Nonfungible tokens (NFTs) have grown in popularity since the release of CryptoKitties in 2017, with the industry projected to move more than $800 billion over the next two years.
Some of the most well-known use cases for NFTs are photo-by-trial projects such as the Bored Ape Yacht Club and game projects to earn. NFTs have also caught the attention of the sports industry, with professional sports leagues setting up their own platforms for fans to connect with their favorite teams or players, but that will be discussed later in this story.
NFTs are unique and non-exchangeable pieces of code stored on the blockchain. These sets of alphanumeric code can be associated with assets such as artwork or digital and physical goods. NFTs are created through a process known as minting, and creators can put a limit on the number of NFTs they want to TBEN, creating scarcity.
Scarcity is a phenomenon that has always applied to physical assets because they are physically built with finite resources. However, there has never been a scarcity of digital goods as they can be easily replicated. NFTs have changed this and we are now seeing a growing market for collectibles in the digital world.
How are NFTs used for fan engagement?
When it comes to sports, fans feel so strongly about their favorite player or teams that they associate with them in every way possible. Engagement ranges from watching or attending live games, purchasing merchandise, or attending signing events. Fans want to get closer to their favorite teams and players, providing opportunities for sports teams and leagues to generate additional revenue.
Sports leagues in particular have recognized the value of fan engagement and have continued to create platforms where fans can buy, own and trade digital souvenirs. A well-known example is the National Basketball League’s NBA Top Shots NFT marketplace, where fans can buy, sell, and trade basketball video clips. Video clips on the platform are known as NBA Top Shot Moments and each shows a different highlight of a basketball game. The marketplace was launched in 2020 as a joint venture between the NBA and Dapper Labs, makers of CryptoKitties. It generated more than $230 million in sales within a year of its launch.
Some video clips are sold in packs, similar to physical trading cards like Pokémon and Yu-Gi-Oh. There is also an element of gamification with different rarity levels ranging from ‘general’ to ‘legendary’ which is a standard system in role-playing games. The rarer video clips are more likely to command a higher price than the more common highlights, increasing their perceived collectible value.
The NBA isn’t alone when it comes to sports leagues building their own engagement platforms. National Football League and National Hockey League are working on their own NFT platforms, while Major League Baseball has already released its NFT marketplace.
It’s not just sports leagues that have built fan engagement platforms — the concept is proving popular with non-sports leagues entering the space. For example, Fanzee is an emerging platform that has raised $2 million to build a marketplace and ecosystem where sports fans can complete challenges such as quizzes and games to increase their fan level and trade NFT collectibles.
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As with NBA Top Shots, there is an element of gamification. In this case, sports clubs can create interactive challenges, such as quizzes based on past matches, to test how closely fans have followed the match. Additionally, fans can earn experience points and NFTs based on their game interaction. Experience points increase their “fan level”, which is displayed on a leaderboard, where fans earn prizes based on their rank.
“Gamification is a great way to drive engagement. Having a fun and exciting platforming experience helps draw people in. However, there has to be a story, even if it’s a light-hearted story like GoblinTown.’ Max Luck, ecosystem growth leader at the interoperability-focused Flare Network, told TBEN, adding:
“NFTs are quite unique in how they help keep communities active and engaged – or ‘sticky’, especially with secondary marketplaces popping up in different ecosystems and the potential for NFT use in different gaming metaverses. Also a great opportunity for memes.”
How are fan engagement platforms changing the sports industry?
Fan engagement platforms are bringing real world industries like collectibles to the web3 space. Non-functioning tokens are a great way to attract younger and more tech-savvy users by adding modern ways for fans to interact with their favorite teams and players, while also creating additional revenue streams for sports leagues.
Luck agrees that NFTs are a great way to engage young fans with their favorite teams and players. “NFTs are like marketing tools that have the power to bring newcomers to the game. This is especially true for younger fans who have collectibles on their phones and can share their enthusiasm and experiences with friends at school or college.”
“Today, technology can drive discovery, while previous generations may have watched sports with their families at home or in the stadium and developed their support there,” continued Luck. “The success of attracting newcomers would depend on how simple and easy platforms are. can make it for them to get their hands on their first NFTs with accessible UI/UX – and how prohibitive the cost is.”
Digital assets can have a significant effect on how close sports fans are to their favorite teams if used correctly. It will be easier for fans to keep up with the teams and athletes they care about most. This gives sports organizations the opportunity to use digital resources to their advantage. It won’t be surprising if most sports leagues have their own NFT platforms where fans can interact with blockchain-based assets in the coming years.
However, the focus should be on fan engagement rather than trying to make a quick buck simply by selling tokens. By focusing on fan engagement, these platforms may see increased adoption as fans are more likely to introduce new users to the platforms. This will also improve user retention as fans will be using these platforms for their personal enjoyment rather than trying to monetize by flipping tokens or digital assets they have purchased. If the bear market has taught us anything, speculative users always disappear once the market stops moving upward.
Félix Le Breton, digital revenue manager at French esports organization Team Vitality, told TBEN: “NFTs can be a good way to attract young fans as long as you stay away from the speculative aspect of them. Obviously the young generation is familiar with them. the principle of digital ownership and it is easy for them to get on board.”
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Platforms that take a user-first approach, focused on high engagement and user retention, will achieve the most success when it comes to fan engagement platforms, in addition to improving user education on how NFTs will also help bring the sports industry into the Web3 space . On average, 76% of avid sports fans worldwide are open to learning more about NFTs, so there is an excellent opportunity for sports industry organizations to introduce blockchain-based assets to their consumers.
NFTs can change the world of sports by bringing offline activities to the online world. In the past, fans collected trading cards, autographed T-shirts and footballs and traded printed photos of their favorite players. As the world becomes more digital, younger fans will find new ways to interact with their favorite teams and players through blockchain technology.