NFTs are no longer foreign to the world of sports. Why? Several top sports brands and events have seen the importance of incorporating this new class of assets into their operations.
With a sales volume of $1 billion, the NBA Top Shot, an online game that allows users to collect and trade memorable NBA highlight cards, has demonstrated the remarkable potential of merging sports and NFTs.
Another example is how the Australian Open 2022 made history as the first major sports event to use NFTs for capturing real-time moments. By linking NFTs to the court, the event created 6,776 virtual pitches, with real game-defining shots adding value to these NFTs, which garnered direct sales of over $700,000 in minutes.
Two other instances mentioned by a World Economic Forum report on NFTs in sports are Sorare, a fantasy sports game that uses NFT-based collectables to represent real-life players, and LaLiga Land, a virtual reality theme park, which offers multiple leisure activities for football and Web3 enthusiasts.
The WEF believes that NFTs have become a powerful tool for sports clubs to boost customer engagement and build dedicated fan communities. In the report, it also revealed a few takeaways on how the use of NFTs in sports has evolved.
Key lessons learned
WEF stated that there are three fundamental lessons to reflect on when thinking about how NFTs have impacted the world of sports. First, native NFT brands have taken the initiative to connect with sports firms on deals that has seen the introduction of NFTs into the sports world.
The report revealed that this method has also “benefited both parties and helped sports brands avoid the complexity of NFTs and compensate for the lack of internal knowledge.”
Another hint is that the industry is shifting focus from short-term monetization to long-term value creation. NFTs provide innovative ways to monetize intellectual property (IP) and enhance customer engagement.
“The main pillars supporting this transition include focusing on customer value add, sustainable revenue-generating initiatives and new ways of engagement through NFTs,” WEF said.
Main stakeholders are working on long-term strategies that focus on customer value, sustainable revenue, and engaging fans in new ways instead of irrelevant speculative projects with less value to offer to users.
Lastly, it added that going forward, there is a need for NFT initiatives in sports to be launched with a GTM system as well as paying attention to user experience. A Go-To-Market (GTM) strategy is a well-thought-out blueprint outlining how an organization can effectively connect with customers, persuading them to make a purchase of their product or service and, in turn, secure a competitive edge in the market.
The focus should be designing and launching a project that is an extension of the company’s mission and not in isolation. Additionally, WEF said it’s important to also launch such projects by starting with a small group of dedicated users before it is expanded to include others.
“By working closely with this core group initially and refining the NFT value proposition, projects optimize their impact and increase chances of success,” it said.
Encouraging brands, it emphasized the need for ease of use. “Many NFT launches to date have delivered inconsistent experiences, poor user interface (UI)/user experience (UX) and exacerbated the fragmentation in fan engagement,” WEF said.
“Successful brands simplify their approach by avoiding complex jargon and establishing white-labelled marketplaces.”
