Twitter, Musk and Bots, and Peloton's Digital App

absurdly brought on that in a moment. Plus, Peloton is going all in on content after reporting a huge loss of struggling brand leading into its digital app, adding new subscription tears Tears, including a freemium version. We'll talk about the pivot from hardware and gen Z isn't about the corporate life half of responding to a new surveys. They're trying to make money creating content for social media instead.

Will it work? We'll discuss all that in a moment, but first, let's talk a little bit more about Twitter. Now that judge in Delaware telling Twitter they got a hand over more information on spam and bots to Elon Musk. Here to talk about that. Bloomberg News Alex Barrinka and Sarah Fryar. So, Alex, I'll start with you look, the judge asking Twitter to hand Musk the data that he's been asking for. This is data that uh Musk's camp has said Twitter has been hiding, not all of it,

but some of it. What do we know? Yeah, it is some of it. Some of a concession in this absurdly broad ask, as the judge called it, Twitter had done a survey of nine thousand accounts basically looking to see are there humans connected to these accounts or are they bought. Initially, the company had not turned this over to Elon Musk on a number of concerns, including privacy concerns.

But this specific like tronche of data is what the judge is speaking about, needs to be turned over to Musk, which frankly does fall squarely in this argument that he's making that he doesn't have enough information yet um to say really strongly that Twitter's initial kind of public um statements that about five percent of users or boughts must says he doesn't have enough data to kind of vet that.

So this is one concession here that we do see the judge kind of forcing Twitter's hand to make sure Musk gets a bit more details on on what's happening on the platform more broadly. Well, and Sarah, it seems like most of the orders from the judge so far have gone in Twitter's favor. This one though not. I wonder do you make what you make of this? Is

it a clear negative for Twitter? Well, she's narrowed the broad requests to just those nine thousand accounts and wild Twitter has said, you know, we can't give over that data for privacy reasons and other reasons. Um. I think that is that is limited enough that there's it's sort of a compromise her for the company. I do think it's a small win for Musk, and it shows that the judge may in some part think that it's true, though he doesn't have enough information to gauge whether that

five percent number is Box. But let's let's not forget. I mean, this is not really a debate about Box, debate about whether there's been a materially adverse effect to Twitter in its time since Elon must sign that boarded four billion contracts to buy Twitter and argue what Twitter would argue or is arguing that there has not been a major change, not anything that would get Musk out of that contract. Um. And so so if the judge is asking for this data to be handed over. UM,

and it could go towards answering that question. UM, but I don't know that it will be enough. All right, UM, We're gonna continue to follow that. But I also want to ask about some changes to Instagram today. Instagram alex introducing some new child safety measures. Tell us what these

measures involves. Yeah, so, UM, they had some measures in place for teens think under the age of sixteen, basically so that they can have a feed that shows them less of content that might be seen as inappropriate for those younger users. Think um, sexually explicit content, violence, things that are allowed on the app that don't actually violate community guidelines but might not be right for that cohort Um.

The company basically came out and said, UM, they will default users under the age of sixteen years old to get this kind of less version of the platform that

excludes them from seeing some of this content. Now, if you have been watching and following UM some of Instagram and its sister companies Facebook's kind of dust ups in d C regarding child privacy, you'll know that this comes on the heels from a bit of a flurry of activity in d C there's a couple of actions in the Senate, a bill and an extension on child privacy laws and uh an action in the House basically that have taken a step back to look at these platforms

and say, hey, are we really protecting miners who are using the app? Remember, Instagram allows users thirteen years old and older on the app, so there are a number of years there, um where folks are below the age of eighteen on social media and might not be the right audience for some more of the explicit content that can show up on that platform. Interesting now, Sarah, of course you wrote the book on Instagram. Last year the company announced this big plan to start Instagram for kids.

