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Intro Notes, Plugs & Amendments 🔌🔧

It all happens at once!This week we got the bombshell that Amazon are working on a big Web3 push which includes NFTs, gaming and much more. They called it an ‘NFT enterprise’.

It’s the biggest news of 2023 so far, and I think probably the most notable bit of news that I can remember, ever, when it comes to Web3 and a mainstream company that isn’t in finance.

This is something I will write about once we have more details — because I think it could impact the entire industry in a big way — and have knock on effects to the Sports industry. At the very least, it might show the way for many Sports brands and rights holders on how to ‘Web3’.

🔌 If you’d like to work together in a consultancy or workshop capacity, please respond to this email!

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🔌 I’m in North America until April, so if you’re this side of the Atlantic and doing something interesting I’d love to connect!

This Week’s Deep Dive: Sorare Announce Blockbuster Premier League Deal

At long last — after months of rumours — Sorare and the English Premier League (EPL) have finally announced their exclusive multi-year deal thought to be worth £30m per year.

For Sorare, this was the final piece to the puzzle. That final big deal in Soccer that they wanted to get over the line. Just over 4 years from inception, they now have deals in place with almost every top flight club and league in the world.

The EPL were rumoured to have chosen Top Shot creator Dapper Labs and Consensys from their RFP process in early 2022…but the Consensys deal seemingly collapsed after the crypto market took a turn for the worse.

Sorare, unlike many NFT propositions, haven’t been as adversely impacted by the market downturn.

In every month since August 2021, the platform has generated 8 figures in sales volume. 

So when that deal with Consensys reportedly collapsed, there were very few companies in the market ready to step in. Sorare were one of those.

According to Sports Business the EPL have actually taken, like the NBA, an equity stake in Sorare as part of their deal. Which is fascinating.

Breaking down the numbers

Sales volume on Sorare are one thing, but for them to become sustainable a few things had to happen:

1. The average price of cards coming down

2. Volumes go up

3. Number of transactions go up

According to the data, this is basically what is happening. Since mid-2021, Sorare have quadrupled the number of users who own an NFT card, from ~50,000 to ~200,000.

Pretty impressive.

Let’s dive further into the figures.

Sorare have doubled their total transactions in the last 12 months, from ~250,000 monthly to ~500,000. 

The monthly sales revenues in USD seem to be fairly stable as well, fluctuating from ~$20m - $40m monthly.

The most interesting figures however, that I think think deserve the most attention are:1) Unique Buyers: This has almost doubled over the past 12 months from 28,000 to 48,000 monthly 2) Average Sale: This has dropped from $125 in fiat value to ~$40 in the last 12 months. Sorare’s main issue was the high cost of entry to playing the game.

An average cost of a card being $125 really is a crazy figure for most people to digest, but the $40 mark is a lot more palatable. And this will no likely drop further as the amount of users on the platform increases.There was also pressure last year from both the French and UK gambling authorities on Sorare, with the former coming to a formal agreement with the Paris-based platform that would push them to create more free-to-play options for their users. This no doubt, alongside scaling the platform, will have had an influence on the route they chose to grow their platform.

Gameplay

The game changed. That’s Sorare’s slogan.And the game has quite literally changed over the last 12 months.

Sorare have introduced a plethora of new ‘free-to-play’ modes, and capped modes on the platform to water down the ‘pay-to-win’ element of the platform.

Sorare reportedly had over 500,000 users plat their World Cup fantasy games (that were totally free) — and this no doubt, alongside everything previously mentioned, helped make the decision to keep them core to the gameplay longer term.

The data and gameplay both back up the thesis that to scale, Sorare need to lower the average entry price and balance the revenue loss of that with more users.

It’s a critical juncture in their growth and development as a platform.

The Premier League Perspective

For the EPL, going with the most reputable Sports NFT platform makes sense. Both from an optics perspective and commercially.

They’ve partnered with Sorare at the right time as well, as they increase the number of free-to-play modes and the average cost of cards comes down.

It’s less daunting for EPL fans to join and in general — it’s just more accessible.

Things are less hyped and crazy in Crypto right now, and especially in the NFT world.

This is a large commercial deal, but will allow both parties to get on with growing and improving a partnership they both want to flourish, without the hype and over-exuberance we saw in this last crazy crypto cycle.

It might not be as commercially lucrative as the reported Consensys deal that fell through - but longer term - I think this feels like a more sensible partnership.

The equity kicker is interesting as well, in this equation. The EPL are set to make a lot money here (tick) and also have a stake in the growth of the most successful Sports NFT platform out there.

There will also no doubt be immeasurable lessons that the EPL will get by being a parter so rooted in Sorare as a business.

This deal suited both parties perfectly — now let’s see how much EPL fans want to play Sorare!

More Sports & Crypto stories & things to put on your radar

• NBA All-World, created by the creators of Pokemon-Go, launched last week. The NBA are on the front foot when it comes to the next generation of digital.

• There will be no Crypto Bowl, this year, according to Forbes. Last year we saw a plethora of Crypto companies sponsor the Super Bowl…but apparently not this year.

• VC Firm Sapphire are the latest to raise a new fund…and a chunk seems to be going toward the next generation of Sports & Tech products. 

• Bettr Fan have unveiled a Web-based Sports-Betting Platform.

• NFT Tech have announced a strategic focus on golf.

• I wrote about Candy Digital last week…they raised $38.5m at the start of 2023 according to reports. 

Great reads, great tweeting and more general ‘stuff’ that could impact you

• The biggest news of the week. Amazon are going into Web3 in a big way.

• The market will tell us who is right and who is wrong. 

• Terrible UX is 100% the reason so few crypto products are mainstream. 

Thank you!

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