Latest / Bloomberg Intelligence / PureFunds' Chanin Sees Non-Gaming Companies Adopting AR (Audio)

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PureFunds' Chanin Sees Non-Gaming Companies Adopting AR (Audio) · Bloomberg Intelligence

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  Speaker 1: and that's a Bloomberg business splash. You're listening to taking
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  Speaker 1: stock with Bim Box and Kathleen Hayes on Bloomberg Radio.
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  Speaker 1: Nintendo has been on quite a roller coaster the past
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  Speaker 1: few trading days, posting it's worst drop in twenty six
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  Speaker 1: years yesterday after the company poured cold water on the
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  Speaker 1: notion that the explosive popularity of Pokemon Go would translate
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  Speaker 1: into steady profits. Now, if you were looking for a
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  Speaker 1: way to profit on some of this volatility, well you
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  Speaker 1: could find it if you listen now to our next guest,
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  Speaker 1: Andrew Shannon joins us now he's chief executive officer at
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  Speaker 1: Pure Funds. It's the worst, World's first video game tech
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  Speaker 1: et F. Andrew, Welcome to the show. Thanks so much
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  Speaker 1: for having me, so tell us more about you and
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  Speaker 1: how you came to start this g A m R gamer,
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  Speaker 1: world's first video game uh tech e t F. Are
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  Speaker 1: you a gamer yourself or did you say, hey, there's
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  Speaker 1: a way to make a lot of money in this
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  Speaker 1: Pure Funds are Our company has a has a history
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  Speaker 1: of creating new investment opportunities focusing on very specific industries
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  Speaker 1: and themes. We were actually approached with this idea from
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  Speaker 1: an individual that has been a research channel is covering
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  Speaker 1: the video game industry for roughly a decade and really
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  Speaker 1: shared um and it kind of opened our eyes to
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  Speaker 1: how large of an industry this really is. Most people
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  Speaker 1: don't realize, but more money was spent last year on
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  Speaker 1: video game technology around the world than cybersecurity. And it's
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  Speaker 1: once you start learning more and more about this industry,
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  Speaker 1: it becomes a much more interesting one and one that
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  Speaker 1: I think more people will want to learn about. And
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  Speaker 1: can you give us any number of figure? I was
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  Speaker 1: looking around about twenty billion dollar a year business, so
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  Speaker 1: I think that might just be for the games itself.
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  Speaker 1: For all, video game technology industry is roughly over nine
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  Speaker 1: billion dollars last year. Okay, so you got over nighte
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  Speaker 1: deep billion dollars. Tell us about video games like Pokemon
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  Speaker 1: Go that require some kind of either augmented reality or
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  Speaker 1: virtual reality, and I keep thinking about fitness things like
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  Speaker 1: Zombies Run and Geo Cash and for example, Fantastic. So yeah,
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  Speaker 1: So these are two types of technologies that we've been
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  Speaker 1: hearing about for the last several years, virtual reality, augmented reality,
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  Speaker 1: and you know, ones that at times can can be overhyped.
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  Speaker 1: You know, I think virtual reality still has a long
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  Speaker 1: ways to go, but as far as Pokemon Go and
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  Speaker 1: UM augmented reality, I think this was one of really
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  Speaker 1: the first games that the mainstream um, you know, uh users, gamers,
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  Speaker 1: I've realized what this technology is and how they can
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  Speaker 1: use it. And now they're starting to see and understand
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  Speaker 1: better and grasp how this technology can transcend just entertainment
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  Speaker 1: and into things like you said, like training, simulation, fitness, healthcare, education,
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  Speaker 1: and you know, the list goes on. And now it's
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  Speaker 1: up to the software providers to say, Okay, this is real.
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  Speaker 1: People are interested in that, they want to use it.