There was a huge public outcry. They put those plans on pause. Do you think that project is done or or or could they attempt to, um, you know, do it again. I think they're taking a lot of the ideas that they had for Instagram Kids and applying them two teams who are currently on the platform. And and let's be clear, I mean although the rule said thirteen and up is allowed on Instagram, there are plenty of

nine and ten year old on on that app. Um. That's why Instagram has increased the restrictions around you know, asking you about your birthday. A lot of a lot of people recently have been asked that question us because Instagram is trying to make sure that they block it to anyone below thirteen, and they're trying to clean up their act and they're trying to improve their reputation. So I think that if they do manage to do that,

you know, nothing's off the table. They will always want to expand into new markets, into new demographics and people who are are younger than thirteen. Um. Those are the kinds of users that are really obsessed with YouTube, really obsessed with TikTok, those major competitors of Instagram, that they want to figure out how to how to make a

product for it. And I think social media opens up a lot more concerns than a straight entertainment product might because of the connections with strangers and the ability for your own content to be viewed by the masses um in a little bit more explicit way. So I think that that they're they're adding this around teams. They had parental controls earlier, ways to have a guardian check up on your account and know who you're connected to, who

you're messaging with. All of those are in an effort to try to improve that reputation around child safety, So that may be down the line they could they could take that extra step and bring the kids product back. Meantime, you've got this new survey out that younger people gen Z, you know, ditching corporate jobs are not taking them at all because they hope to make a career creating content

on social media. Alex, how realistic is it? Obviously we know that you know, social media influencers, they can make a lot of money. Um, this is obviously an evolving business that's still likely and it's very early stages. UM. Tell us more about this survey and what it tells us. Yeah, the service survey tells us basically that this younger generation gen Z does really want to, like you said, half of them, UM, think about a job outside of the kind of run of the mill job making money off

of social Now. The caveat here is influencers on social from the platforms themselves aren't making a ton of money. It's about building your following, UM, connecting with sponsors, getting sponsorships, and leveraging that following to make money off the platform. The survey basically broke down some of the numbers and showed that, you know, while there might be a benefit to this flexible work environment, you are your own Boston,

you need to hustle. Only twelve percent of these participants surveyed are actually making more than fifty thou dollars a year, which if you live in a place like New York, where a lot of these creators are, that's actually below the median income. So folks are hustling. Um. It's also probably why you know, some of these younger, Aden says, are looking to get on social earlier and build those followings if they have aspirations to turn this into a career.

But also it's not easy. You see the big success stories, but what you don't see are the folks who are on social kind of as a side hustle or kind of really leaning in to turn it to a full time job because you know, they are their own boss. Nothing's guaranteed, and it is one of those industries you know, where you get out of it as much as you put in. UM. So you know, we'll see if gen Z can turn this into the next big economy. But there are certainly a lot of folks with aspirations to

make social media their career path. Well, let's talk about that side hustle part of it, because there's this whole theme right now quiet quitting, where people are talking about just doing the bare minimum at their jobs, not going

above and beyond, trying to maintain a healthy work life balance. Um, Sarah, how realistic is it that some of these folks could you know, make some extra cash if you know that time that they're not spending going above and beyond at their corporate jobs, but making really cool TikTok's listen, and I've talked to to teens gen D folks who are now in the workforce who are using Instagram and YouTube

alongside their jobs. You know, they have that their personal account, and then they might have a more professional account, or they might have um one that's focused on fashion or food or their pets or home debt, or because they want to try something um as a as a you know, creative pursued a hobby that in the back of their minds, they're thinking, this could be a fallback plan if my career doesn't work out or if this becomes you know, wouldn't it be nice to be paid to travel the world.

Wouldn't it be nice to be paid to go to restaurants? Only a select few people end up getting the level of income that you would need to to really be micro famous. And then then, like Alex said, you really got to keep it up. There's a lot of consistency involved. There's a lot of reinventing yourself involved. If you're on Instagram, for example, and you've been post posting great photography, now they want you to make short form video, so you have to be really consistent and and um, you can't

quiet quit if you're working for yourself. So so I do. I do see it as a side hustle thing, something that kids are doing in college, or I should say adults are doing in college alongside their other work and hoping that it can help pay the bills. Um if they if they get the block of the draw. But I think that that's pretty rare. Um. It's just a general aspiration that people have, all Right, well, we're gonna let you go uh and uh do some other things

with your time. Gloober Sarah Bryar and Alex Barenka, thank you both. We'll be right back. This is a little bit peloton shares are reeling from a one point to billion dollar loss, but CEO Barry McCarthy says naysayers are looking at it all wrong. Shares jump this week when Peloton announced its new partnership with Amazon, that game all but wiped out today McCarthy that was optimistic. He says, what I see is significant progress driving our comeback and

