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Online gaming interview: Virtual Game Worlds founder, Laurence Escalante
- — 01 May, 2012 17:35
Before Laurence Escalante started up him online initiative, Virtual Game Worlds (VGW), he was in financial planning for ten years and an actuarial student before that. As such, gambling math is familiar territory for him. In the area of game development, he has founded and been involved with globally distributed game studios over the last seven years, predominantly in the Philippines. Since Escalante was exposed to gambling, game development, corporate finance, start-ups, global markets, laws and economics, in one way or another for a while, he felt that VGW (www.virtualgamingworlds.com) came together quite naturally once the idea formed.
How did the concept of VGW come up?
Virtual Game Worlds founder, Laurence Escalante (LE): Like many young guys, I played a regular home poker game with my best friends over beers, with small “buy-ins,” where we would play socially for small stakes which increased the excitement and enjoyment of a simple social game. When they moved to Melbourne for their careers, these games stopped but I found it crazy that we could still play World of Warcraft together and kill a dragon in a fantastic virtual world. Yet at the same time, we couldn't replicate a quality game experience with real money poker wagers inside a multiplayer game environment.
How did the idea evolve from there?
LE: I looked into the idea & opportunity and found it to be so potentially powerful & disruptive, and was amazed it hadn't been done. So I founded it, arranged the seed funding, formed a formidable early board and team, raised more early stage funding, and have made the great progress that culminated in our reception at launch a few weeks ago. We’re now looking forward to becoming a bona fide online casino operator with gambling revenues in a matter of weeks.
Why do you feel the time is now for VGW?
LE: The rise and rise of social gaming, with Zynga in particular, has been watched by the online gambling industry for a number of years. Their poker game on Facebook is larger than all real money poker operations in the world, put together. With the typical social gamer being a 40 year old female, not unlike the typical slots and bingo player, the intersection of social gaming and gambling is simply too natural and powerful to ignore.
What hurdles did you initially encounter?
LE: The convoluted and ever-changing legal environment for online gambling worldwide has held most large gaming and gambling operators from truly exploring gaming "convergence." We were founded from day one to explore this convergence, a classic “Blue Ocean” strategy. Fortunately for us, our market timing has been perfect, as only now are large offline and online gambling operators really making starting to make a concerted push into social Gaming, and vice versa.
On what do you base that opinion on?
LE: Case in point, IGT, the largest slots maker worldwide, purchased Doubledown Casino, a Facebook virtual currency only casino, for $500 million a few months back. Doubledown is the closest thing to a similar product to us, but it has never been built to convert virtual gamers to real money gamblers, where the platform and corporate structure, in that it is offshore, and licenses and so on are dramatically different to virtual currency gaming.
You attended Jason Calacanis' launch conference in San Francisco in March. What was the response to VGW there?
LE: It was overwhelming positive regarding the potential of our business.We had many of the elite names in Silicon Valley citing us as a multi-billion dollar business and we were the most awarded company in our judging segment
What was your main takeaway from the event?
LE: Most U.S. Venture Capitalists have restrictions on what they can invest in, and gambling is prohibited for most US VCs. Whilst limiting our options for growth funding out of Silicon Valley, it also answered my question as to why a similar business like ours, which is relatively simple in concept, had not been built in the U.S., the answer being it would never get off the ground as VCs cannot fund it.
Following the conference, what has VGW been focusing on?
LE: We've been accepted to another conference in San Francisco, called Global iGaming Summit and Expo. This one is specifically an online gambling conference where gambling majors gather to discuss online developments. So we've planned to start major launch campaigns after this event.
What else have you been doing in the meantime?
LE: We've really focused on closing our current $5 million expansion capital raising round, beginning the process of transitioning to a public, unlisted company to enable smaller investors to participate in our exciting story, and speaking to a number of investors across Perth, Australia, Singapore and some in the U.S. We expect to transition and for the round to close in the next few weeks.
Due to the laws in U.S. in regards to gambling, what will be VGW's strategy for that region going forward?
LE: As with all non-legalised countries, we will launch our virtual currency that is non-cashout to play games, with the view to converting these players only once it is legalised. Currently, the U.S. is making great strides towards regulation on a state by state basis. In fact, Nevada is the first state to have a functioning online poker regime, and operators, including us, will be live in the state before the end of the year.
Where do you have planned for the near future?
LE: In the next six months, we expect to make great progress, hopefully closing our $5 million expansion round. This is to facilitate the complete porting of the casino platform and 20 games to mobile devices such as iOs and Android, apply for about half a dozen European domestic licenses, engage in large scale user acquisition and marketing campaigns, apply for the Nevada poker license, and build out additional games on the platform.
Where would you like to see VGW in 12 months time?
LE: In 12 months time, we should be close to looking at listing on an exchange, be it the ASX, HKSE or if progress is strong, the NASDAQ. This is to primarily to facilitate our ambitious growth plans to look at strategic acquisitions in the games space, where we can integrate responsible gambling elements inside established games franchises where the convergence makes the most sense.
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