In 2021, a metaverse-based casino company made headlines after raking in $7.5 million in revenue in just a three-month period, taking bets from as many as 6,000 virtual avatars a day – each avatar representing a real-world online gamer.
The casino, named ICE Poker Casino, exists only in the virtual 3D computer-generated world called Decentraland. It is today, one of many metaverse casinos found in one of many metaverse worlds.
But what exactly is a metaverse casino? What is the metaverse? How does this differ from a traditional online casino? And what are the opportunities for the traditional brick-and-mortar casinos?
In our two-part series, AGB, along with the help of industry-leading tech mind Earle Hall, explains what the metaverse is and its relevance is for both the online and land-based gaming industry.
What is the ‘metaverse’
“The internet has evolved from text to graphics, and from graphics to interactive forms and now commerce. Metaverse is the next stage of this evolution where the internet will evolve into a three-dimensional experience to bring more virtual reality to the current 2D experience.”
Picture what a user does when navigating a traditional online casino. First, they explore a number of potential gambling websites. They’ll then create an account on their website of choice, log in, make their first deposit, and then navigate the menu system to find their game of choice and start playing. All of this takes place on static web pages on their computer or mobile phone screens.
The metaverse takes this same experience and turns it into something much more social and immersive than ever before.
“Metaverse is a media-rich, three-dimensional world where a person’s ‘digital twin’ i.e. an in-game avatar, is used to navigate and explore the metaverse,” said Hall.
In the example above, rather than clicking a link to a gaming website, imagine the person’s avatar is instead standing on the virtual equivalent of The Las Vegas Strip’.
From the strip, virtual casinos stretch as far as the eye can see. The player, having never gambled on the metaverse before, picks a virtual casino with the most appealing exterior. It also happens to be the one with the most foot traffic (avatars walking in and out of the entrance).
Once inside, they are met with a receptionist – an avatar controlled by a real-life employee of the casino, who can assist the player on where to go. They walk to a busiest-looking roulette table where players are happily chatting with one another. The player says hello, drags a virtual chip from their on-screen crypto wallet, and places their first bet on the table. A dealer, also an avatar who is controlled by a real employee of the virtual casino, is operating the table.
Such is the experience that metaverse casino companies, such as Decentral Games are envisioning.
“Think of a video game approach to the Internet rather than a navigational approach. This is the basic premise of the metaverse,” added Hall.
The metaverse today
Hall says it is important to remember that the metaverse is in its infancy stage. Avatars, virtual reality, and all of the other key benefits of the Metaverse are emerging, evolving, and maturing.
There are countless developers vying to become the “ultimate metaverse.” Facebook (now known as Meta) is one of them. Decentraland, The SandBox, and Cryptoboxels – are examples of blockchain-powered metaverses which tout themselves as being completely user-built and decentralized.
In our experience touring one of these metaverses, Decentraland, we found it to be bare of other players. Meta’s Horizon Worlds is only available in North America and Canada, whilst The Sandbox has only been made available on a limited testing basis.
Zuckerberg said he expects his company’s metaverse project, known as Horizon Worlds, to become mainstream in around 5 to 10 years.
“However, make no mistake, the Metaverse is the next iteration of the internet where reality WILL meet virtual reality,” says Hall.
Why is virtual land selling for millions?
Despite its emptiness, it is hard to ignore the metaverse when virtual plots of land inside of them are selling for millions of dollars with some real estate prices surpassing that of the real world in some cases.
Last year, the Metaverse Group, which touts itself as the world’s first metaverse real estate company paid a record US$2.4 million for a plot of land located in a high-traffic fashion district in Decentraland’s Metaverse.
Featured in an article from USA Today, Metaverse CEO Andrew Kiguel once explained that the value of real estate comes from how much potential virtual foot traffic it can benefit from. Kiguel plans to use the land to host virtual fashion shows in collaboration with luxury brands.
“There are areas when you first go into the metaverse where people congregate — those areas would certainly be a lot more valuable than the areas that don’t have any events going on,” said Kiguel.
Thus, in a way, buying virtual real estate is no different from taking a banner ad on the front page of a mainstream news website, or securing a domain name in the early stages of the internet.
“Think about the board game Monopoly. We just bought Boardwalk and the surrounding area,” Kiguel said. “Areas, where people congregate, are far more valuable for advertisers and retailers to find ways to get in there to access that demographic.”
What is virtual land being used for?
Broadly speaking, virtual plots of land in the metaverse can be used for similar purposes as land in the real world.
“Virtual products and services that you use every day will find themselves in virtual stores on virtual land with a value that is associated with the traffic and congregation of avatars in the Metaverse,” explains Hall.
Brands can buy virtual land to create virtual stores and other experiences to enhance sales and/or visibility of their own real-world products and services.
Virtual land can be used as an income stream of their own, for example, charging entry for a movie premiere in a virtual cinema, or an NFT art gallery, or a VIP-only music concert. It could also become, as per our earlier example, a virtual online casino.
Other options include renting out the space to brands that missed out on the initial sale or simply be held like any other investment property, sold at a later date for a profit.
Part two of the series will uncover the opportunities the gaming industry has in the metaverse space, including examples of gaming companies who are already investing in the space today.