Peloton's long term resilience. For more on that, I want to bring in row Hit called Carney, managing director at MKM Partners, the worst stock plunge in seven months? Uh is it warranted again? Thanks for having me, Emily. Not many things to cheer about in today's filing is and they have consistently underperformed the guidance. They have consistently underperformed that expectations. I think fourth quarter in a row we are seeing them coming low below our expectations and lowering

the guidance. So we don't know yet where the demand is going to essentially stabilize, So I think, yeah, to CEO's credit, they are moving fast. They're showing a lot of velocity of execution, but the market is moving against them. The demand curve is slipping very very quickly, very far away from them. So how hopeful are you about Barry

McCarthy and the possibility of a turnaround. Um in terms of the what they're doing, whether they can get the results that they hope to get is still probably six maybe twelve months out, so there needs to be some patients while during that time, we hope to have some stability of how in a post pandemic world, in a post procession world, in a high inflation world, how people view a high end product like Peloton and its place in the consumer discretion he spent. So that's the big unknown.

But what they can control is are a lot of things, and they're loading prices that they're playing around with some consumer options like renting fitness as a service. They're going to am is on and more retailers to try to get a broader audience. So they're doing a lot of things. But as as you know, we are in a very very unusual point in macro cycle, so that is hurting them a lot more than what Barry McCarthy and his

team hopes to achieve in a short time. What do you think of this pivot away from hardware to you know, offering some premium classes for example, how much could that help. Um, that is helping, but again, as I said, that is that is opening up their kind of user base to

people who are extremely price sensitive. As if you were not willing to buy a bite which is worth two dollars or fifteen dollars right now, probably you could rent it for a few months and uh and see how things go, and then of three to four months, if you feel like using it more, you could bite or you could continue to pay per month. So there is a certain cohort of users who may be willing to

try that out. And that's still very early days. So there needs to be a full kind of two directional logistics network they need to set up, They need to have inventory to be able to fulfill such a demand. So it is a good experiment. There is good success so far, but that's exactly it's an experiment. It's still very early days and those experiments, they are doing a

lot of those, and I feel encouraged by that. But as as I said, like the broader ship, the cargo ship that Barry McCarthy talks about in the letter, it's very slow to turn around, and still we are not seeing that from the outside. The effort that they're putting in all right, lots to continue to follow. Hit called Carney MKM partners managing director Row Hit, thanks for stopping by.

Amazon is getting greener and leaner the e commerce and Claude John announcing a partnership with the electronic equipment maker plug Power to cut fossil fuel use. Amazon is aiming to hitting at zero carbon emissions. And earlier this week, Amazon announced it'll wind down its telehealth service just weeks after buying One Medical for three and a half billion dollars. Let's bring in Bloombox Spencer Soaper who covers Amazon for us. So what do you make of this latest twist in

the Amazon health story. What does it mean in the context of the One Medical acquisition. Yeah, it does look like there's a there's a lot of overlap between what One Medical provides and what Amazon Care was doing. And One Medical is just, you know, significantly ahead of Amazon Care in terms of its footprint and its customer base.

And that's so uh. And then but the only brick froms Amazon really dropped about why it is shuddering Amazon Care is they said that it's not robust enough that as they as they tried to get this service out, this primary care medical service that they're trying to target other business is you know, to buy it on behalf of their own employees for um that they basically couldn't sell it, you know that that it didn't have a

robust enough offering. So it sounds like Amazon's coming back to the drawing board and whatever it does with one medical that's going to have to go above them beyond this, uh this Amazon care service which is fairly limited. Okay, so talk to us about this development in Amazon's push too e green or how significant is it? I mean, it's a it's a big deal and a big commitment in in to the extent of the amount of energy

that they'll be purchasing. You know, there's eleven thousand uh tons a year beginning in is basically the entire production of one plant of plug power. Plug power uses wind and solar energy to create hydrogen which will then be used as a fuel. So it's it's it's a very streamline green process trying to have no emissions throughout, and then that amount of fuel will run tens of thousands of forklifts and amas on operation, hundreds of trucks, So it's A. It's a it's a significant step and a

big boost for for hydrogen is a clean power source. Um, but it's still you know, Amazon's carbon emissions have still been going the wrong way, especially after the pandemic. It made this big pledge, but then all the pandemic demand, It's It's carbon emissions still went up significantly by like, so it's it's got a lot of work left to do yet, granted it's got till to do it. How optimistic are you that Amazon hits that goal? I don't know.

