Rahul Sood is the co-founder of esports and video games betting platform Unikrn, sold to giant gambling operator Entain earlier this year. He started the first incubation fund for Startups at Microsoft, the Bing Fund, which became Microsoft Ventures, led by Sood until 2014, when he created Unikrn. He is also an investor in blockchain-based play-to-earn horse racing game ZED RUN.
Sood has recently made the headlines again as he announced his return to gaming with a new startup called Irreverent Labs. The Seattle-based company, which has already raised $5 million, is working on a new play-to-earn game featuring AI characters living on the blockchain as NFTs. Yogonet talked with Sood to learn from him the reasons behind Unikrn’s sale, the gambling opportunities that are opening up from his new projects, his own view of the esports betting landscape and why he thinks land-based operators are behind the curve on gaming.
Could you walk us through the essentials of Irreverent Labs in terms of its condition as a metaverse, play-to-earn game, and the uses of blockchain, AI and NFT for trading components? Which will be the differential factors of this new project, and its competitive advantages in the fast-growing iGaming market?
Irreverent Labs is building a fun fighting game with rich, hilarious lore, and really engaging & cinematic gameplay. It’s built in a 3D metaverse, on blockchain, with an NFT asset system, underpinned by a sophisticated economy, and lifelike AI using cutting-edge technology and realistic biology simulations. Yeah it all sounds crazy, but we’re doing it and making significant progress. My partner and I brought together people that we’ve worked with in the past throughout our careers. Many of us have spent years in very rigid, established industries. Before I worked in wagering, I spent most of my career in gaming and entertainment.
For me, Irreverent Labs is a chance to go out and be creative again, making something completely unique that speaks to the current moment. That whole experience will be packaged up in an effortlessly accessible, decentralized package so players have full control over their ownership and use. We’re aiming to build the first game in history with artificially intelligent non-player characters (NPCs) who live and breathe on the blockchain as NFTs. The characters are beautiful and change over time, generating compelling, emergent storytelling. The NPCs will develop curiosities and experiences and the metaverse will literally evolve following biological principles across generations.
To be clear, Irreverent Labs is not a wagering business; however, what makes us unique over any game studio is we are not adverse to partnering with large, reputable wagering companies later in development. We own all the IP that we’re creating, and we also have the capability to extract key live data and build specific interfaces that wagering operators will appreciate. With my background, we can package up all the vision, the live data, the interfaces, and everything that a large operator like DraftKings, Entain, or any reputable global operator would want to offer their customers.
The actual gameplay of our first game will leverage the AI trained by players into spectacular, cinematic fighting contests which are as exciting and entertaining as mixed martial arts or esports. It’ll be a 24/7 stream of content with really unique tie-ins, markets and wagering opportunities. But the core gameplay comes first. We know that the game we’re making will have fluid, natural wagering applications, and we’ll be looking to find partners to bring those added experiences to regulated spaces when it makes sense to do so. Irreverent Labs will release more details on our first game in January.
In the sense of characters’ evolution through time and ownership in Irreverent Labs, we could find some similarities with the horse breeding in ZED RUN. Can we expect some synergies between both platforms? How will you leverage features, developments and learnings from ZED, and other personal projects of yours, including the gambling side of things?
I’ve been involved in ZED RUN since the very early days. ZED is a pioneer in the play-to-earn gaming space, and they’ve paved the way for us and many others. Our team is taking a novel approach to gaming by adding advanced AI & machine learning to every single individual character. We’re also building our own reproduction algorithms, heavily rooted in real biological processes, to create lifelike depth in our metaverse.
Another difference between ZED and Irreverent Labs is genre and tone. ZED has done a masterful job of building a beautiful horse racing metaverse — and their roadmap is incredible. We’re building a fighting game set in the future, smashing together elements of Mortal Kombat, Goat Simulator, South Park, tons of IP that makes us laugh.
Our metaverse isn’t a simulator. Our metaverse will be a whole digital world that people want to stay in because it’s just fun.
