Does NFT = WTF for you? It shouldn’t if you work in sports or gaming. Time to get clued up about the impact of non-fungible tokens on these sectors.

2022 appears to be the year where non-fungible tokens will go mainstream. While many still wonder if NFTs are here to stay, some sport and gaming companies have made leaps in understanding their value. As they lead the NFT adoption wave, a clearer picture emerges on how businesses in digital entertainment can gain an edge with NFTs.

What Are NFTs Anyway?

NFTs are digital assets that represent tangible objects, such as sports cards, and are traded online, typically using cryptocurrency. As far as similarities between NFTs and cryptocurrency go, they’re usually encoded with the same software as several cryptos, but that’s about it. 

One of the most appealing characteristics of NFTs is that there is a reduced risk of fraud due to the fact that ownership is tracked on the blockchain. 

Strong market growth in 2022

As predicted by Deloitte Global, more than US$2 billion will be generated from NFTs for sports media alone this year. The global professional services firm also expects between 4 – 5 million sports fans to have purchased or been gifted an NFT sports collectible by the end of 2022. 

This is major news that indicates the upward trajectory of NFT adoption in sports. The driving factor behind the industry embracing these cryptographic tokens is to enhance the experience of sport fans across the globe and increase engagement.

How Are Sports Teams And Players Getting Into NFTs?

While many sports are dipping their toes into the NFT pool, it’s actually soccer teams and players that are doing the most to incorporate NFTs for their fans and spectators.

Jumping onto the NFT bandwagon at rapid speed is AC Milan, an Italian football club, which has launched an NFT campaign of 100 tokens that are meant to act as loyalty tools. The purpose of these loyalty NFTs is to give fans the chance to access exclusive rewards and experiences.  

It’s not just sports clubs, but sports players too, who are getting in on the NFT fun. Soccer star Wayne Rooney is the first athlete to join the world’s first multi-athlete generative NFT collection, Blockasset’s Legends NFT collection. This collection will be made up of a whopping 10,000 NFTS, distributed between its athletes with 2,000 NFTs per athlete. 

The opportunities are endless when individuals take advantage of the opportunity to monetize their work or merchandise with blockchain and NFT technology! These tokens have been likened to the digital version of traditional sports trading cards – but they’re new and improved and have a lot more exciting features that go with it. Some examples of sports NFTs include:

• Still images with digital stills or video, 
• Cardboard with pixels, 
• Binders with digital displays,
• Collectors’ fairs with online trading platforms, and 
• Third-party authentication agencies with blockchain

New Revenue Streams

The art sector provided the first example of short video clips sold for millions as NFTs. This trend is also taking-off in sport and gaming, with initiatives involving limited-edition video clips of sporting moments or player cards this year. The value of these would depend on how famous the player is, how iconic the sporting moment is and how significant the match or event is. All in all, there is a lot of money to be made… in several ways.

Specifically in the sport industry, the options are quite impressive and ever growing. Some of the ways to generate revenue through NFTs include the following:

• The owner of platforms that sell NFTs could stipulate in the NFT contract that a commission fee needs to be paid to them for each transaction that takes place.
• The current owners could also get real time remuneration of the pre-programmed rights if the smart contracts enabling the NFTs are accessed via cryptocurrency. 

Earn An Income By Playing Games?!

As expected, the circumstances plaguing the world have forced us to remain indoors and to depend on technology to replace our physical interactions and engagement. This created a surge in demand for the gaming industry, but luckily, they had a trick up their sleeve. Cue the grand entrance of NFTs into the gaming industry. In my personal opinion, this NFT and gaming combo is a match made in heaven!

A prime example of NFT gamification is GameFi, which allows gamers to earn digital assets, such as plots of land, by playing. GameFi games keep gamers’ assets stored on a distributed network and they operate independently of any single organisation, therefore derisking the digital assets. 

The integration of NFTs into the gaming industry is transformational to say the least. Where traditional gaming was a hobby that gained nothing but enjoyment, the NFT gamification twist allows gamers to earn revenue by playing through the Play-To-Earn model. 

An example of a successful online blockchain game is CryptoKitties where players were involved in trading and adopting virtual cats. The game’s monetisation saw a whopping $12.5 million investment. Some of the cats were sold for around $100,000 each. I’m convinced…are you?

Extra Time: NFT Businesses to Watch in 2022 

It’s clear we’ve just seen the tip of the NFT iceberg in the sports and gaming industry. Some current leaders will accelerate their growth and exciting newcomers will thrive. Here are 5 interesting sports or gaming NTF platforms to keep an eye on in 2022 :  

• Axie Infinity: An already established NFT-based online video game.
• NBA Top Shot: A marketplace to trade officially-licenced NBA clips.
• Sorare: A sport fantasy game based on digital player cards.
• Socios.com: A fan token platform connecting sports teams and their supporters.
• Autograph.io: A new NFF sport venture led by NFL GOAT Tom Brady.

More and more companies will join the trend and try to get a share of the NFT growth, so the best is yet to come!

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Written by Prenelle Pillay.
Photo by Alex Andrews