The $UEFN Pivot to Modular AI in UGC

I've profiled $UEFN before — I like the stock. I liked what they were doing before, which was to serve as the Nintendo/Y-Combinator for UGC, but the pivot they are about to make will drive potential even higher.
There is a valid critique here of lack of a north star, but I'll tell you why I don't think that applies here: This company is a zygote. The previous mantra was created even before they brought on their current CEO Zad Ngur. Also, UEFN's unique partnership with backer Virtuals.io gives it the edge to expand its stake on the UGC vertical without sacrificing product quality.
We'll talk about all of this in the text below. I'd like to start with a brief synopsis of the actual pivot being made and why it was considered a huge win for the smart money in the UEFN TG.

The Nintendo of UGC

Previously, the focus of UEFN was to find great UGC studios, fund them, and earn revenues from the player base on the maps they created. This revenue would be distributed to stakers of the UEFN token through inflation of the float and in capital gains of the $UEFN token through first party buybacks. A solid plan, especially when you consider the company was already making significant revenues from month one of its inception.
This was definitely a narrative that web3 investors could sink their teeth into. The $UEFN, in token, experienced a 300% rise because of a Twitter thread from yours truly, which tipped off some larger influencers to pay attention to the project and profile it as well. Were this the full extent of the company, a little bit of marketing would have taken this token to the moon.
The call was for more marketing. However, discussion in the TG took an unforeseen turn as the core team decided to expand itself.

The Pivot to Modular AI

Amidst endless wening and calls for moonboi tactics, new CEO Zad dropped the following quotable on the TG:

In a world, where technology is rapidly reshaping the landscape of human interaction and entertainment, there lies an unprecedented opportunity at the intersection of artificial intelligence, gaming, and UGC.
We've got the support of Virtual Protocol, and we've got some of the best brains in the AI space. We can now break boundaries with UEFN.
I'll leave you with this: Imagine transcending the boundaries of traditional games, where in game characters evolves [sic] into dynamic, sentient, counterparts, capable of learning, earning and forging meaningful connections with gamers across different games. We will be the AI studio for UGC and gaming.

A tl;dr later on from Ethermage, CEO of PathDAO (now Virtuals Protocol), explained:

Team has deep expertise in UGC, and is in the midst of hiring some AI giga brains. We are also bringing resources in from the Virtual team on the AI front to solve some big questions: How to build AI into UGC games, agency into the AIs and then translate cognitive functions from LLM into game actions.

I'm just imagining going back to my childhood and playing Sonic 2 with a Tails that actually knew what it was doing instead of falling into every pit and getting crushed off screen every two seconds. 
When I view it from that lens, I see how big this could get.

Pivoting the Right Way

There are plenty of things that the UEFN team could have done better during its first run as the Nintendo of UGC. However, I'm staying involved in this project through the pivot to UGC AI and I am actually quite excited about it.
I'd like to share a few of the green flags – opposite of red flags – that kept me in the project instead of running for the hills.
1️⃣ Partnerships
The fact that the CEO of UEFN was immediately backed up in his commentary by the CEO of Virtuals spoke volumes about the true interactions between the two teams. The word partnership gets thrown around far too often in Web3. I stayed in the project because this partnership is extremely strong, and both teams have shown the ability to follow through with everything they say.
Following through means hiring true giga brains for the UEFN team. They have already shown the ability to attract top talent with the acquisition of Zad, who has plenty of personal connections to top performing executives from his association with SEA corporate gaming staple Ampverse (that's who bought his previous company Championfy).
The team also has less formal partnerships with top Asian influencers, who will become essential for marketing once the bull run begins in earnest and/or investors actually begin to look for product. Even with the issue of a slightly unfocused north star, UEFN was still able to garner support from investors and influencers as big as VirtualBacon and Dingaling.
2️⃣ Narrative
UEFN has accomplished the enviable goal of combining every single 2024 web3 buzzword into a single, manageable company mantra. Modal, AI, UGC, gaming — no matter the narrative turns this bull run takes, UEFN can credibly say they are a part of it.
As unfortunate as this truth may be, being a part of the narrative is far more essential to maintaining a token price than actually delivering a product within the short span of a bull market. I've decided to stop kidding myself about that this time around.
3️⃣ Focus
It's fairly amazing what the team has been able to accomplish even without a clear focus. Now that they have the direction in place, I am quite excited to see what this cabal comes up with.
What's even more exciting is that the partners outside of the core team are aligned in their focus as well. When you have this many smart people with this much access to capital, the risk reward ratio at a $2 million market cap is simply too good to pass up.
4️⃣ History
This may be alpha for those who haven't followed this cabal since the inception of PathDAO. Although they were not the most successful gaming guild of the previous bull run, they showcased the ability to keep up with the pace of the market and build relevant product. Many of the interesting initiatives they started in the last bull run were overlooked because of the precipitous fall in the PathDAO token price.
The truly impressive metric here is that they were able to build an entire suite of products for a gaming guild without depleting their treasury significantly, even as a debilitating bear market hit us. These are people with a history of making money in the SEA market and understanding how to efficiently spend money. Now that they have their feet underneath them at the summit of the bull market, this efficiency will pay off with a huge expansion of capital, which I expect will be used quite well.
I say all that to say this: Ladies and gentlemen, this is how you pivot a web3 business. You don't allow moonboi community members to shake you out of your plan before it is set. There's no need to announce things before they're actually ready to be announced. Finally, you understand the needs of the market and set your production goals and narrative to meet those needs.
Needless to say, bullish.