NFTs and the metaverse have emerged as the biggest trends in crypto for the past few months. However, interest is dying down. Could the sports industry help to increase engagement?
The metaverse and NFTs have been a hot topic of conversation for the past few months. However, if you have been keen on the developments of these technologies, you would have noticed that the talks have slowly died down, especially with the current crypto market crash.
A quick look at Google search trends and you will see a similar pattern as the previous surge in usage of the two buzzwords in the popular search engine takes on a sharp decline.
The same is true for the gaming space where NFTs, which were previously seen as a hot commodity that would soon revolutionize the entire sector is now being met with a more tempered response as the hype starts to wear off.
According to statistics, nearly 70% of gamers hate NFTs, and a growing majority don’t want NFTs to be brought into mainstream gaming. In the perspective of most gamers, NFTs and the metaverse are nothing more than a fad that will eventually die out in time.
Despite their initial meteoric rise to the top of mainstream conversation (especially after Facebook changed its name to Meta), metaverse and NFT talks are now reserved for only a small subsection of people within the blockchain and crypto industry. This is mainly due to the proliferation of scams and Ponzi schemes that have given the industry a bad name.
In addition, the general public is also getting savvier and is now aware that most of these technologies are still in their infancy and are not ready for mass adoption. Meta (formerly known as Facebook) is one of the companies that championed the idea of a metaverse, yet the company has not yet presented any coherent vision for the concept.
In addition, multiple blockchain-based companies that have been working on NFTs and the metaverse have seemingly failed to deliver on their promises, given the falling prices of NFTs and other blockchain projects that were touting their incoming metaverse platform.
Are NFTs and the Metaverse all hype and no substance?
The answer is both yes and no.
NFTs have been used in a variety of applications such as digital art, gaming, and even in the music industry. While most of these use cases are still in their infancy, there is potential for NFTs to grow into a multi-billion dollar industry in the future.
The same can be said about the metaverse. While there is no clear-cut use case for the metaverse as of yet, many believe that the concept has the potential to become a parallel world to our own where people can interact with each other in a virtual space. These interactions can range from simple things like socializing to more complex transactions such as buying and selling digital assets or collaborating on projects.
The problem with NFTs and the metaverse right now is that there is no mainstream use case for them yet. Gaming platforms that have integrated NFTs into games haven’t taken the time to fully understand what makes NFTs and the metaverse unique. Most of these gaming platforms only use NFTs in name only without giving players real control over their in-game assets.
What’s more, most of the NFT projects that exist have limited utility beyond being digital collectibles. For most people, NFTs have become nothing more than overpriced digital collectibles, and the metaverse is a buzzword that is now overused and currently losing its meaning, given the many scam projects claiming the same buzzwords.
How the Sports Industry could Fix NFTs and the Metaverse
But all is not doom and gloom for the metaverse and NFTs as there might still be hope albeit from an unlikely source – sports.
In a recent interview, Sam Hamilton who is the creative director of Decentraland Foundation stated that “sports is going to become big in the metaverse.”
With an estimated global value of $756 billion, the sports industry makes up a perfect fit for the metaverse and NFTs given that sports entail community, interactions among passionate fans, and most importantly the fantasy and entertainment that comes with it.
The beauty of the sports industry is that it can offer a level of engagement with NFTs and the metaverse that is independent of the state of the crypto market. With sports fans adopting NFTs, it could very well spur the growth of individual in-game economies where the price of NFTs is directly linked to the performance of players or teams in the real world and not to the overall crypto market as is the current case.
This would give rise to a whole new breed of sports fans that are not only interested in the outcome of games but also in the digital assets that they own. It would create a metaverse where people can not only socialize and interact with each other but also trade and speculate on the prices of NFTs belonging to different sports teams. In other words, it would turn sports into a virtual economy where the success of teams and players is directly linked to the price of NFTs.
How Sports is already Boosting Engagement
The evidence of the level of engagement the sports industry could bring to the NFT and metaverse sector is already seen on popular platforms such as Decentraland.