I mean, there's so much there's so much time between between now and then, and who knows you know, what form uh e commerce will will be at that time and delivery and that sort of thing. But there's there's certainly a lot of time left for them to uh develop alternatives. Okay, bloowork Spencer soaper update from Seattle. Thank you Spencer for joining us. The iPhone fourteen is only a couple of weeks away. Apples planning to announce the new device on September seven and put it on sale

on September sixteen. The new phone will continue to come in four models, two pro versions and two standard versions, but Apple's replacing the iPhone thirteen Mini with the new iPhone fourteen Max that will give Apple a standard iPhone with a big six point seven inch display for the first time. The new pro phones will have a forty a megapixel camera on the back for the wide angle lens, thinner bezels around the display, and a faster A sixteen processor.

The biggest design change will be to the front camera. The notch will be replaced with a whole punch sized cutout for FaceTime and selfies, and a pill shaped cutout will come in for face I D. The Pro models will also have enhanced finer recording and better battery life. The new phones are launching about a week earlier than usual, giving Apple an extra chunk of sale for its fourth quarter.

Beyond the iPhone fourteen, Apples planning to announce an update to the Apple Watch sc with a faster processor, an Apple Watch Series eight with a body temperature sensor, and its first Apple Watch Pro that will have a more rugged design in a larger display. Later this year, Apple's aiming to announce revamps to the iPad Pro and the entry level iPad in addition to new Max with M two Pro and M two max based chips. I'm Mark Erman. This is power On. You can subscribe to Mark's weekly

power On newsletter at Bloomberg dot com. Let's get back to the markets and take a temperature of the private markets ahead of FET Chair J. Pal's big speech this week. Lots of questions about how much further the government will go to tamp down inflation. How are vcs watching it all? Let's discuss with Andrea Walney, general partner at Manhattan Venture Partners. Andrea, great to have you back with us. So curious what Chair J. Powe could say that would change things for

venture capitalists. Well, thanks, Emily. So I would say overall, what we're all really eager to see is what the impact on the soaring inflation is going to do for all of us. And generally, I think we're all looking at the outlook of unemployment reaching absolutely five decade lows and generally what does this mean for interest rates when they've really just been hovering it near zero for so long?

And I think we're all just taking a pulse on what this employment environment is going to look like going forward. So startups are trying to hire, well exactly, So let's say you know, the FED says we're going to take more steps to tamp down inflation. Would would you do anything differently? Would you advise your portfolio companies differently? I think everyone's just trying to reduce spend continuously emily so

that they end the year really strong. I know, we really just kicked off the second half of the year going into Q three, and so generally, I every startup in the market right now is still got that hiring freeze going on, and really they're kind of eyeing the end of the year and saying, well, how do we keep retaining talent? How do we keep ensharing that everyone's incentivized while really you know, increasing the workload on everyone,

while hiring is still more or less still at a standstill. So, you know, are are your portfolio companies then thinking about doing more layoffs? Is this environment continues? Some of them are, some of them are. I think generally, going into the start of this past year, a lot of the late stage startups at least had big aspirations for big hiring plans, and so generally they are still looking to keep reducing spend across the board. With that said, I think the

hiring is still at a standstill. They're not really targeting an increase in budgeting and keeping things really tight, and I think a lot of startups are changing course around their narrative, around their forecast going into the second half of this season. Is it changing your investment strategy at all? I mean, are you pushing for lower valuations? Are you reducing the amount that you would put into a single company?

