Show Me The Money! Call On (e)Sports Is Window Into Crypto’s Use Case Challenge
A currently common crypto complaint is its lack of a breakout application, decentralized or otherwise. Some excuse this state, noting the lack of a robust, scaled infrastructure, on which they now are prioritizing their investments. Others, perhaps more probing, press that after 10 years of work on infrastructure since Bitcoin birthed the blockchain, we should be looking to invest in some compelling use cases to take the laboring oar in propelling the economy into the decentralized, immutable, and trustless world.
Sports have an outsized impact on society. The NFL generates roughly the same revenue as Sherwin-Williams and its paints. But let’s not even bother sizing the vast difference in their social mentions and other media metrics.
On October 2, we hosted a conference call in which three experts assessed the convergence of eSports, sports and crypto, and the potential for eSports and gaming to leverage the power of sport to deliver compelling crypto use cases:
- Roderick Alemania, CEO of ReadyUp, an eSports platform, which helps users find and meet gamers, and makes it easy for gamers to manage teams, stay connected, and improve.
- Kevin April, CEO of SportsCastr, a live-streaming company that allows anyone to instantly become a live color commentator to any viewer in the world, and which has developed the FanChain token.
- John Kosner, President of Kosner Media, a digital media and sports consultancy company. John was a 21-year veteran of ESPN. He is an advisor to ReadyUp.
Here are our key takeaways from the call.
1. Crypto could help build stronger communities around (e)Sports.
Communities allow the like-minded to find each other more easily. ReadyUp sees itself as a LinkedIn or Match.com for sports and eSports. Finding suitable players and teammates depends on data about not only 1) skill level, but also, perhaps in a manner less appreciated, 2) like-mindedness. Thus, ReadyUp appends to data on skill level other data about player personalities. With the help of crypto tokens, sports could support its own “fork” (OK, version) of the meet-up concept. For example, Kevin announced a deal with FanWide, the world’s largest sports club network, through which FanWide will use the FanChain token as the official cryptocurrency for its events in the U.S. (and soon internationally).
Communities can support a wider range of economic models than markets. Roderick sees ReadyUp’s revenue model moving beyond conventional advertising to “value-exchange” ads, where users can monetize their data, data that centralized platforms (e.g., Facebook) now monetize for themselves. To fulfill the desire of players to get better, ReadyUp is building a p2p marketplace where coaches of different skill levels can be rewarded for teaching others. Crypto can provide new incentives to help surface the next generation of talent for commentating on sports and eSports, such as Omar Raja and Cian Fahey. As Kevin succinctly summarized, the combination of a true currency and more bi-directional relationships is a key advantage of new sports-related communities over traditional sports markets.
Community does not require homogeneity, and crypto incentives could help sports communities be more diverse. Conventional sports, for all their efforts to command a global following, are still often hamstrung by a lack of variety in presentation, such as commentary. Kevin noted the lack of female commentators for Major League Baseball on ESPN. Even the NBA, which has been more successful than most leagues in pushing into other countries and onto other platforms (e.g., NBA League Pass on OTT), still telecasts predominantly in English. SportsCastr could thus be a key tool for sports globalization, through its platform for facilitating and incentivizing a much wider variety of commentary.
Show me the money: community is key not just to some vague “cryptopia” — it is central to gaming hits. Roderick, reflecting his years of experience at IGN, said that building a strong community was critical for the breakout of Fortnite over the past year.
2. Scouting report: eSports is likely to lead the way for sports.
Roderick’s thesis is that sports will increasingly leverage eSports and video games to connect to their fans. Despite its success, traditional sports has a community problem with the younger demos that are its future. Sports have already used games to build connections with younger viewers. For example, as John noted, the Madden game franchise has contributed to innovations in NFL TV broadcasts. For advertisers, eSports provides opportunities to reach younger audiences. The first truly global leagues are coming from eSports and gaming, for example, Overwatch.
3. Non-fungible tokens, already promising in CryptoKitties, could be big in both sports and eSports.
John sees the first Digital Bobblehead Night hosted by baseball’s Los Angeles Dodgers on September 21 as a potentially seminal moment in the use of non-fungible crypto tokens in the sports world. Kevin agrees, and expects other teams and leagues to follow this example, launching their own non-fungible collectibles. Roderick sees such moves as an example of the world of digital and crypto capitalizing on the longtime popularity of sports trading cards.
4. The revolution will not be televised — it will be Twitched.
Tokens could reinforce the bonds of next-generation video platforms like Twitch. Twitch has established a first-mover advantage in feeding video content to gaming fans and players. John expects Twitch-style player channels to continue to spread to more sports. As Kevin noted, Twitch is already known for the use of digital tips, which could be a natural application for crypto tokens. Twitch could thus be an engine for taking its player/fan experience — and potentially crypto — to more mainstream sports.
5. Crypto coin toss: gamers’ virtual savvy offers both rewards and risks.
Gaming and eSports could become an important test case for how much the virtual needs to evolve to the crypto. Gaming has been a pioneer in the use of digital incentives. Players are already accustomed to the digital assets represented by badges and other in-game achievements, as well as to valuing those digital assets. Moreover, games have addressed important challenges with the use of incentives, such as the burden on the user of the “cognitive load” of making micropayments. Whereas other media have struggled to make micropayments into a meaningful new revenue stream, many games have succeeded in selling virtual goods at scale.
The good news is that this pool of gamers could be the vanguard of the early adopters necessary for B2C crypto dapps to break out to mass adoption. Thus, Roderick sees digital currencies used for microtransactions in games.
The bad news is that the centralized virtual solutions already popular with gamers may be good enough. John assessed the topic well by raising the prospect that, when it comes to use of virtual currencies, gamers may already be in front of the technology. In many cases, the additional value from tokenizing in-game rewards will have to sway an already savvy audience.
6. Deflated ball? Clunky infrastructure and user experience may halt crypto’s drive into eSports.
Of course, eSports and gaming are not immune to the challenges affecting the broader market and technology of cryptocurrencies. Reflecting current conditions, ReadyUp is pausing its contemplated token offering. The complexity of the current crypto infrastructure — including the use of tokens, wallets, and exchanges — is a hurdle to providing a compelling user experience in the context of gaming and eSports. That said, despite such challenges, SportsCastr plans to integrate the FanChain token into its upcoming release.
7. Gadget play? Decentralized computing could power next-generation gaming.
We close with a potential surprise in the playbook for the next game, namely, how crypto could combine with other tech trends to deliver breakthrough user experiences. John pointed to the nascent area of cloud gaming as a path to widespread game play without the need for powerful consoles. The potential to leverage the blockchain’s infrastructure, such as for decentralized computing and storage, could make this a reality sooner than expected.
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