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Major Esports team, Team Liquid, is launching a Web3-enabled fan engagement platform called MyBlue. It is built on top of their current former fan engagement platform Liquid+ and built on the Sui blockchain.

Fans can create their own NFT avatar of Team Liquid’s Blue Mascot, which can be customised with digital apparel earned by completing challenges. They can also unlock additional rewards such as; signed jerseys, discounts, in-game currency, exclusive merch and player access and money-can’t-buy experiences. The NFT itself is ‘soulbound’ meaning it cannot be traded.

Steve Arhancet, co-CEO of Team Liquid said:

When signing up to the platform, fans can use Email, Google or Twitch details to create an account.

Fans are generated a wallet in the blockchain the background connected to their social login of choice.

Interestingly, when fans ‘choose their experience’ after signing up, they are given the option of whether or not they want the ‘Basic’ experience or the ‘Basic +MyBlue’.

Presumably, this means users who choose ‘Basic’ do not create a wallet in the background, and are limited to the features outlined.

This is perhaps the first time I’ve seen the opt-in happen during account creation. Most blockchain-based activations in entertainment tend to try and incentivise onchain activity after the fact with perks, rewards and discounts.

Many have pointed to Esports and Gaming as markets in crisis, and when picking the bones and contextualising against lofty pandemic market highs - it is hard to argue with that.

Starting high level, looking at layoffs in gaming — as per Matthew Ball’s essay ‘The Tremendous Yet Troubled State of Gaming in 2024’: In 2022, the industry (Gaming) had a then-record of 8,500 layoffs. 2023 beat that record by nearly 25%. And during the first two months of 2024, there have already been some 8,000 job losses.

Since then, another ~5000 layoffs have been made in the gaming industry, making it the worst year for the gaming job market post-pandemic.

US consumer spending on video games is down 6.3% between 2021 and 2023, and 2023 saw numbers equitable to 2019 in real terms (considering things like inflation).

Mobile gaming has also seen difficulties — with a 6.7% decrease in consumer spending in 2022, and a further decrease of 2% in 2023. There are more games than ever on major app stores, and it is harder to hit strong ‘revenue-per-user-per-day’ numbers when user acquisition costs are so high.

Looking at Esports more specifically, the troubles are well publicised.

David Beckham-backed Esports group ‘Guild Esports’ burned through £26.6 million in three & and a half years, leaving them with a cash position of just £25,000. Their market cap dropped 99% from its debut in late 2020, and have now agreed to be acquired by DCB Sports.

FaZe clan, a professional Esports team and lifestyle brand went public via SPAC in mid-2022, achieving a $725m valuation, before being acquired for just $17m a year later.

So where does Esports find new pockets of value creation?

Like Sports more broadly, Esports businesses are trying to go directly to fans to generate more revenue — on top of geographical growth in markets like the Middle East.

Media Rights, streaming, and publisher fees are projected to remain consistent or have slow growth between now and 2029, but merchandising & ticketing is projected to drive more revenue than streaming and publisher fees by then also.

Esports teams need to leverage and grow a larger, more globalised fanbase, to ensure that a) direct-to-fan revenues rise and b) sponsors, venues and attendees are better monetised for global events.

So why blockchain?

There are a few key reasons:

(1) This is a new sponsorship category for sports IP and they (sponsorships) are projected to grow the most as a revenue category for Esports for the rest of the decade. There is competition from blockchains to partner and sponsor with sports IP, and Esports is no different.

(2) Blockchain Gaming is having a breakout moment. The Esports market is intrinsically linked to the broader gaming market and there are signs that the intersection of these markets is finding market fit. Triple A game Off The Grid for example has generated 10.5m+ wallet addresses since launching last month. Expect Esports to fast follow with blockchain strategies if gaming explodes in this sector next year

(3) Blockchain allows you to know your fans more intimately and generate revenue with lower overheads. If your fans are onchain, you can build a better picture of them and reward them globally, and could also generate higher margin revenues if digital assets are purchased.

(4) The geographies match. APAC and North America account for ~70% of the global Esports audience. The Middle East is becoming a prominent player in gaming and Esports, from a user, audience and sponsor perspective. The regions mentioned above are all growing from a crypto perspective, too, for different reasons (regulation, investment, Govt. incentives). The overlap here in audience and sponsors in Esports, and growth in blockchain enthusiasm and crypto users, means there is demographic overlap from a geography perspective.

On the contrary, some gamers, are vocally against crypto integration — albeit that anger and frustration is waning.

From a Gamesbeat article, in response to the resistance some Western gamers have shown to blockchain, a spokesperson from Mysten Labs (contributors to Sui blockchain) said:

Interestingly, the quote has been attributed in response to criticism from Western gaming, which is something I agree with. There is not a global ‘hate’ for crypto from gamers — it is largely a Western attitude.

Of course, Team Liquid have still been careful here — offering their fans an option for an off-chain account with no blockchain connectivity. However, It will be interesting to see whether or not Team Liquid commit fully in the future, and what the fan reception is like if they go forward in that direction.

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