## Stepping into the Digital Realm – Technological Advancements – iGB
The digital universe has rapidly become a popular subject for the gaming sector looking ahead. However, descriptions of this potentially revolutionary technology remain unclear, and genuine digital universe gambling products are still scarce. Daniel O’Boyle inquires, is it the future of gaming, or simply hype?
**Home > Technological Advancements > Stepping into the Digital Realm**
**Stepping into the Digital Realm**
Three decades ago, author Neal Stephenson published *Snow Crash*, a science fiction novel with distinct biblical overtones, about Hiro Protagonist, a Mafia pizza delivery man who discovers a “language virus.”
Naturally, in 2021, the book would inspire a half-trillion dollar company to change its name.
The book first used the term “digital universe,” a word that quickly gained momentum in the tech world, including developers of Second Life.
But for most people, the word didn’t mean much until Mark Zuckerberg declared last year that his company would be changing its name from Facebook to Meta.
“From this point forward, we will be digital universe-focused,” he declared.
This quickly sparked a surge in searches for the digital universe, as well as unprecedented consumer interest.
“After Facebook rebranded to Meta, I believe hundreds, if not thousands, of different digital universes were created, and their values skyrocketed,” said Vladimir Malach, Chief Commercial Officer of Evoplay.
Ive heard it’s possible to purchase a virtual dwelling in the metaverse for the same cost as a physical one.”
What’s coming next?
The metaverse has become a popular topic in the future of gaming.
Entain is one of the leading companies getting involved. They declared a new “Global Innovation Hub” that will invest heavily in new technologies, including the metaverse.
The World Series of Poker also joined the trend, creating a virtual poker club using NFTs.
“It’s a significant development,” stated Gal Ehrlich, CEO of Beter. However, gambling isn’t the only industry interested in the metaverse. Experts believe it could be worth a considerable amount of money, potentially reaching $800 billion by 2024.
But if you inquire about the actual nature of the metaverse, you’ll receive a lengthy explanation. And if you ask two individuals, they’ll likely have differing opinions.
“We have a general understanding of what exists,” remarked Simon Hammon, chief product officer at Relax Gaming. “But I don’t believe anyone truly knows what it is.”
Interoperability
The concept of the metaverse is frequently characterized as a virtual realm, but Lloyd Purser, Chief Operating Officer of Funfair Technologies, highlights that digital realms have been around for a considerable period: numerous globally renowned video games are set within a digital environment.
“If you conduct a search for ‘what is the metaverse’ on Google, you will encounter a comprehensive definition that states ‘a space where individuals can engage in a shared virtual universe,'” he stated. “Therefore, Fortnite qualifies as a metaverse. World of Warcraft also constitutes a metaverse. The metaverse is not a novel concept. Have you ever participated in a massively multiplayer online role-playing game? That is a metaverse.”
So what is the novelty? Did Mark Zuckerberg adopt a term from science fiction, apply it to the features of video games that children adore, and spark an investment frenzy valued at $8 trillion? Well, not precisely. While there might have been prior virtual environments, Stefan Kovach, founder of Rarerthings, asserts that the current metaverse possesses a distinctive characteristic that sets it apart.
“In my perspective, there are numerous Web 2.0 metaverses such as Fortnite and Roblox, which are three-dimensional immersive environments where we typically engage in gameplay and socialize,” he remarked.
From in-game to blockchain
“The transformation that is occurring is that these metaverses will progressively be constructed on Web3, built upon blockchain technology.”
He clarifies that this signifies players will have the ability to possess specific items within their virtual realms, frequently through non-fungible tokens (NFTs).
The primary rationale for this is tied to possession, he stated. It empowers individuals to possess land, possess items within the virtual realm. Products, things you acquire in the digital universe, everything imaginable in the tangible world, can theoretically be crafted, sold, and interacted with in a metaverse environment.
