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Introduction 🔌🔧

The newsletter is getting a bit crowded so I’m trying to make everything, including the introduction, more concise.

This week we’re sending out invites to the biggest Sporting Crypto meet-up so far, in NYC. It’s going to be on the 13th of April. If you’d like to come and meet some amazing brains in Sports, Crypto, Media and Tech - please respond to this email!

This Week’s Deep Dive: Is AR the New Meta?

Through my work and writing, I’ve been thinking more and more about an area that I’m not an expert in: gaming. 

And when we combine the word ‘Gaming’ with ‘Web3’ — there is a buzz and sense of excitement from most.

Specifically, it’s all the rage when people talk about NFTs and the future of gaming.

I’m lucky because:

• I’m encouraged by clients to strategise, research and look at the world of Gaming, Sports and Web3 as a cluster of innovation even though I have little Gaming experience.

• I work with two people on a project called Soulcast who each have more experience in the gaming industry than I have years lived, and both have double the experience I have in the Crypto industry. 

That means I’ve been able to combine my perspective on the Sports & Crypto industries respectively with a sprinkle of gaming stolen from some good friends and learning on the job.

The idea that we have an entirely open world of interoperable gaming assets is pretty far-fetched.

There are technical and commercial limitations. That’s before getting into the world of licensing within the Gaming world.

This doesn’t mean Web3 doesn’t have a place in gaming. It really does, and it will even more in the future. Every week there are gargantuan amounts of money being raised by businesses who were focusing on just that.

Every week there are huge headlines, the latest of which being EA Founder Trip Hawkins joining a Web3 gaming start up.

The amount of talent and capital focusing on blockchain based gaming to whatever degree means it is bound to find some level of success in the medium to long term.

The Future of Sports Games

The intersection between gaming and Sports is very interesting to me. Even more so when we combine it with the incredibly fast-growing Web3 industry.

There’s this idea of creating higher fidelity, realistic sports simulation games so that we mere mortals can live out the experiences of a top-class athlete. That to me feels like it is at least a generation of technology away. Nonetheless, it feels natural that this is the direction of travel.

But this doesn’t mean this is the only direction of travel for Sports games.

I think many successful Sports games of tomorrow won’t be completely online. Or at least, they’ll be quasi-online and combine with some sort of real-life experience.

And that’s because there is a piece of technology that is already here and has found success already within the world of Gaming; Augmented Reality (AR). AR had a mainstream moment when Pokemon Go stole the attention of millions of young gamers worldwide in 2016.

Pokemon Go had 71 million active users in 2021, down from 232 million in 2016.

Around 9 million people play Pokemon Go every day.

Pokemon Go has had over 1 billion total downloads.

Pokemon Go generated an annual revenue of $1.21 billion in 2021.It was an inflecion point. Suddenly gaming wasn't just looking at your screen with a console when you’re sitting down at home — your real-life activity mattered. And although numbers have waned slightly it’s still, to this day, an incredibly successful game.

You wouldn’t guess who the NBA hired to create their AR game NBA All-World? Yep, that’s right, Pokemon Go creators Niantic.

So what if the Sports games of tomorrow could harness this convergence of physical and digital to create propositions that encourage, not discourage, physical activity?

At the end of the day — your local Sports club is competing with Call of Duty Warzone for the attention of a 12 year-old who only has a certain amount of time in their day for leisure.

Some of the most popular game modes in Sports games have been those where you are the game mode. It’s your career or your player that you develop and write the story about.

So what if your real-life actions influenced the story you were creating virtually?

When it comes to AR in Sports gaming, social applications such as STEPN & WeWard - have been incredibly successful. These applications have had huge success utilising such simple propositions; tokenising/monetising your daily steps respectively. It's hard not to imagine this taking an incredible leap over the next 5-7 years as the tech matures, going beyond simply walking or running.

In fact, we might not have to wait that long. As I earlier mentioned, Niantic were hired by the NBA to create NBA All world, their own Pokemon Go equivalent style of game. The NBA showcased their AR chops - which allows users to scan their bodies and be part of NBA highlights and customise their digital characters. It also allows users to find digital wearables and recruit players dependent on real-life locations they visit at certain times.