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  Speaker 1: We can put it on mobile, we could put it
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  Speaker 1: on consoles, different uh uh, different mediums like that, and
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  Speaker 1: we'll it'll be interesting to see how it transcends entertainment
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  Speaker 1: moving forward. Well and in fact, I'm not a gamer okay,
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  Speaker 1: but to me, one of the cool things about Pokemon
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  Speaker 1: Go is it makes people get out and move around,
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  Speaker 1: So it sends this is is that one of the
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  Speaker 1: things you think that then it fits in with this
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  Speaker 1: to me, this broader uses of what we call video
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  Speaker 1: games and augmented reality, so people aren't just sitting in
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  Speaker 1: front of a screen with their thumbs moving, but actually
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  Speaker 1: doing something. Absolutely, I can envision a future where we
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  Speaker 1: see children in the classrooms using virtual reality to actually
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  Speaker 1: do geography. Instead of learned geography, UM, where you're using
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  Speaker 1: augmented reality to work in your in your chemistry lab
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  Speaker 1: or to learn a new skill set on the job.
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  Speaker 1: I think that's kind of where we are right now,
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  Speaker 1: where people are saying, Okay, this technology is here with
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  Speaker 1: virtual reality. Like I said, they still have a lot
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  Speaker 1: of kinks to work out, which is why you haven't
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  Speaker 1: seen the software there. But now seeing this success that
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  Speaker 1: that Nantic and Nintendo have had with Pokemon Go, it
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  Speaker 1: could be a way to kind of dust off old
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  Speaker 1: game franchises or create entirely new business models. UM. You know,
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  Speaker 1: why not why not have something at your at your
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  Speaker 1: local department store where it's almost a game to try
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  Speaker 1: to find some sale item as opposed to just show
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  Speaker 1: up and get get the item on sale. I think
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  Speaker 1: there's many different ways that this can be used, and
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  Speaker 1: I think we're going to start to see retailers, fitness
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  Speaker 1: chains things like that. Um I even have you even
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  Speaker 1: heard of of fitness classes looking to kind of cash
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  Speaker 1: in on the Pokemon craze and incorporate augmented reality. So
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  Speaker 1: I think this is kind of opening new new businesses
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  Speaker 1: that never really considered video games or gaming technology. And
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  Speaker 1: are looking at ways to apply that to how they
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  Speaker 1: go about their business. What's old is new again. I
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  Speaker 1: keep thinking of Nintendo Power Pad or even Dance Revolution
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  Speaker 1: as well as the Nintendo. We Nintendo happens to be
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  Speaker 1: I believe the largest holding in the Pure Funds video
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  Speaker 1: Game Tech Exchange traded fund symbol g A m R.
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  Speaker 1: How does the company get into this e t F portfolio? Right,
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  Speaker 1: So that's determined by the indext provider. But what they're
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  Speaker 1: really looking for our companies that have a focus on
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  Speaker 1: video game technology, Now what is that? Those are companies
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  Speaker 1: that are developing video games and software, those developing consoles.
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  Speaker 1: Even some of the chip providers um In Video and
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  Speaker 1: a m D are in the fund as well as
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  Speaker 1: some of the mobile gaming companies and some of the
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  Speaker 1: peripheral equipment providers too. So it really looks at the
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  Speaker 1: overall industry, those providing and creating the technology, as well
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  Speaker 1: as the platforms that that gamers are using, even retail
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  Speaker 1: companies that are selling UH games and distributing them. So
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  Speaker 1: it really looks at the overall ecosystem. It doesn't just
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  Speaker 1: focus on the people making the games. I think that
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  Speaker 1: kind of ties into you know, This isn't just Entertainment's
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  Speaker 1: not just the game companies of the software providers. It
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  Speaker 1: is those that are creating all these different uses as well,
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  Speaker 1: for M gamification, augmented reality, virtual reality. And right now
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  Speaker 1: those areas are fairly small, but very potentially those areas
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  Speaker 1: could um become a larger exposure and the fund as
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  Speaker 1: they mature as well. So Andrew as someone who has well,
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  Speaker 1: you have a couple of funds. When we're talking about
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  Speaker 1: the Video Game fund GMR and we're going to maybe
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  Speaker 1: get a chance to talk about I fly looking at drones.
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  Speaker 1: But Apple's releasing today. What about the Apple earnings report?