This actually generates a very distinct dynamic, which enables these decentralized and community-controlled economies to be established.
However, possession still exists in the Web 2.0 digital realm—video games like Fortnite have skins, weapons, and items that players can possess. What’s novel is the nature of possession.
“If you examine esports games now, they still don’t function like the metaverse because there isn’t a robust economic motivation to drive that level of connection,” Ehrlich stated. “That economic motivation can be realized once third-party entities permit different games to interact with each other.”
Interoperability between digital universes
In Web 2.0, item possession is typically recorded on a company’s servers, while possession of non-fungible tokens is recorded on a blockchain. Consequently, you can possess items across diverse games.
“There’s a term in the blockchain world—interoperability,” Purser explained. “Let’s consider this fashion NFT marketplace as an illustration. So Gucci creates a limited-edition batch of T-shirts, and they’re sold in that fashion marketplace. Then you desire to have an avatar in the Sandbox.”
You possess a virtual representation, an avatar, that resides within the digital realm of Decentraland. Simultaneously, you maintain another such avatar in a distinct metaverse environment.
Due to the inherent interoperability between these virtual universes, you have the ability to adorn yourself with exclusive, limited-edition digital garments from the renowned fashion house, Gucci. This seamless integration would be impossible in a centralized system, where your virtual possessions and currency are confined to a specific game or metaverse.
The tokens that exist within these virtual worlds are more than just superficial adornments. Purser emphasized that certain tokens grant players a degree of control over specific aspects of the game itself.
“If you possess these governance tokens, you have the power to influence the future direction of the product. You can determine the evolution of the economy, the transformation of loyalty, and all other related aspects.”
**An Immersive Experience**
But what implications does this hold for the realm of gambling?
The most apparent consequence is the potential to introduce the immersive experience typically associated with video games into gambling products.
JNS Gaming’s LynxBet brand is among the few gambling operators actively developing for the metaverse. Jeremy Taylor, the company’s CEO, stated that while it is currently more of a preliminary landing zone, it presents an opportunity to differentiate themselves from existing operators whose websites exhibit a monotonous uniformity.
“We have embarked on the creation of our own unique metaverse world, where customers can engage in a variety of gaming experiences,” Taylor remarked.
Frankly, if you visit most virtual gambling platforms today, it’s all the same games, the same layout, just different hues and labels.
We don’t desire that; we aim to construct our own front-end, seizing this opportunity to provide a distinctive customer experience.
Malachi’s vision is to close the divide – he’s dedicated most of his career striving to blur the lines between gambling and video games with products like first-person shooter style slot machines, and he believes the metaverse is the ideal setting to advance this.
He believes this immersive environment can blend the experience of the most opulent land-based resorts with the ease of online gambling.
“I’m aware that many gamblers dream of visiting Las Vegas, spending time there, enjoying these entertainment options,” he stated. “I haven’t personally been to Las Vegas, but I’ve learned from conversations with various individuals in Macau and Las Vegas that they express experiencing a distinct kind of emotion.
“The metaverse will present a choice for those who lack the resources or the time, who are unable to visit Las Vegas or Macau or other major casinos, to feel this ambiance.”
Simon Hammond, on the contrary, is doubtful.
Should you have the opportunity to journey to any place on Earth, and encounter experiences that are unattainable in reality, would you select a Las Vegas gambling establishment?
“It is undeniable that the conventional and contemporary casino model requires transformation,” he stated. “It has the potential to be a highly thrilling experience, but numerous inquiries must be addressed regarding the actual casino content and its allure.
“In a decade or two, will patrons be inclined to engage with traditional slot machines in their current configuration, as it will contend with more interactive entertainment venues? It is improbable, therefore the industry must adapt.”
The Influence of Non-Fungible Tokens
Another manner in which the virtual realm is altering gambling is the possibilities presented by specific kinds of non-fungible tokens. In the typical scenario, the most devoted patrons of casinos incur the most financial losses, the virtual realm could provide the chance to acquire rewards through game participation.
