NHL Launches Breakaway; Video Moment NFTS... Fails to Stick Landing

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Introduction 🔌🔧

I was in NYC this last week as we threw our inaugural Sporting Crypto CLUBHOUSE event… and it went better than we could ever have expected.

It was great to meet a bunch of industry leaders across Web3 and sports and I must say, considering the regulatory backdrop in crypto right now in the US, the energy and enthusiasm is incredible compared to Europe.

A shorter newsletter this week as I try and get over jetlag, but to also balance the fact that last week we had our longest Sporting Crypto edition ever. For those who did get through the whole thing and gave such kind feedback, thank you!

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In late April of this year (2023), the NHL announced that their video moments proposition Breakaway would be launching soon, and last week, they did exactly that.

The drops were very constrained in supply, but there were still plenty of technical issues for users who tried to buy.

It’s not unusual for first-time projects to have issues with their drops on the tech front.

We’ve even seen Nike’s .Swoosh platform faced difficulties with tech when launching their first drop Our Force 1 — but that was on a whole different scale to what NHL and their partners Sweet.io were trying to accomplish here.

In this newsletter, I discuss:

🏒 What NHL Breakaway is🏷️ Their Inaugural Drop❓ Timing and thoughts

🏒 What NHL Breakaway is

NHL Breakaway is a video moments NFT project that is much like NBA Top Shot and NFL ALLDAY in that users are able to buy digital packs - open them - and collect video moment NFTs.

It’s the modern-day panini.

It’s the same concept, but instead of cardboard - it’s video, and digital.

Right now, there is a limit to what users can do on the platform as it is still in Beta. Essentially users can:

• Register to set up your profile and prepare for pack drops.

• Purchase packs on their platform.

• Display packs, and unlock perks & rewards.

It is currently in the beta phase of the program, which will be followed by a full program launch in 2024.

For now, users are not able to trade the NFTs, but a peer-to-peer marketplace will be launched in late 2023 where users will be able to exchange the video highlights.

According to the site, collectables are required to stay on the platform — but collectables will be moveable off the platform to compatible wallets and approved marketplaces in the future.

🏷️ Their Inaugural Drop

This past week saw the long-awaited launch of NHL Breakaway, where two different packs were set to drop at the exact same time - one with 300 supply, and the other with 450 supply.

This was the first part of a two-part rollout, with only 600 Inaugural Opening Ice Packs and 900 Inaugural Founding Fan Base Packs.

They are the first packs of highlights ever created in the program's history and are priced at $9.00 and $59.00 respectively.

The drop however, didn’t go to plan, with NHL fans running into multiple technical issues.

Many were stuck and unable to buy packs, and some had transactions that didn’t come through or were stuck on ‘pending’.

The experience is something akin to buying on Ticketmaster, for example, like digitally queuing up for Taylor Swift tickets — for those that have never tried to buy an NFT during high demand.

Most of the time, when there’s a lot of demand, there’s only so much you can do.

But many are saying that his experience was eerily similar to buying NBA Top Shot packs in 2019/2020 — which is quite worrying. Because that was essentially the first time NFTs were adopted in a properly mainstream way, you could essentially forgive some errors.

In 2023, especially when markets aren’t as frothy, there’s less patience.

Of course, the tech stack is completely different here, compared to Dapper’s custodial wallet solution used on Top Shot and ALL DAY respectively.

Breakaway is built on Polygon and uses Moonpay as its payment processor, with Sweet.io — the tech/Web3 agency — helping build the project out.

Via the Breakaway discord and on social media, the team announced that all ‘pending’ transactions would be voided and the drop with the remaining packs rescheduled.

An unideal start for Breakaway. 

❓ Timing and thoughts

I have sympathy with providers because this stuff is hard.

Payments, crypto, NFTs, user accounts, platforms — it’s all really difficult.

But we’re too late in the cycle for hitches of this level to be creating friction for users who actively want to buy and collect digital sports merchandise.

In the same week, the team I work with at Floor were able to allow their users to buy art NFTs via their app and Apple pay. Two clicks and boom - that’s all it took to buy the NFT. To some extent, we’re comparing apples and oranges — but the point I’m making is that the user flow for buying NFTs can be done very excellently if it’s executed well.

It’s safe to say, standards are being set across the industry to make things a lot easier for users to buy and interact with NFTs. And so Breakaway having, what a friend described as a “2019 level” user experience for their inaugural drop is a poor first showing, and I hope their rescheduled drop goes smoothly.

The key thing for a sports brand doing anything Web3 is whether fans actually want the thing.

And that’s clearly not where Breakaway have an issue because at least for this first rollout, there was ample demand (albeit having a constrained supply).

But the second most important thing is how easy it is to actually onboard someone.

One of the reasons that Sorare, for example, have had success is the custodial solution on their platform, allowing for users to simply sign up with an email, deposit and play.

And whilst the flow for Breakway isn't too different, clearly there are issues with their tech under great demand.

I’ve written before that there’s a first mover disadvantage for many brands in this space, but the only thing worse than that is not being a first mover and still getting it wrong. 

If you’re late to the party, or patient, but still get it wrong — why did you wait?

One of the things that Breakaway did was allow users to buy up to 5 packs per user… which swallowed a lot of the demand but also put the system under more strain.

A lot of the feedback from users, but also from professionals in the industry such as the Head of Fan Experience at Candy Digital was to limit the number of packs a user can buy, or create an off-chain queue/draw. I have less sympathy with not implementing something along these lines because it’s simple, and would have helped the tech stand up to the test of demand a lot better.

The context in which this is happening market-wise is not tough; the market for video demand is bad right now.

And the fact that Breakaway were able to generate this much demand in the first place (albeit the modest supply) is fairly impressive, so they can take that as a big positive. To paint a better picture, this time last year, NBA Top Shot was seeing volumes of anywhere between ~$125-500k per day, down to between 30-100k per day in July 2023. 

NFL ALL DAY, the NFL’s equivalent product has also seen a drop in volumes and transactions respectively, falling from volumes in the $100-250k range in August 2022, and up to $1m in September 2022 (run-up to the season) — to between $10-50k in July 2023.

If you consider that the NHL has a smaller fanbase, and on average an older one, it’s impressive that they’re finding a market for their video moment collectables at all. I know the size of their drop was small, but there still seems to be a decent number of people who want to purchase packs.

In Europe, the La Liga Golazo proposition has had hardly any movement when it comes to volumes, transactions and users. And whilst video moment NFTs are here to stay, with Sky Sports reporting the Premier League were in discussions with Dapper Labs about video moments back in October 2022 (although nothing is yet to materialise) — there seems to be an appetite from both rights holders and vendors to create video moments — and the demand has not completely gone from fans.

🧠 Concluding Thoughts

In my last post about NHL Breakaway I wrote:

“The lift and shift approach doesn’t tend to work as well as people hope, but the NHL will hope to follow NFL ALL DAY’s success which is widely seen as the only thing that has even come close to touching the success of NBA Top Shot in the video moments market.

I wish the NHL and Sweet the best of luck.They have chosen an extremely difficult time launch a proposition like this, but perhaps that will work in their favour from an expectations perspective, and push them to build something that hockey fans genuinely enjoy long term.”And yet, within this market, they still managed to generate demand to sell these packs - which is good going.

But the tech and user experience needs work because the easiest way to lose users is to make it really difficult for them to do anything.

Right now this could be viewed by users as a speed bump, which can be easily fixed with low user attrition.

At the same time, if it persists, that speed bump can easily turn into a mountain.

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