Our iGaming Futurologist Mark McGuinness – who has more than 20 years’ experience in iGaming and digital marketing – cuts through the hype to give his view on what the Metaverse could mean for the future of the industry.
Like a Marvel superhero movie, the marketing hype and billions of dollars involved in selling the notion of the Metaverse as the ‘next big thing’ is not all that it appears to be at first glance.
Perhaps the biggest smokescreen pumped out by the Metaverse spindoctors is that while it may sound like a brand new buzz word, it has in fact been around for at least 30 years.
Stepping back in time…..
Yes folks, sorry to burst the bubble but Captain America isn’t real, and the Metaverse concept dates back to 1992 when it featured in Neal Stephenson’s award-winning novel ‘Snow Crash’. His vision, when coining that phrase for the first time, was of a virtual world that was used to escape from the grim realities of a 21st century USA ripped apart by the combined forces of hyperinflation, extreme levels of inequality, and a virus. It’s no wonder that The Washington Post describes Stephenson as a visionary, and Snow Crash as being ‘like a bible to some people in Silicon Valley’.
Since Stephenson’s spookily accurate prediction of the future, fiction has moved closer to fact in the real world. In the 1990s Sega introduced Virtual Reality (VR) arcade machines – and in 2010 the Oculus Rift Headset for full 360-degree VR with Facebook later purchasing the company for $2billion. Fast-forward a bit more in our time machine and we see Pokémon GO augmented reality games, followed in the fall of 2021 by Facebook Inc morphing into Meta Platforms Inc. Not to be outdone, Apple introduced Lidar and are developing VR headsets to access the Metaverse. From an iGaming business development and marketing point of view, the lesson to learn from all of this is obvious: affiliates need to embrace it.
iGaming Crypto, NFTs, staking and more
Apart from the recent crypto market crashes, there has been a steady increase in the popularity of digital currencies such as bitcoin, and non-fungible token (NFTs), as new asset classes – all of which are part of the Metaverse’s supply chain. Affiliate marketing, which began way back in 1989, is an effective tool to increase awareness and distribution of a brand’s products and services via agents, intermediaries, and introducers promoting and selling a product in return for a fee or commission on each sale.
In effect, it’s a modern day version of a barter system in which getting paid for promoting a brand in NFTs or crypto is simply a method of payment in kind.
Will commission models change?
The jury is still out on this question. What is for certain already, however, is that many affiliates are justifiably unhappy with the ever-increasing net gaming revenue share deductions taken out by current fiat-based iGaming operators. This is not going to go away any time soon because, as the cost of living increases, it will get passed on down the supply chain. The major issue here is transparency, and indeed trust, regarding numerous parties taking a ‘cut’ of the revenue pie. With digital currencies built on blockchain, the transparency issues start to become less important as the components of the transaction are available in the blockchain ecosystem for all to review. Likewise, intermediaries and other third parties are likely to become less of a requirement in that supply chain which means, in theory at least, that more revenue should remain to be shared between the affiliate and the brand.
The next obvious question is about value: Are digital currencies a fair means of compensatory economics? This can be very subjective because, if you take the growth in digital NFT art or limited tokens to access collections or cosmetic items to power-up your avatar or gameplay, you might take the view that this could leave some poor soul carrying the can if their ‘assets’ turn out to be worthless.
An objective way to look at this scenario is to see it as simply one more commercial risk that both affiliate and the Metaverse brand need to discuss. In a sense, it’s no different to the existing fiat currency risk of being paid in one base currency, let’s say Euro, and converting the commissions to USD.
DAOs, marketplaces, and regulation
I have often heard conversations that there are too many digital marketplaces, too many tokens, and so forth. Throughout the history of human civilisation, indeed ever since trade and commerce first began, there have been multiple marketplaces for all sorts of commodities in the value exchange supply chain. Some have persisted, some have disappeared. In that context, the issue isn’t about there being too many marketplaces, it is about who controls the trading chain.
That’s the whole point of Decentralized Autonomous Organizations (DAOs) which are here to stay. The rise of the blockchain allows like-minded people to use the technology and agree a smart contract outlining the purpose of that exchange, where no single person(s) or entity has or can exhibit control.
Looking ahead, new models will develop and the sheer size of the Metaverse prize will see the affiliate industry pushed forwards by those that embrace it. This means that there will be opportunities created by innovations which meet the demands of both digital customers and brands looking to reach those audiences with digital currencies or assets.