Do you as an investor have more power because uh, you know, times are tough for some of these companies. We really are seeing a big shift, and our investment strategy remains the same. So a man hand venture Partners, we are looking at late stage companies that are in the top decile of their sector. They are a category leader,

they have strong financial backing. What we're saying is that from a reflective standpoint of the public comparables, right the publicly traded companies company to the private startups, we're saying, listen, the valuations of these late stage companies are still really high. Overall, A lot of the companies were still raising at twenty to forty, if not fifty times revenue alongside other fundamentals, and with that set, a lot of them really just

don't want to take that valuation cuts. So what we're seeing is companies really leveraging debt structures as well as different types of uh anti dilution rights that we're kind of putting in place, as well as many other venture capitalists to say, we don't want to see you raise a down round. We'd rather come something really creative as an alternative. All right. I know you're an investor in Insta Card, and Insta Car is planning to go public

later this year. They've also, you know, done a big you know, quote unquote down round, which you know they chose to do of their own solution given the change in the market. Curious what you're expecting for their planned I p O at a time when it seems like the I p O window is pretty much sealed shut. Yeah, well, so from what I can share, really, I think generally Insta Car is one of many companies who are really still eyeing the market volatility to determine whether to go

out this year, if at all. Right, I know that that's what we're all discussing. Generally, I think that there are a company that really opened up the ambiguity to say maybe they'll go a traditional IPO. Maybe they'll do a direct listing, maybe another function of an exit. I think at this point in time, based on what we all know publicly, it seems that a traditional IPO path

is probably the safest course of action. UM, if they were to go out this season, I think really we all expect that that window that I p O window is between the third week of September and more or less the absolute latest being the second week of December, before the big holiday season, so they have some more

time to get ready. I do think that they could be the blockbuster I PO to end the year, but generally I think it's still a little bit shaky and we aren't seeing a course correct in the public market yet to say whether or not for certain they will go out. There's been a lot of controversy over the very big check that Andrews and Harrowitz wrote to Adam Newman, the co founder of Rework, for his new real estate venture. Some don't like it, some people do. What do you think?

So it is the largest single investment that in dreason Horrows has ever written, and I think it's fascinating that they both supported Adam Newman for Flow as well as Clow Carbon and everything that he's doing on the blockchain side. I think the strategy here is that obviously Adam Newman, whether we love him or hate him, is a proven founder and he could do it again. He already tried it with We Live, right, and that didn't really pan out. Obviously there were other things to focus on when he

was building We Work. But overall, I think where it's really fascinating for in Reason is that they obviously have such a strong focus in cryptocurrency and the future of digital assets. And I think where the narrative really is interesting here is how Adam Newman says that it flow um. They planned to offer a crypto wallet as part of the entire offering here and say that users could um

pay to earn and rent to own as well. And so with that being said, I think the overall strategy for in Reason is that the is not only a category defining way to change how we all live and where the biggest asset class being real estate, could change to democratize that ownership. But it really goes to the Theso the thesis that and Reason has around crypto going

forward and how digital infrastructure is going to change. So I think it makes a complete large amount of sense that they coupled this together and said, we've got a proven founder. Uh, and we're going to take this forward and see that he changes of the world again. Um, and this time in a different asset class. Interesting take. Um, you know the controversy side. What do you make of the size of this check in general? To write a

check that big in this very uncertain economic environment. Yeah, well, and Reason's funds just keep getting larger, so they do have to start deploying check sizes that are quite sizeable across the board. So I do expect to see more of that from them as a fund. But with flow specifically, I would say that this is a company that's going to need a lot of capital to keep acquiring the

units that they have. I mean, that's right now, they have three thousand apartment units under their mandate, and going forward, it's going to require an increasingly large amount of capital and doing it at a velocity that's really high. So it doesn't necessarily surprise me. But I would say with this capital, I would expect that they're probably well off for the next two years when it comes to their runway. All right. Andrea Wellly, general partner at Manhattan Venture Partner

is good to have you back with us. Thank you for sharing your thoughts. Coming up, the Daring merge is fast approaching. We're going to talk about what it all means for the rest of the ecosystem with all the Labs President John Blue. Next, this is Bloomberg. We've seen a number of other proof of steak networks already be

