In 2020, just as the gaming, e-sports, and entertainment industries are taking a step forward with the help of the “home economy”, the NFT market will usher in its own spring. For a time, celebrities, companies, and sports leagues from all walks of life began to join the game, launching their own NFT products, which accelerated the market boom.
As a digital industry, e-sports will naturally not give up this opportunity.
On April 7, the well-known foreign game anchor “Tfue” launched his first NFT limited series collection, opening the first of the game live broadcast session to enter the NFT market. This NFT collection series called “King of Gaming” contains pictures and videos created around the three games of “Fortnite”, “Minecraft” and “Call of Duty”. Since then, 100T, a well-known North American e-sports organization, also announced that it will launch corresponding NFT products.
On the traditional sports side, in addition to the NBA TopShot that has swept the world, 7-time Super Bowl champion Tom Brady announced that it will establish an NFT platform.
However, due to the sudden popularity and capital boost, there have also been polarizing discussions surrounding the NFT market. Some people think that this is a new type of IQ tax with a huge bubble. But whether NFT is an IQ tax is not the focus of our article. What we can do is to give some thoughts on NFT and e-sports through a macro perspective.
01 What is NFT?
NFT, the full name is non fungible tokens, that is, non-homogeneous tokens, is an encrypted digital asset verified based on blockchain technology, which is unique and non-replicable.
In short, NFTs are digital assets on the blockchain, which can be created in the form of “collection cards”, “video collections”, “art works” and even “virtual pets”. The reason why NFTs have received such high attention and their prices have soared because they are scarce in themselves, can be created as unique or limited edition items, and have an unalterable history of ownership. The immutability of the blockchain also means that NFTs can never be copied, forged or destroyed, and they are more liquid and easier to conduct peer-to-peer transactions.
The counterpart of non-homogeneity is homogenization tokens, such as the well-known Bitcoin. Generally speaking, there is essentially no difference between the two five yuan renminbi, but the numbers on the two renminbi are different. The former is homogenization, while the latter is non-homogeneity. There are no two renminbi with the same serial number in the world, which makes it unique.
In terms of time, the emergence of NFT can be traced back to 2012. At that time, the first NFT-like token appeared on the crypto market-colored coins. The appearance of colored coins laid the foundation for the development of NFT.
And the first time that NFT received a lot of attention was a game called “cryptocat” in 2017. This development game built on the Ethereum network allows players to trade cats of different forms. Each cat is unique. The mating between cats can form new and more valuable cats.
In recent months, a series of events have completely ushered in an outbreak of NFT and entered the mainstream market.
On March 11, a digital work called “Everydays: The First 5000 Days” was sold at Christie’s auction platform for a sky-high price of US$69 million through the NFT form, which stood at the top of NFT commodity prices. Subsequently, the first tweet issued by Twitter founder Jack Dorsey in 2006 was recently sold in the form of NFT for $2.9 million.
Under the bombardment of the titles of various horror articles, “Melon Eaters” also learned of the existence of NFT. Of course, just like every small circle that achieves “breaking the circle”, there are also opinions about NFTs that support and not support. For example, in the eyes of many people, NFT is just another act of cutting leeks, full of bubbles. It is difficult for us to give an answer to this question, but it is undeniable that NFT is becoming the next global trend. The emergence of this trend is of great significance to the e-sports industry.
02 NFT & E-sports, the collision of aboriginal industries in the two-digit era
NFT and the e-sports industry can create beautiful sparks, which should not surprise us.
Most e-sports fans, as “indigenous people” on the Internet, have been dealing with digital products ever since they “entered the pit”. The sensitivity to digital products is also relatively high. For example, in their view, buying a digital album is a collection behavior, and it does not have to appear in a physical way.
However, digital products on the Internet can be copied and pasted to make countless copies, which also makes them not scarce. NFT creates a kind of artificial scarcity, and obtains value through this scarcity, which can also satisfy fans’ desire to collect.
Imagine if you take Uzi’s first five kills in the professional arena and make a small video through NFT technology and give it a unique number, then this video that has been watched countless times will gain collection value and be able to Circulate in the market.
As a result, alliances and clubs can open up new revenue points through forms such as IP authorization for NFT products. And zoom in to the entire industry, which can make the plate bigger and bring new thinking to business and monetization models.
Through NFT products, not only fans can satisfy their desire to collect, but also leagues and clubs can make money. Although to a certain extent, this behavior will be regarded as “money trapping”, but just like the purchase and transaction of every collection, it is always an act of willingness to fight and suffer.
For example, some time ago, a 1952 baseball star card sold for a sky-high price of 5.2 million U.S. dollars, setting a new price record in the star card market. When most people saw this news, their first reaction might be “This person is crazy”, but the buyer himself disagreed. In an interview with The Athletic, he thought he had made a very successful collection and investment.
Looking at traditional sports, we can also find some examples to provide references for the e-sports industry.