“It could enable you to enter diverse casinos, be acknowledged as a distinguished guest, and actually obtain certain advantages by possessing these non-fungible tokens,” Kovacs mentioned.
However, he emphasized that any promises of a casino where everyone can triumph may be excessively optimistic.
“To be frank, there are certain play-to-earn models that are fraudulent schemes,” he stated. “But for sustainable models, it is an excellent method to provide supplementary rewards rather than engaging solely for financial gain. It is fatiguing to participate in such a manner.”
Although he recognizes that some may wonder about the allure of casino content in the virtual realm, Hammon firmly believes that the virtual universe won’t entirely supplant gambling. Instead, he contends that successful gambling products in the virtual world will probably be significantly different from what we are familiar with today.
“It’s not sufficient to simply transfer the virtual experience and spin the slot machine wheel virtually,” he stated. “The entire game mechanics, the gameplay, the player behavior, I think all need to be altered dramatically, and I’m not certain what direction that alteration will take yet. But it definitely needs to be changed.”
Retain the core, introduce new components.
However, Ehrlich believes that the fundamental mechanics of existing games, such as slot machines, are unlikely to necessitate a complete overhaul. Instead, he points out that the change will be in how players interact with the games.
“The mathematical models underlying slot machines are likely to remain the same, as they are largely designed to generate the appropriate level of excitement and engagement for different player demographics,” he explained. “But what can be redeveloped is the entire user experience.
“Instead of a flat, two-dimensional screen display, you can create a very intricate 3D world, that’s one element, and the second element is the social element. Interacting with different players in the same menu, holding and trading digital assets, the virtual universe brings a lot of new opportunities that slot machines can utilize.”
For BetGames’ chief executive, Andreas Koeberl, providers and distributors must keep a fundamental principle in mind when creating products for the digital realm: they should offer something more captivating than their non-digital counterparts.
In Koeberl’s perspective, the achievement of widespread adoption of digital gambling relies on attaining a critical mass of users, which depends on the capacity to draw in and keep them engaged. To accomplish this, he believes that social aspects are essential, such as virtual entertainment venues specifically aimed at and closely interacting with your community. He emphasizes the need to consider the value proposition of the digital world, what makes it more valuable than the conventional mobile world?
“You must ask yourself: why would I spend time there? Why would I remain? Acquiring and converting users might be straightforward, but retaining them is challenging.”
Koeberl believes that perceived simplicity of use and perceived utility are key factors in the digital realm’s success. Perceived simplicity of use refers to the possibility of accessing and utilizing new technology, while perceived utility refers to the extent to which the new thing actually generates value.
Entering the mainstream
The issue of attracting and retaining users is likely to be central to the digital realm’s future. Social products often benefit from network effects, where their appeal to users is enhanced if their friends are also involved, so the question of whether digital gambling will succeed is closely tied to whether it can achieve critical mass of users.
For Koeberl, who wrote his doctoral dissertation on disruptive technologies, it boils down to two factors.
“The academic concept here is perceived simplicity of use, which indicates the possibility of accessing and utilizing this new technology,” he stated. “The other aspect is perceived utility, which indicates the extent to which the new thing actually generates value.”
This pertains to my prior remarks, regarding items that could function within the virtual realm. If I can already accomplish something, what is the purpose of doing it in the virtual realm?
“One requires both simplicity and perceived value. If either is absent, the novel technology will not achieve widespread acceptance.”
This is also why Han Mong is more dubious about the virtual realm than most individuals. “If one examines the entire gaming sector, it has not pushed the limits of technology,” he stated.
“Ultimately, we must satisfy the requirements of mass adoption and be financially astute. As an industry, mass adoption will dictate the development of technology and platforms.”
