean, I think part of the reason Mattel is one of the biggest toy companies in the world is because they’re not afraid of innovation. We knew from the very beginning that they were the right partner for us, because they really wanted to lean in for that. They said, we were not gonna like worry our heads, we see the way play patterns are changing in younger generations. And they thought we were the perfect partner for that. So because that’s the way they are, they’re the perfect partner for us. And they wonderful to work with, and a huge support, really excited about what they’re doing. And they give us a lot of creative freedom.
It seems that like, someone like Mattel, or I guess any licensed IP fits almost perfectly into to cryptos. Was that always in mind that you wanted to work with beloved brands or characters or other entertainment properties? And, why is that important? And like, how is that important for you versus creating your own set or your own, I guess, line of characters IP?
The question is how we choose licensing?
It’s more like, is that space, important to overall and has that always been a fundamental part of Cryptos? In that working with external partners is the key to kind of how you do this, or would you consider doing this yourself and without those external partners as well?
Okay. Understood. Yes. So that is a major key to our platform is [Unclear] household name IP. So it’s our idea that it’s a new way for fans to interact with brands that they love on our platform. And we have our own original IP as well, though, I think that was your second question, like why not [your own]? Well, we are. That’s why also it’s really important that any partner is wanting to come into the crypto verse. Because it’s not a world where creating only for partner where cryptos doesn’t exist. It’s all about mixing that together. In the same way that kids mix different. They mix Captain America and Barbie in the real world as well, they don’t think about that. Well, we’re trying to create the first environment that exists in the digital world that truly mimics physical play and takes it to the next level, because it’s something that you can truly [Unclear].
So I guess, brands are pretty important for what you do, then. Your experience working with brands is quite different from other game developers we’ve spoken to on this podcast where they’re often working with an IP, creating a game from scratch, and I guess, you’re creating an NFT from scratch as well, entirely different, but you’re integrating up more IP consistently into an existing universe. So what’s your approach been to, with networking, a pipeline of brands that you think are a good fit for the cryptoy verse? How do you decide who to go off? How often are you going after those brands? Is there kind of a roadmap for brands you want to bring in? And then how do you reach them and actually get the deal done?
Yeah, so things that qualified brands that we’d want to go after, so they need to be a household name, household names have a magnetic pull, their fans are very active fans, right? That’ll go wherever that brand goes. And thus, grow the crypto verse as well. So, that’s one of it. And then the second thing is that needs to be a family friendly brand. So we can’t have adult only, it needs to be kid approved content as well. And kids [Unclear], that’s really important for us. And to your earlier question you asked about like, “Oh, people think crypto and kids,” there’s kind of that idea out there today. Because IP that exists. The web three IP that exists is not kid friendly. But there’s no reason that crypto should be something that’s scary for kids. So we’re trying to be the first to market to really change that, and have a safe environment. And having that safe environment means really where parents can come in and control it, it’s not going to be wild west where kids are coming in and do anything they want on our platform unsupervised. We’re working with the best partners in the business to have a really safe environment and fun environment for kids. One, in our mission statement, we say part of cryptos and Onchange studios, our parent company is, not only to educate, but to entertain. So everything has to be fun. And that’s partly why we took so long to launch. If you look at our unboxing experience, like it’s like a feast for all the senses. And that type of product that quality into it, like, our team is amazing. That takes time. So when you ask about our roadmap for partners, and all of that, like I said, I shared like some of the qualifiers. But at the same time, we want to build everything with the highest possible quality. So we’re not necessarily going after quantity and wanting to work with everyone right now. We want to work with some big name partners. Luckily, we have a ton of interest and we’re selecting the ones that are the right ones first, and making sure that we can put the time to create an incredible product for the fans, we’re building for fans, because fans [Unclear].
Have you got any criteria that others can learn from that? I mean, I know you mentioned obviously, in your space, family friendly is important. A larger brand in general is important. But are there like specific criteria that you kind of, like weigh things up with or, even figure out, “This is how many fans they have and we think we’ll be able to launch in a certain way or this will be worth that license, because we know we can attract a large enough, player base,” like any kind of main criteria that you’re always thinking of that, anyone else could learn from it as well in the, I guess, the game space?
