Axios Pro Q&A: Ben Feder launches investment firm Tirta

As money continues to flow into the metaverse, the gaming industry figures to be front and center, Tencent's Ben Feder tells Axios.

Why it matters: As with the metaverse, gaming has been a hotbed of dealmaking activity, punctuated by Microsoft's $69 billion deal for Activision Blizzard.

• Feder, who served as Tencent's president, international partnerships in the U.S., is leaving to start his own investment firm called Tirta, focused on the intersection of gaming and the metaverse.
• Feder is also a former CEO of Take-Two Interactive.

Why start up this firm? What do you see as the opportunity in this?

All the buzzwords that people hear about information technology — whether it's web3, metaverse or things like that — games are really the starting point for all of it.

• The innovations in the information technology business start with video games, at least on the consumer side. Unlike traditional media, which grows basically at the rate of GDP, gaming grows and changes at the pace of technology.

What kinds of companies are you looking at?

AI is a big topic at the moment. One of the concerns around building a metaverse is what it costs to build a high-quality video game. AI has the potential to take that cost way down. So AI in and of itself is interesting, but as an enabler of things like persistent worlds and metaverse worlds. It can be hugely important, and I think we're only in the very, very early innings of it.

Given the current state of the economy — a lot of tech companies are having to do layoffs and cut costs — is there any worry that this isn't a good time to start an industry investment firm?

If you have the resources to pursue it, it's definitely an opportunity. Everybody's aware of the economic challenges, but the reception has been really, really strong.

You ask any executive about the metaverse and each one will have a different answer on what they think it is. How do you look at what the metaverse is?

All of that disagreement about what the metaverse is, is all good news. There is a common destination somewhere off in the future that is undefined but everybody believes is a worthwhile destination. And yet there are many paths to it and many definitions of what's there.

• I don't have an answer for it, but that type of dynamic yields a lot of innovation, a lot of new ideas and a lot of entrepreneurship.

With all the talk about the streaming wars, I feel like gaming gets sort of left out of that. Anyone who's Gen Z or Gen Alpha, they spend way more time gaming than they do watching any of the streaming services. How do you look at gaming vs. streaming?

If the traditional media companies are honest with themselves, they would understand that Gen Z and Gen Alpha don't watch network television any longer.

• Where is your audience? It's clearly not network television. There is some streaming and there's a lot of gaming.
• Then you think about things like the rationale for Disney to acquire Fox and then launch Disney+ — not being intermediated and having a direct relationship with the customer. And if you put those two ideas together — that you need to be where your audience is and you don't want to be intermediated — you have no choice but to get into the video game business.
• But even then, are you going to get intermediated by a game subscription service? Are you going to get intermediated by somebody else's metaverse? These are all risks for traditional media companies, and many of them are nowhere.