If the industry is awaiting the popularity of new technologies, those technologies might need to enhance sufficiently to be embraced by a broader audience. Specifically, Ehrlich highlighted the need for advancements in augmented or virtual reality technologies that can support a three-dimensional virtual realm.
“For years, companies have been showcasing three-dimensional slot machines at ICE, and the only thing I recall is experiencing a headache after a few minutes,” Ehrlich stated. “There are some novel products that feel like they are progressing in the right direction, but they are not quite there yet.”
Kober also has a negative experience with immersive technology.
This cutting-edge technology possesses immense potential in the years to come, but it’s not quite ready for prime time, he stated. “I require substantial eyewear, an extended battery duration of five hours, and it could potentially harm my vision or trigger a headache.”
**Identifying the Initial Adopters**
Metaverse enterprises are striving to attract a sufficient user base for their offerings. Who will be the pioneers in embracing this new realm? Given the metaverse’s resemblance to video games, a popular pastime among younger demographics, one might assume that youth would be the first to dive in.
However, Malakchi asserts that Evoplay’s data reveals a different narrative.
“We initially anticipated that individuals aged 18 to 23 would be the early adopters,” he remarked. “Our assumptions were incorrect. The individuals exhibiting the most interest are over 30.
“The average age of those intrigued by novel technologies and gaming is 34.”
**Guidelines and Regulations**
Securing user adoption is not the sole challenge. Regulatory frameworks also demand consideration.
“The United States is only beginning to establish regulations for online gaming,” Purcell pointed out. “How will they formulate rules for the metaverse?”
Kovacs emphasizes that these ambiguous regulations have deterred many gambling companies from initiating metaverse development.
When there’s a lack of clarity surrounding emerging technologies and the rules for those holding gaming licenses, which is their core business, they’re naturally going to be hesitant and proceed cautiously,” he stated.
Excessive regulation of metaverse gambling arises primarily from concerns that authorities will suppress it with stringent rules, rendering it effectively impractical. However, Taylor highlights that an entirely unregulated metaverse environment could result in significant harm.
“If the metaverse lacks the same scrutiny as the real world, frankly, it’s truly perilous,” he remarked. “In the end, everyone suffers if customers are injured.
“If safety measures aren’t in place, it will simply give these realms, especially online gambling, a very negative reputation.”
He also observed that while some regulatory bodies may be slow to adapt, the Isle of Man authorities (who granted the license for LynxBet) have been “progressive” in addressing new technologies, even though “numerous controls and policies must be followed to obtain a license.”
But for Ehrlich, the question of what is permitted and prohibited in the metaverse is less a regulatory matter than a philosophical one.
“I view this from two distinct perspectives; the first is regulators, governments, and us as a community, in terms of what we endorse and reject,” he said.
From a social standpoint, it could sway between the illicit and the legal. If rules and supervision are insufficient, it could turn into a lawless frontier, ultimately resulting in an undesirable outcome. The entities behind the virtual world, the major players, are already acutely aware of the social consequences of improper operations.
Metaverse Doubters
While there are many virtual world supporters in the gaming sphere, Koeberl is currently adopting a “wait and see” strategy. After the initial surge of interest following Facebook’s name change, online searches for the virtual world have declined significantly, and truly revolutionary products may be years away.
“For the virtual world, I currently perceive user experience and value as key obstacles,” he stated. “The technological preparedness is low, and certainly from a market readiness perspective, consider the challenges in KYC, AML, and even intellectual property and player protection.”
Hammon shares similar mixed sentiments about the matter. He points out that, at least for now, he struggles to envision a virtual world gaming opportunity that would compel him to participate.
“Platforms like Facebook have outlined their vision, but there are still numerous questions about how to realize it,” he mentioned. “If a gaming company today proposed a similar vision, there would still be many uncertainties.”
Therefore, at this point in time, metaverse gaming enterprises are attempting to persuade skeptics. The genuine evaluation of whether their offerings will achieve success could originate from beyond the realm of gaming.
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