So we have our internal product roadmap. And while I can’t share all the details there, one state kind of met those qualifiers, we look at timing. So by second half of next year, what are going to be the capabilities on our platform in which IP into that really well. That’s what we look at.
Yeah, that makes a lot of sense. And I think it could even tie to other games. It’s like, “What are we releasing,” like whether it’s not... It might not be a capability, but it might be like, “Hey, what’s that game or world going to look like? What actually ties in via narrative or thematics were like that it actually makes sense to bring it there.” So it’s really cool. Thank you.
Yeah, and we have crawl-walk-run approach to everything you do with partners. So there’s different layers that we’re building over time as we’re [Unclear].
Yeah, I think that’s interesting, crawl-walk-run. How do you, without giving away any of the kind of secret sauce of anything you shouldn’t speak about publicly, how do you approach that from a brand specifically? Because I think we hear that all the time with what we do. It’s like, how do we actually evaluate the IP and make sure that it’s going to be a good fit, without investing too much and taking on all that risk? So how do you approach that?
Well, we do extensive research, I say that because it’s actually really fun, like, well, if it’s a movie, we’ll watch it. If it’s a cartoon, we look at it and what’s fans are saying about it? It’s a lot of that, and then it’s talking to the partner, making sure they understand what the crypto verse is like and what we’re aiming to do, not just today, but in three, five years from now and more, and making sure that they are on board with that.
You said, you’d have a lot of partners to reach out to you. So you get a lot of inbound, which I guess is kind of unique in the sense that a lot of developers we speak to are often going out and pitching IP to bring their IP into their game. So if you could talk about a little bit about how you actually like reach brands and get the deal done, I think that will be helpful for any developers in this thing as well.
Yeah, so I don’t know if you consider it large or small. But first startup, we’re 56 employees, but we don’t say, it’s pretty big. So we raised two rounds of venture capital, I’d say we’re fortunate to have really good investors. And I think that’s given crypto is a [Unclear] in space, but introductions from our investors. And also, it’s just like really helped grown our network and our [Unclear]. So between our network that we have at cryptos, we often get warm introductions from partners that we want to go after. And I think that if you can get a warm introduction, like with [nanny sector], it goes so much further.
Yeah. So the key lesson there is raise more money and get lots of warm intros and you will be fine.
[Unclear]. But to your point, it’s like, if you have the opportunity, think about [Unclear], you’re not in a situation where you can choose. But I worked in venture capital before this and now being on the operating side. I absolutely see the difference and the benefit of [Unclear] investors.
Absolutely. And last question, I guess around the kind of like volume of integrations that you wants to do NFT drops? How do you manage that internally across different teams? I know for a startup, 56 employee, you’ve gotten the benefit of some resources there. But I think one of the challenges for any developer when you’re bringing IP into an existing world, whether it’s a game, whether it’s Metaverse, whatever it is, is like how do you manage that across teams, you’ve got the partnerships, or the biz dev team, yourself going out and doing these deals, then you’ve got the product team, then you’ve got the exec team who wants one thing, you got engineers who say, “We can or can’t do this,” like what’s your approach to managing all of that internally?
Communicate ahead of time. Partnerships is a really cool role and partnership in all organizations is different, but here are mainly focused on license partnerships. So I do work across a ton of teams. So for companies who are listening that [Unclear], I’m like, make sure that, that role is really the glue that’s tying all the teams together and any hires on that team are great communicators. People need to know what time you need to get sign off from different employees. Yeah, communication.
I’d love to switch gears a little bit and understand your thoughts or get your thoughts around like maybe even on the brand side or the other side and how they see this space? I think a lot of people have seen both in web three, but also other kind of more open world platforms or environments like sandbox or Roblox even, that, there are people working with brands and IP, and I think you’re signed to do you’re doing the same in a really cool way. What do you think drives the trend? And do you think the trend is here to stay? And what are you hearing from the other side? I guess, like, what’s the feedback that you’re kind of hearing around that how they’re thinking about the market going forward?
Yeah, so the question is like, will our brands still continuing to move forward even in the bear market?
Well, yeah, that too, and how do you think they actually approach this whole space of like, whether that’s NFT’s or whether that’s the games and kind of Metaverse, like Roblox as well, which are not necessarily kind of as impacted by say, like a crypto bear market?
