Lars Rensing, CEO of enterprise blockchain provider Protokol, discusses how esports teams are opening up new revenue streams by using blockchain to create unique digital collectibles.
Esports has seen a tremendous amount of growth over the past decade. The ability to hold successful events online as well as in person has uniquely positioned it to appeal to an enormous network of global fans as well as a younger, digitally native fanbase. And as the pandemic forced most events online, this has become even more the case. While being a digital sport undoubtedly has huge advantages, it also comes with challenges. A digitally native fanbase is harder to monetize than previous generations of traditional sports fans. Revenue streams like merchandising can often be less profitable, as well the obvious lack of income streams such as ticket sales and in-venue items like food and drink. As a result, teams have had to get creative when looking at appealing products and services for fans who generally live online, which still have the exclusivity and appeal of a signed baseball or trading card.
Some teams have turned to blockchain as a solution. NFTs have shot into the public eye in the past few months, and for good reason. The technology can allow teams to create either unique or limited-edition digital collectibles which fans can purchase and which can’t be can’t be destroyed, replicated or forged. This has already proved highly profitable for digitally native fans, as we saw with the wild popularity of the recent NBA Top Shots launch. Esports teams can take advantage of this by creating collectibles like digital trading cards of their players for their fans to collect, opening up a completely new revenue stream. These solutions are already being used successfully monetise fanbases – people have already spent more than $230 million buying and trading the Top Shots NBA highlights. Teams can also tie these collectibles. into their own marketing initiatives, releasing limited edition cards for big matches, tournaments, or the signing of new players.
Teams can take this one step further by partnering with game developers to release exclusive in-game assets in relation to their team. Teams can create exclusive digital versions of their shirts or badges, in the same way that football teams will release exclusive shirts around events like the World Cup. For esports, this can also solve some longstanding issues around in-game assets. Until now in the gaming world, in-game purchases made to buy special objects like guns or swords have been generally one-time, non-transferable investments. This has been a bugbear for fans for years, who have been calling for more easily transferable assets. With blockchain, this no longer needs to be the case. The technology can be used to give players full ownership of these items, allowing them to take the items out of their original games, sell them on for profit outside of their gaming sphere, or even use them in other games.
Teams that do this will be well placed to continue the astronomic growth of the industry, while keeping fans engaged, sponsors happy, and opening up new revenue streams.