Gaming right now is far detached from reality. This will continue especially with higher fidelity gaming in the future, but there is going to also be a cluster of games that become more attached to the real world.

With Sports, this makes absolute sense. Games studios working on Sports games will have Sports partners. It’s in their interest to try and increase physical participation in the sports they are simulating.

Imagine instead of steps on your app it’s shooting 10 free throws at your local basketball court a la NBA All-World?

Imagine your 5km run helps train the soccer player you play with in EA’s latest game?

Imagine if your gym session impacted the strength of your star quarterback in Madden?

This seems weird and it is. Especially to us who didn’t grow up needing the incentive of an AR filter to go out and kick a ball around.

But when you see the amount of screen time 10-year-old today have compared to 10-year-olds a decade ago, the funnel to sporting activities in real life is not school or friends - it’s an iPad. It’s an iPhone. It’s an Apple watch. It’s gaming.

What about Web3?

So what does Web3 have to do with any of this?

Simply put - the final piece of the jigsaw is owning more of our digital lives.

As mentioned in the introduction to this piece, this idea of absolute interoperability in gaming is hard to imagine due to commercial and technical constraints.

What is totally possible however is gamers owning digital items that can be removed from the game they’re playing, or are supplementary to the game they’re playing.

The permissionless nature of digital assets also means there is a huge network effect to be leveraged here, hypothetically.

Let’s take NBA All-World. 

Nike & RTFKT could (hypothetically) look at how which users hold LeBron James ‘medals’ or NFTs within the All-World app. They wouldn’t need to work with the NBA on this, simply look on chain at which wallets hold those NFTs.

They can then permissionlessly activate that network of people, giving them access, free or paid, to merchandise and experiences. It’s a fascinating marketing technique used best by Tiffany’s when they created CryptoPunk pendants.

Let’s take the Web3 angle even further.

What if NBA-All World allowed for users to vote on their favourite fan customised jerseys or merchandise — that are then sold or given away as NFTs.

These NFTs also have a physical twin ‘forged’ for NFT owners, and has a NPC chip in the actual jersey/piece of merchandise.

What if specific unlocks within this world/game are only available to those with these limited edition NFTs/Physical jerseys?

Owned digitally and physically by the players, co-created by players, and then used by players. There’s a new, compressed feedback loop coming in the way that Sports fans are engaged by gaming and digital merchandise.

Giving players ownership of something, even if it isn’t seen to be as that much, is a powerful psychological quirk that makes people more emotionally invested in a brand or project.

The future is more digital, but also less so, when it comes to Sports Gaming and Web3.

Sporting Crypto Spotlight 💡

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More Sports & Web3 Stories

• Dapper can’t stay out of the headlines these days. This time, CEO Roham has been accused of a ‘decadent’ lifestyle and creating a toxic work culture.

• Sorare NFTs Should Be Regulated Under ‘New Category’, CEO Says

• Japanese Sports Giant Mizuno Takes NFT Plunge with Judo, Running, Soccer Offerings

• Chiliz & Jump have collaborated to launch a $50m incubator.

• ImmutableX has expanded its partnership with Warner Bros. Discovery Sports by providing its blockchain platform for the mobile Web3 game Blocklete Golf. 

• EA Founder Trip Hawkins has joined Web3 startup Games for a Living (GFAL) as Co-Founder and Head of Strategy.

• A Turkish motorcycle courier lost three months’ wages on an NFT project that Paul Pogba promoted called Cryptodragons.

General ‘Stuff’ that Could Impact you

• Michael Jordan’s ‘The Dynasty Collection’ sneaker set is up for sale and people think it could fetch up to $100m. 

• Polygon have released their open-source ID infrastructure. Zero-knowledge proofs are going to be significant in the future.

• Ethereum have made Account Abstraction live on the blockchain. This will allow wallets and interactions with the blockchain to be way safer for users.

• Starbucks’ Web3 loyalty program is seemingly off to a good start.

Thank you!

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