Yeah. So I think overall brands probably see licensing opportunities as a way for them to test some like web three, NFT integrations and initiatives and see how their own audience is reacting to it and whatnot, it’s like a relatively safe and risk free way for them to enter. So shows that they’re still being relevant without kind of switching their overall, like deviating from their company strategy. So I think a lot of brands are really interested in licensing opportunities because of that. As far as what brands are saying, lately, like I always say, I’m very bullish on web three. And that’s because I get to interact regularly with some of the biggest brands, and they are not fazed by the crypto venture. I think they very much see this as a long term play. We’ve been through multiple crypto venture, this is another one.
Yeah, do you have any advice for web three developers that, I guess, sometimes we hear from some brands or licensors, whether they’re not hesitant, but they’re just kind of, they’re putting things, they’re turning the heat to low, they’re really assessing opportunities and want to make the right moves, which I think is important. What do you think is important for our web three developers, especially when they’re pitching a brand or an IP to be successful in landing that deal, like getting them to understand, this new thing that they might be making?
So I say, like, I’m bullish, brands aren’t stopping, but you also have to be aware of the market that we’re in. So, it’s not necessarily realistic that you’re gonna sell a $200 PFP and 100k collection and sell it out. That’s just not happening in this market. So you do need to make those adjustments. So I would say that, that’s my biggest advice, like, raise capital, have runway, hire smart, be fiscally responsible. Because we don’t know how long we’re going to be in here. But there’s still capital out there. Good companies are still getting funded.
Yeah, cool. Totally. It’s still a huge market, in the market. But while it’s early, like the growth, there’s still a lot of growth potential there. And we’re still very, very early in terms of adoption. So if you can really blend and kind of plant that flag early, I think there’s a strong opportunity to make the most of something that, is only going to have more and more users likely to come in.
Yeah. And there was so much fluff in the market, like, everything that just... That’s happened over the last few weeks hasn’t been great for. But I also think, one, there’s so much fluff and froth. It’s not good, either. So I think like some of that has been cleared out. And the people who are still here are the ones who are serious about it, who are building. And hopefully that can help [Unclear] crypto, and web three reputation.
Yeah, totally. I think all the random, like Shell projects are kind of drying up, which is really good for the market, and especially, how it matures. And you’ve got real builders and real kind of projects where they’re building really cool experiences that actually take advantage of the space and the tech. So yeah, very much agreed with you. And we’re seeing that as well. So really cool to hear that.
Yeah. And I think NFT’s are maturing as well, like we’re seeing called Digital Collectible. You’ve probably heard how people say, like, when you’re talking about a web page, we don’t say like, the HTTPS protocol. It’s really similar before it was almost like the cool thing was that, it was an NFT. And yeah, how, partly because of the market we’re in and people aren’t just spending whatever. It’s not just, “Oh, I bought an NFT, who cares what it is.” It’s there. What’s the value? It’s good that it’s being looked at more with a critical eye, I think. And while our name is cryptos I think we think of ourselves probably less as an NFT company, certainly, not NFT project than one would think. Because to us, we’re building digital toys. Then, web three, and the blockchain is what enables ownership, what that’s like a secondary kind of side thing. We’re trying to build an amazing universe environment that is just fun to play with. And to us success is that people come on our platform, and they’re not so much focused on, “I bought an NFT, or what’s this worth or whatnot.” It’s just, “I love this toy, and I own it, and I get to look at it, I get to play with it.” That’s...
I think that’s really smart. It changes the focus of everything from being for speculative, like technology investor to the actual, like, fan, or the player who doesn’t care about that probably. It’s like, what’s the experience we can build here? And I think that’s a really good reminder to everyone in this space, especially when they’re working with brands that IP, it has to be for the vendor, it has to be for the audience. If it doesn’t make sense. And it’s just because the technology, is unlikely to be the best application of that kind of existing audience they’re trying to tap into. So that’s really cool.
Particularly as it comes to brands and IP, like they see this is a very much a long term play. There’s almost like some parallels there to the.com boom of the early 2000s, where there was like a lot of fluff and a lot of like, not valuable projects. And I think like this kind of helps shake out some of those. But do you think for both sides of the [Unclear], for web three developers, also for the IP side, is there kind of a first mover advantage here for getting brands into games, or if you want to be a successful web three project, to kind of get in the space and be in it for the long haul?