successfully launched Salanta near Avalanche. I mean essentially Bitcoin and Ether are the only proof of work networks still alive, and we haven't seen any issue on the other proof of steak networks, and I think proof of steak will

be just fine. Time now for our crypto report, and as Bitcoin maybe poise for another downward move, let's talk about what that means in the general ecosystem with our next guest, John Wu, president of Oval Labs, the lead developer of the Avalanche blockchain, and of course our crypto contributor Sali Boss John. We're all bracing for whatever j Powell has to say coming up on Friday. Curious what you're watching for and how whatever he says could mean

for the crypto ecosystem. Well, Bitcoin and Ethereum now are at point seven five in terms of correlation with the NASTAC. So what the market is saying is it's all high risk assets are correlated UM and Jay is going to raise rates. You know, I think uh sale sided yes, say uh damn Moore head from Pantera on you from TI are saying that we need rates go a lot higher.

And I agree it will go a lot higher. But why I think the market needs to understand is that there will be alpha in the crypto asset space and there's very good reasons for that. The fundamentals are absolutely increasing and improving. The technicals. I mean there's if you think about the the crypto market caps, they've gone down, the stable coins have not, and that tells you a lot of people are just hiding and they're ready to deploy.

And finally, I know you guys ultimately want to talk about the merge with Ethereum, and that's a huge catalyst. So I think what's going to surprise people is UM that point seven or five correlation, no matter where the market goes, will go down. And you're gonna ask some alpha in the space, John, some major investors in the crypto space. You said you worked at Tiger Dan Moore had also worked at Tiger before Mike Nevergrat's previously at Fortress. How much do you need to be in touch with

the macro to get the fundamentals right in crypto? Is it more about the protocols or is it more about what's happening around the ecosystem. Well, I've had the benefit now being of an opera an operator for five years and being an investor in technology for longer than that. Um So I think having a macro perspective is always

very important. Um you know, when you wake up in the morning, you need to know what season is, you know what clothes you put on, But then what clothes you put on is dictated by your personal tastes and exactly how warm it is. So as an operator now I'm really focused on getting more users in getting the masses into the space, getting more developers. There's a few hundred thousand developers in the space. There's thirty million plus

web developers. All these Layer one should be working on getting more of those developers and more applications and more use cases uh into the space. And by the way, those use cases they are really happening. So there's a lot of operating momentum. Speaking of developers. You're seeing people in the industry get paid to how kind of fix up any issues that might be pertaining to the Ethereum urge that is so highly anticipated, So a lot of people hard at work. How might the merge affect other

assets outside of Ethereum. This is great because I know it makes great headline to say Ethereum killer and market share. Here again, I'm in the belief that the space is so small that the space your work together to help the masses come over and bridge that gap. Um. I'm rooting as an operator for Ethereum merge to be smooth and to happen in September fift very well. I mean, Avalanche is e v M compatible assets moved back and forth. There's a bridge where over fifty billion dollars of assets

and move back and forth between Ethereum and Avalanche. So the more people that come into the ecosystem, to more applications get developed, it's good for many layer ones. In my opinion, UM, I think what you're I think that your users UM should also be hopeful that the merge

goes well. I mean, you know your viewers loved to invest in companies like coin Base, one of the best companies out there, and that's a listed company, And if the merge goes well, basically that's going to allow the concept of staking happen and in individuals institutions can earn eight nine. Now, the way coin Base works is that's a whole new revenue stream. If using their current you know, um formula of take rates and stuff, that potentially could

mean six million dollars of revenue for coin base. And that's off of the base of this year probably around three point eight billions. So that's significant and it's very good for coin bay stocks. So I think your viewers should be rooting for a successful merge as well. You know, it's it's clearly been a volatile year and it could continue to be volatile through the rest of the year.