Which were the key factors involved in your recent decision to sell Unikrn to Entain, and what are your personal prospects for that brand looking ahead?
The Unikrn sale made a lot of sense to the company because it meant empowering that team to take its award-winning products and scale up with the resources of one of wagering’s most impressive entities (Entain). I love Unikrn, but I’ve been hyper-engaged with blockchain and crypto projects for a few years. The sale came at the right time for me personally because it was well past time I moved on to bridge my gaming and entertainment background with advanced technology and my love for blockchain.
With Unikrn under new ownership, how is this affecting the synergies or complements it had established with ZED RUN, especially when it comes to gambling experiences?
Unikrn is the best brand and team building an amazing suite of wagering products for video games and esports (as proven by its many consecutive industry awards and historic sale in the esports space). I would expect nearly the entire team to continue their work and that most likely includes people who had exposure to ZED RUN; perhaps in the future they’ll find synergies to work together in building a wagering platform. However, I could only speculate what the Unikrn team will be building moving forward.
We have seen some esports betting operators go public, diversify their business, and also more traditional operators like Entain, with the acquistion of Unikrn. We are also seeing many startups that are looking to bring innovation, leveraging blockchain, NFTs, and even micro-betting technologies. How would you assess the current esports betting and iGaming ecosystem in terms of competitiveness, and where exactly do you still see a lot of growth potential? What are your outlooks for 2022, and the new challenges coming up?
Esports betting is oversaturated by underregulated entities, which is why a brand like Unikrn is so important in the space. I was really proud that we built a company that attracted Entain because of Entain’s commitment to licensing, sustainability and responsible gambling.
As consumers feel safer with wagering and underregulated operators are pushed out, esports is only going to continue to get bigger as Generations Z and Alpha reach adulthood. Esports and gaming wagering will probably exceed traditional sports betting in my lifetime.
In terms of crypto, NFT’s, and blockchain; in the regulated space, it’s a much more difficult and longer journey. Decentralization doesn’t give you a license to do anything you want — I imagine it’ll take time for big operators to get there. It’s cool to see companies like DraftKings investing in the space, and I’m sure others will follow.
I’ve always been a huge advocate for crypto and blockchain, even when the market turned in 2018. My belief in this technology is the driving force behind my decision to create Irreverent Labs.
Nearly a year ago, you told us in an interview that casino operators were not ready for the new situation brought on by the pandemic, and that they weren’t talking to their future customers, as they weren’t willing to invest in a new space, like esports betting. Have you seen any progress over the past year in that sense, as land-based operators were forced to enhance their online/mobile offerings? How would you describe the new esports gambler’s demands, and the best approach to meet them in the short and long term?
Some major players have woken up to the inevitability of gamers, which is demonstrated perfectly by Entain’s serious investment into gaming with the Unikrn acquisition and their other efforts to pierce into gaming & esports. Some others were given a jolt by the pandemic and are waking up, but aren’t really making changes yet.
Unfortunately, much of the wagering industry, particularly land-based operators, are frankly unprepared for the paradigm shift that is already beginning.
What’s more is that while all of these operators are already behind the curve on gaming, they’re also missing the opportunity to prepare for blockchain and blockchain gaming. These technology-powered cultural shifts are parabolic, so by the time operators are able to see the change, it’s often too late to adapt to it in time.
Sometimes, it’s good to be far ahead of the market because you’re benefiting from rapid growth potential. Therefore, it would be smart for any large operator to take some of their cash and invest broadly across the space, you never know when lightning will strike.
Nevada was set to create the first independent esports regulator in the US, but eventually the Esports Technical Advisory Committee was created instead, under the Nevada Gaming Control Board. How do you assess this change, and which practical contributions do you think this could bring?
I respect the folks on the ETAC, and I think it’s a step in the right direction. They certainly picked the right people to move things forward, and this is great to see. More jurisdictions need to take steps like Nevada to at least begin figuring out how to safely and effectively bring esports into the fold.