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  Speaker 1: Is important to you as the person who oversees this
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  Speaker 1: video game tech e t F. Yeah. One of the
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  Speaker 1: larger trends that has made gaming so much more pervasive
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  Speaker 1: is that, um, you know, with the broad spread of
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  Speaker 1: broadband and mobile devices, more people can actually play games
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  Speaker 1: and get access to games than ever before. You don't
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  Speaker 1: have to spend a couple hundred dollars on a console
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  Speaker 1: and do this. With Apple, they're kind of approaching this
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  Speaker 1: from from many ways, which make them an interesting holding
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  Speaker 1: for the company. You know, they have the smartphones and
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  Speaker 1: tablets that people can actually play the games on they're
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  Speaker 1: developing Apple TV and game and game companies can actually
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  Speaker 1: add games to an Apple TV, so now you can
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  Speaker 1: play games directly on your TV if you have an
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  Speaker 1: Apple TV device. So really what we're you know, want
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  Speaker 1: to see is, um, you know, more people getting uh,
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  Speaker 1: these different devices in their hands so they can use
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  Speaker 1: and play these different games. So they're kind of a
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  Speaker 1: platform company almost kind of like a console company, but
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  Speaker 1: you know, they're they're not limited to just certain types
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  Speaker 1: of companies and games being able to be accessed from
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  Speaker 1: their phone. So you know, more people are are buying
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  Speaker 1: and getting iPads and iPhones in their hands. That's more
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  Speaker 1: potential gamers out there, as well as more people using
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  Speaker 1: the app store to potentially download these games, and more
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  Speaker 1: people are interested in the drone industry. The Pure Funds
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  Speaker 1: drone economy strategy, E t F Symbol, I Fly Parrot
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  Speaker 1: Say the French wireless products manufacturer and the maker of
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  Speaker 1: Bebop drones as well as many drones. What do you
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  Speaker 1: focus on? Is it defense? Is it entertainment? Is commerce?
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  Speaker 1: When it comes to drones? Yeah? You know, right now,
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  Speaker 1: this this is a burgeoning industry. There have been drones around, um,
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  Speaker 1: you know, for for many years, but we're starting to
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  Speaker 1: see it transcend just kind of the original aerospace and
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  Speaker 1: defense applications, and this technology is advancing, so we're starting
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  Speaker 1: to see new businesses try to incorporate drones into their
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  Speaker 1: business model to create new efficiencies to better serve their
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  Speaker 1: their clients and as well as do things that they
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  Speaker 1: haven't been able to do before. So you know, right now, um,
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  Speaker 1: you know, there are only a couple of pure play
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  Speaker 1: publicly traded drone companies you mentioned parrot Ero Environment as
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  Speaker 1: well in American company in the drone space, but currently
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  Speaker 1: there are you know, many kinds of aerospace defense companies.
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  Speaker 1: But as more companies get involved and started corporating drones
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  Speaker 1: into their business lines, um, you know, it wouldn't be
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  Speaker 1: difficult to see those companies start to enter the fund
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  Speaker 1: as well. UM. It also does have companies that make sensors, chips,
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  Speaker 1: UM cameras for drones UM currently as well. So it's
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  Speaker 1: it really is this overall kind of drone ecosystem and
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  Speaker 1: the indexes is cleverly built to use what they call
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  Speaker 1: a proprietary drone score to rank scores based on public
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  Speaker 1: information to determine what each company's footprint is in the
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  Speaker 1: drone industry. And as more companies start to get contracts
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  Speaker 1: or create UM create or incorporate drones into their businesses,
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  Speaker 1: they have the ability to also come to the fund
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  Speaker 1: and ideally, UM they'll be more pure play companies in
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  Speaker 1: the fund. As more companies UM that are publicly traded
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  Speaker 1: are pure play drone companies, maybe you could create a
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  Speaker 1: new fund that sort of combines gaming with drones. I
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  Speaker 1: don't know how you do that, but we we don't
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  Speaker 1: want to get to too specific. We want to try
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  Speaker 1: to capture these these broad industries that we think our
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  Speaker 1: growth emerging growth opportunities and provide that ability for investors
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  Speaker 1: to get global diversification. So each of the publicly traded
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  Speaker 1: ets that we have all have a global exposure, so
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  Speaker 1: you're not just getting what you see at home, but
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  Speaker 1: really uh diversification around the Andrew Channon, thank you very much,
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  Speaker 1: Chief executive officer of Pure Funds. You can follow them
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  Speaker 1: on Twitter at Pure Funds, Drones and video Game Investing.
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  Speaker 1: This is Bloomberg