Non-fungible tokens (NFTs) have grown in popularity since the release of CryptoKitties in 2017, and the industry is expected to exceed $800 billion in size within the next two years.
Some of the most well-known use cases for NFTs are proof-of-picture projects such as Bored Ape Yacht Club and game money-making game projects. NFTs have also caught the attention of the sports industry, with professional sports leagues building their own platforms to allow fans to interact with their favorite teams or players, but this will be discussed later in this article.
NFTs are unique and non-interchangeable pieces of code stored on the blockchain. These strings of alphanumeric codes can be linked to assets such as artwork or digital and physical goods. NFTs are created through a process called minting, where creators can set a limit on the number of NFTs they want to mint, creating scarcity.
Scarcity is a phenomenon that has always applied to physical assets because they are physically built with limited resources. However, digital goods are never scarce because they can be easily copied. NFTs changed that 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 team that they interact with them in every possible way. Participation can include watching or participating in live games, purchasing merchandise, or participating in contracted events. Fans want to be closer to their favorite teams and players, which provides opportunities for sports teams and leagues to generate additional revenue.
Sports leagues, in particular, have noticed the value of fan engagement and continue to create platforms where fans can buy, own and trade digital memorabilia. 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. The video clips on the platform are known as the NBA’s best shooting moments, and each clip shows a different highlight of the basketball game. The marketplace launched in 2020 as a joint venture between the NBA and CryptoKitties creator Dapper Labs. 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’s also a gamification element, with different rarity levels, from “common” to “legendary,” which is a standard system in role-playing games. Rare video clips are more likely to command higher prices than more common highlights, increasing their perceived value as collectibles.
The NBA is not alone when it comes to sports leagues building their own engagement platforms. The NFL and National Hockey League are developing their own NFT platforms, while Major League Baseball has released NFT marketplaces.
It’s not just sports leagues building fan engagement platforms — the concept has proven popular among non-sports league organizations entering the space. For example, Fanzee is an upcoming platform that raised $2 million to build a marketplace and ecosystem where sports fans can complete challenges like quizzes and games to increase their fandom and trade NFT collectibles.
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Similar to NBA Top Shots, there are elements of gamification. In this case, sports clubs can create interactive challenges, such as quizzes based on previous games, to test fans’ attention to the game. Additionally, fans can earn experience points and NFTs based on their game interactions. Experience points increase their “Fan Rank,” which is displayed on a leaderboard, and fans receive prizes based on their ranking.
“Gamification is a great way to drive engagement. Having a fun and exciting platform experience helps attract people. But there has to be a story, even if it’s a lighthearted one like GoblinTown. Focused on interoperability Max Luck, head of ecosystem growth at Flare Network, told Cointelegraph, adding:
“NFTs are very unique in helping communities stay active and engaged – or ‘sticky’, especially with the emergence of secondary markets in different ecosystems and the potential for NFTs to be used in various gaming metaverses. Also, it’s a meme an important opportunity.”
How are fan interaction platforms changing the sports industry?
Fan engagement platforms are bringing real-world industries like collectibles to the Web3 space. Non-fungible tokens are a great way to attract younger and more tech-savvy users, adding a modern way for fans to interact with their favorite teams and players, while also creating an additional revenue stream for sports leagues.
Luck agrees that NFTs are a great way for young fans to engage with their favorite teams and players, “NFTs are a bit like a marketing tool that brings new people into the game. This is especially true among young fans who have collectibles on their phones, Can share their passion and experience with friends at school or college.”
“Today, technology can drive discovery, whereas previous generations might have watched sports at home or at a stadium with their family and found support there,” Luck continued. “The success of attracting newcomers will depend on the ease of use of the platform. Let them get their first NFT with accessible UI/UX – and how prohibitive the cost is.”
When used properly, digital assets can have a significant impact on how close sports fans are to their favorite teams. Fans will have an easier time keeping up with the teams and athletes they care about most. Because of this, sports organizations have the opportunity to use digital assets to their advantage. It wouldn’t be surprising if most sports leagues had their own NFT platforms where fans could interact with blockchain-based assets for years to come.
However, the focus should be on fan engagement rather than just selling tokens to make a quick buck. By focusing on fan engagement, these platforms could see more adoption as fans are more likely to introduce new users to the platform. This will also increase user retention, as fans will use these platforms for personal pleasure rather than trying to make money by flipping the tokens or digital assets they buy. If bear markets have taught us anything, speculative users always disappear when markets stop rising.
Félix Le Breton, digital revenue manager at French esports organization Team Vitality, told Cointelegraph, “As long as you stay away from the speculative side, NFTs can be a great way to attract younger fans. Obviously, the younger generation is familiar with the principles of digital ownership, and they can easily get started.”
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Adopting a user-first approach, platforms that focus on high engagement and user retention rates will have the most success in terms of fan engagement platforms, and, in addition to improving user education, revolve around how NFTs can help bring the sports industry into the Web3 realm. On average, 76% of the world’s avid sports fans would like to learn more about NFTs, so organizations in the sports industry have an excellent opportunity 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 exchanged printed photos of their favorite players. As the world becomes increasingly digital, young fans will find new ways to interact with their favorite teams and players through blockchain technology.