Yeah. And I think like, look at the NBA and [Top Shot] they get credit for what they did there. And the NBA is really seen as kind of like an innovator in the space they’ve done thing well. So I think there is something to be said for that, and Dapper Labs and Top Shot as well. [Unclear]. Because we’re building off flow, so yeah.
I guess like we’d love to get final closing thoughts around the space in general. Because, yeah, we’ve seen these kinds of interesting projects that people do not... Crypto is definitely one of them. But as you mentioned, early on in the piece, it was also Dapper Labs, Top Shot, like that kind of stuff. What do you think is next in terms of like, where this industry is going on both sides, for web three and NFT’s and blockchain, in general? As you said, the technology matters less. But I think, I’m curious to understand, like, how do you think brands and IP and licenses and pop culture will evolve and interact in this space over the coming years?
Yeah. where it’s going and this one comment I’ll make it goes back to something that Mitch just mentioned, but like the whole cash grab, behind it is like there’s been a few license or handful of licensed partnerships that haven’t gone well, because they were perceived as cash grab. [Unclear]. That’s something else that we look for with partners. We want to see like, are they also going to be marketing this? Or is it just their IP and they’re kind of in the [Unclear] one? And what does that say to their fan base, if they’re not willing to publicly come out and talk about this product? So that’s something that we absolutely look for in partners. And then I think that’s important, just for the brand and IP side, and [I have seen] brands get flack to or being seen as a cash grab, when they’re just not in sync with the market. So right now, for example, market creator fees, the trend is that they’re being lowered. So when it comes to artists, that’s not a great thing, but when it comes to like IP, in some cases, like [Unclear] brand, they’re getting in trouble for slapping on like really big [Unclear]. So I think like brands should just... They need to have a pulse on the market and be proud okay of how those type of things are going to be received. But as to where things are going. I think user experience I think a lot of before kind of heads down building because they’re not so much shipping product right now and probably I think that this next wave, we’re gonna see way better user experience overall in web three. And then I think one of the bigger things too, is what we talked about earlier that we’re going to see a shift away from NFT, NFT, more toward digital collectible and what you can do with it. I think people now are sitting there and waiting, “I spent all this money on a static image.” And people aren’t gonna want to do that the second time around.
Yeah, totally, it’ll be really interesting to see, I guess, the evolution of utility, right? A lot of these, as you just said, like a static image, what kind of speculative bets on like, that thing will do something, or will grant me utility in the future in some way. And, in some cases that hasn’t transpired. And I think, these products like cryptos where you’re kind of running, I guess, with the point of the experience, and then kind of what you’re building from day one being really important, I think you’ve got a, you have a much better chance of the fan or the purchaser actually getting a real value out of it, and really being happy with their purchase as well. And then you get ecosystems, which can facilitate more sale and kind of, transactions between them as well. So really, really cool.
And I almost like avoid that word, because it’s such a buzzword, right? What’s the utility or we need to focus on utility. It’s like the fact that even asking that shows itself that how much an empty projects are.
I think people also forget entertainment is a form of, like, is a utility as well. If you can get people in and they enjoy it, they play that, that’s cool. That is utility as well, it doesn’t always have to be, I guess the most utilitarian form of the word utility of like trying to achieve a greater goal and it can be the way you spend your time and that you enjoy spending time in the same way that you do with toys. So that makes sense.
What are your plans for working with brands and IP moving forward? I mean, you’ve made it quite clear today that it’s like a huge key part of your strategy. So is there anything you can tell us about that’s coming up? Or is it all kind of hush, hush at the moment?
Well, Mattel represents a lot of brands so we have some exciting stuff in the works there. And we’re really finalizing our 2023 and 2024 roadmap. And I say that like as a startup, I feel so fortunate that we have enough interest where we can kind of plan out over the next two years. But yeah, that’s where we’re at. And when I say roadmap, I mean like, from partner.
Alright, look forward to it. Amazing. Well, can’t wait to see what you do next. I’m really grateful you’re able to come on today. Some really interesting insights into the web three space and digital collectibles. We won’t call them NFT’s anymore. So yeah, thanks for coming up, Rebecca.
Thanks for having me. It was really fun to talk about all things licensing and what they’re [Unclear].