Decentraland, a metaverse project building on Ethereum’s blockchain network, recently announced that StadioPlus, the Spanish sports platform, will take over the management of NFTs and sports content on Decentraland’s Vegas City.
StadioPlus, led by ex-NBA Luis Scola and Jon Fatelvich, will help users enjoy sports-themed content and NFTs in the metaverse.
According to remarks made by Agustin Ferreira (Decentraland’s Executive Director) sports is part of the compelling content the platform is creating in hopes of retaining user engagement given the current crypto downturn.
Publicly available data shows that although Decentraland has sold over 170 NFTs at an average price of $6,100, recent data shows that the platform is struggling to keep user engagement. Just last month, the number of active users on Decentraland was set at 1,200 active players, and in June, that number dropped to 879.
What’s more, other projects in the crypto space are now banking on the popularity of sports teams and their passionate fanbase to spur user adoption and engagement.
For instance, Dapper Labs which partnered with the NBA to launch non-fungible tokens (NFTs) of players’ Top Shot moments, has seen a massive surge in user adoption and engagement.
Since the launch of the NBA Top Shot on Oct. 1, over 126,000 people have signed up and traded over $1 billion worth of NFTs.
The Sandbox, a popular Ethereum-based game development platform, has partnered with HSBC to boost fan engagement through sports.
HSBC, one of the world’s largest banks, works with several major sports outfits that include the DP World Tour, the WorldRugby Series, and the LPGA Tour. The deal will also see HSBC become the first major financial institution to partner with The Sandbox in the financing of an engaging virtual sports experience.
While speaking in an interview announcing the partnership, Suresh Balaji (CMO of Asia Pacific at HSBC) said, “through our partnership with The Sandbox we are making our foray into the metaverse, allowing us to create innovative brand experiences for new and existing customers. We’re excited to be working with our sports partners and brand ambassadors to co-create experiences that are educational, inclusive, and accessible.”
Other projects using sports as a major gateway for increased engagement in NFTs and the metaverse include Bitso which is a Latin American crypto exchange that boasts over 4 million users and now acts as one of the main sponsors for Mexico’s national soccer team.
The practicality of NFTs and the metaverse in sports
There are several practical ways that NFTs and the metaverse can be used in the sports industry. For example, NFTs could be used to represent items such as tickets, jerseys, or even playing cards.
This would allow fans to have a more immersive experience with their favorite teams and players. Additionally, it would create new opportunities for marketing and sponsorship.
For example, a jersey NFT could be sponsored by a certain company or brand. In this way, NFTs could help teams and athletes generate additional revenue.
Another way that NFTs can be used in the sports industry is for player management. For instance, a player’s agent could use an NFT to represent their client. This would allow fans to have a more direct connection with the player and help the player build a stronger personal brand.
Additionally, NFTs can be used to create virtual stadiums in the metaverse. This would allow fans to visit their team’s stadium from anywhere in the world and could even help to generate additional revenue for teams.
Finally, NFTs can be used to represent players in the metaverse. This would allow fans to interact with their favorite players in a more immersive way.
Conclusion: The current state of the crypto market and NFTs
While the recent hype and excitement about NFTs and the metaverse brought a lot of eyeballs to the space, the current state of the crypto market and NFTs is far from ideal, and therefore many platforms are struggling to retain engagement.
For one, the number of active users on platforms such as Decentraland has been declining in tandem with the overall crypto market downturn.
While there is no denying that the declining interest in NFTs and the metaverse could be a result of ongoing economic uncertainty, it is also likely because many people now realize that most NFT and metaverse projects are all hype and have no substance.
For the NFT and metaverse space to continue to grow, platforms must focus on creating real-world use cases and applications. The sports industry offers a unique opportunity to do just that. The global sports industry is worth an estimated $1.3 trillion, and if even a fraction of that money were to flow into the metaverse, it could provide the boost that the NFTs and the metaverse need to continue to grow.