In 2019, the NBA reached an authorized cooperation with Dapper Labs, the developer of the “cryptocat”, which developed a new NFT product based on the blockchain-NBA Top Shot.
Simply put, NBA Top Shot is a digital star card. The content of the card is mainly the iconic actions of some star players, including pictures and videos. NBA fans buy, sell, trade, and collect digitized iconic moves of the season. You can spend money to buy a card pack, which contains different star collections. According to the classic degree of the stars and the content of the collection, the collection value and price are also very different.
Earlier, when James played fast against the Rockets on February 7, 2020, the wonderful moment of the folding back buckle sold for nearly $50,000. According to data, since 2020, Top Shot has created $230 million in revenue for Dapper Labs. It is reported that based on the agreement between the NBA and Dapper Labs, the NBA can get 10%-15% of its sales, which is a lot of money.
NBA Mavericks owner Mark Cuban even asserted: “In the next ten years, Top Shot will likely become the NBA’s top three sources of income.”
In the e-sports industry, there has not yet been an agreement at this level (alliance, manufacturer), but clubs and individual players have begun to launch corresponding NFT products. In March, the two-time TI champion OG club reached a cooperation with Nfity Gateway. Based on NFT technology, the two parties launched the NFT series card package with the theme of the 2018 International Invitational (TI8) ring. The card pack contains rings of different colors and designs, with different values. After the purchase, you can also re-trade and obtain the corresponding economic benefits. According to the Nifty Gateway website, this series of card packs has been sold out and can only be bought in the secondary market.
On March 20th, Diamondcon, a player of the New York Subliners team in the Call of Duty League (OWL), released a video indicating that it will launch its own NFT product next. It can be seen from the preview video that his upcoming NFT product contains his exciting moments in the game and live broadcast, which are similar to the content in the NBA Top Shot. If Diamondcon’s NFT products can be successfully released, then this is definitely a milestone moment for the gaming industry. In the future, we may be able to see more similar content appear, and then promote the direct participation of manufacturers.
03 E-sports finally found the key to victory to the fan economy?
In fact, NFT is no longer a new concept in the e-sports circle. Another “playing method” of it has already appeared and has taken hold.
This is the fan token.
For a long time, the e-sports industry has faced the problem of weak realization of the C-side (fan side). As it is still in the early stages of development, there is still a huge gap in the derivatives sector in the e-sports industry. The quality and variety of products cannot meet all the needs of fans, and it cannot form a mature derivatives industry chain like traditional sports, resulting in weak realization of the C-side. . To this end, many clubs have also made different attempts, such as membership system, membership platform and so on.
The emergence of fan tokens provides a solution to this problem that may be the most likely to succeed.
In this market, there is a leading company called Chiliz, their main focus is the sports industry, which includes both traditional sports and e-sports. They launched a fan incentive platform called Socios.com, where fans can buy tokens to participate in the decision-making of the club.
Last year, the OG Club launched the “$OG” fan tokens on this website, and the price of each token is about $1. These tokens will always exist in the user account, and fans who have purchased the tokens can participate in the voting of the OG team, such as the logo styles that appear in the game. In addition, they can also win points rewards and have the opportunity to get tickets, signed T-shirts and other peripheral products.
In addition to OG, a number of e-sports clubs such as Gen.G, Alliance, and Navi have also launched their own fan tokens.
For fans, this is an upgrade of the way of interacting with clubs and players, just like the previous one-way communication from “TV, magazines” to the two-way communication of Internet social media. Through tokens, fans can directly participate in the team’s decision-making, not just “comment likes” on social media. To a certain extent, this can also increase the enthusiasm of fan interaction.
After all, as a sports fan, we will have the desire to “point the country” for the club at some point, and fan tokens provide this possibility. For the club, this provides a new mode of commercial realization. Moreover, compared to NFT products in the form of NBA Top Shot, fan tokens are more likely to be recognized by fans and society at this stage.
However, regardless of any form of NFT product, the current common problem is that the threshold is high. You need to have a certain understanding of the “coin circle” to make the corresponding purchase. The popularity of the product is not high. In addition to the NBA Top Shot, there are no particularly successful examples in the traditional sports and e-sports industries.
Therefore, at the current node, the combination of NFT and e-sports is still only a trend, which means that the future is not the present. Perhaps when the e-sports field appears like “Bleep sky-high price painting”, “Twitter founder sky-high price Twitter” or “Musk” to detonate people or things, the industry and fans may view this new issue from a different perspective thing.
But in the final analysis, whether it is NFT products or fan tokens, it is an extension of the fan economy. Behind this is the changes in the mode of interaction between clubs and fans, fan demands, and content production mechanisms. “How to meet the needs of fans” is the core issue that the industry needs to think about. It ranges from individual players and clubs to alliances. With manufacturers, the e-sports industry will only grow stronger only if the answer to this question is figured out clearly and presented in a reasonable way.
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.