What is your outlook on how long this quote unquote winter lasts and you know where we are at this time, let's say next year, um it is, so I personally think, um, the winter will be here for a little bit longer. But what I'm really looking forward to is these new applications, these new protocols that literally redefine the way businesses operator

operate and businesses will be built. I mean um if you what you can do when tokenization is here in full swing is you're going to encode the business logic into a smart contract and then the platform is the business. So that what does that mean? That means like right now we're talking about coin base, and the coin Base has about five thousand employees, market cap of sixteen billion, has about two point four two point five billion dollars

a daily volume. A company like unit swap also an exchange in the DeFi ecosystem, it has a billion dollars of volume a day and that's about a hundred employees only there. So if you do the token cap and the market cap to employees at coin Base, it's about three million dollar is a value created by and by employee. Roughly at unite slap, we're talking about like forty fifty million dollars dollars worth of value creative by each individual. So what we're doing is we're going to redefine what

businesses are. And the best part of this is the network effects that happened crew back to the users, not to I need to really get your opinion here on something because you're talking about staking and you know really quickly here what is staking? Most like in traditional financial services. The reason I ask is because if it's going to be a bigger part of the ecosystem, coin based might start making it a bigger part of its product suite. Is it subject to regulation in a way that a

traditional lending product would be or a clearinghouse would face. Well, philosophically, what it is. It doesn't exist in the traditional world. You know, the way value is distributed in the traditional world is really and created and distributed is really two ways, right, is labor and then there is using your capital to make more money. What labor you get paid for the value you create. Capital, you take your existing money, you put it to work, and hopefully you get a return

on it. Staking is a combination of the two. You are actually taking your existing capital helping validated secure a blockchain and therefore getting a reward as well as a yield for it. So it's a hybrid. And when you talk about how do you regulate that, that's a really good question because is a labor or is it actually

dividends and yields? It's not clear. Um, I kind of think you're putting things to work, and that's the spirit of permission lists get being part of the community, helping make decisions and getting rewarded for your efforts, not necessarily just getting putting your collateral down and getting a yield. All right, lots to think about. John Wou of Labs, good to have you back as always, and our own

thank you. Some thing else we're following Sony raising the price of its PlayStation five console and major markets outside the US by as much as the move is in response to global inflation rates and currency trans impacting consumers and creating pressure on multiple industries. I sat down with Microsoft Gaming CEO Phil Spencer to talk about its relationship with other platforms like Sony. I first asked him why he's such a big proponent of cross platform gaming. Take

a listen to what he had to say. Maybe you happen in your household to buy an Xbox and I buy a PlayStation, and our kids want to play together and they can't because we bought the wrong piece of

plastic to plug into our television. It just seems that these artificial constraints that the industry might put up for near term kind of business dynamics in the long run, if you take a business that is at three billion people growing to four billion people over the next decade and saying how do we continue to grow this business? Reducing friction for our customers has as an industry has to be at the top. So how far does this go?

Does this mean that activision games that Call of Duty you'll be able to play on any platform and perpetuity. I don't know what that means and forever, like when you think about how long, and it's not for any kind of nefarious business reason. It's just like, what do we even platforms mean ten years ago? Like, I think the definition of some of these things might change over time, but our expectation is we want more people to play. So I know you're working with Sony on some things

for the benefit of gamers. Can you talk to us about that a little bit. We have a pretty big publishing footprint on PlayStation as well as Nintendo, which means we have good relationships with those platforms because we're they're a big part of our business and we're a big part of their business. I think our long term ambition of where we see this industry growing is also shared. I think the area where things get stuck a little bit,

it's in the kind of near mid term competition. If somebody walks into a store and they have one bill, they're either going to walk out with the switch, which is most people buy, or they're gonna walk out over the PlayStation five, or they're gonna walk out with an Xbox, or maybe somebody will go buy gaming a Windows PC. But in that world of somebody's got to make a decision for one platform over another in the beginning, UM, that is where I think we we get stuck in

some of the kind of near term competition. I don't think that's bad, right, It's just the dynamic of each of us pushing each other, um to build the best

product for our customers. You can watch a full edition of Bloomberg Studio at one point oh with Microsoft Gaming cel Phil Spencer at Bloomberg dot com, or check out the podcast and that does it For this edition of Bloomberg Technology coming up Friday, A firm CEO, Max left Chin joins me to talk about the company's revenue forecast for three it's earnings just now shares under pressure, as well as the future of buy now, pay later, And don't forget to check out our Bloomberg Tech podcast anywhere

you get your podcast for your daily tech round up. I'm Emily Changing in San Francisco. This is Bloomberg