Joe Condon, Author at iSportConnect

“The Route Taken By Adidas With Sandbox And Nike With Roblox Signifies To Me A Stark Difference In Strategy.”

Back again. Talking about the metaverse. What’s new, huh?

Well, turns out, quite a lot!

The past few weeks have seen the two giants of the merchandising business, Nike and Adidas, who are always head to head IRL, reveal their hands for the next frontier – within the metaverse.

Nike made headlines by launching ‘Nikeland’ on Roblox, which has over 47 million active users; whilst also filing multiple patents for ‘virtual goods’.

Adidas this week launched the ‘Adiverse’ on Sandbox, a decentralised gaming platform that has a significantly lower active user base of over 200,000; whilst also launching with Coinbase, BAYC (Bored Ape Yacht Club) and other key projects and influencers in the space.

“The route taken by Adidas with Sandbox and Nike with Roblox signifies to me a stark difference in strategy. One long-term, one short-term.”

You might be thinking 47 million vs 200,000 active community users – what sense does that make? Nike is dwarfing Adidas in terms of reach. Why aren’t Adidas just launching into Roblox too?

Well, I’d argue it’s not as simple as that, and the route taken by Adidas with Sandbox and Nike with Roblox signifies to me a stark difference in strategy. One long-term, one short-term.

These differences boil down to 5 key areas (Platform, Technology, Community, Currency & Experiences), where they are at loggerheads:

	Nike	Adidas
Platform	Roblox	Sandbox
Technology	Web 2.0	Web 3.0
Community	Mass Audience	Growing Audience
Currency	Fiat (Robux)	Cryptocurrency (SAND)
Experiences	Entertainment	NFTs

Platform

Both Roblox and Sandbox are incredible innovators and fantastic platforms.

Their platforms offer users the opportunity to build, buy and sell a number of virtual assets like accessories (which is obviously great news for the likes of Adidas & Nike to help build brand awareness with the users of Sandbox & Roblox).

Both give power to their players to be the creators (which is a very important theme I’ll touch on later when we hit the community section), which in turn gives the users a sense of ownership (but of course ownership is a key differentiator between web 2.0 & web 3.0 that I’ll talk about within the currency section).

Both platforms have seen an incredible rise in brand partnerships with the likes of Adidas & Nike, with the theme of ‘metaverse activation’ becoming the norm (check out Balenciaga launching a metaverse business unit for confirmation). The experiences that these platforms like Roblox, Sandbox, Somnium space, Fortnite and the like can generate are incredible as you have no real life restrictions.

Technology

So the obvious differentiator here is that Adidas has opted to go down the route of a Web 3.0 blockchain powered game like Sandbox, whereas Nike has gone with a traditional Web 2.0 gaming platform.

Why is this important? Are they both not in the metaverse?

They are indeed, and although it’s refreshing to see brands diving into unknown territories, I do certainly feel that Adidas, with their partnership with Sandbox, are thinking much more strategically and long-term than Nike by embracing web 3.0 and the community that comes with it.

With the opportunities that blockchain based games bring by shifting the power to the users rather than the publishers through its play-to-earn model, it allows players and brands alike to become key stakeholders in growing the popularity of the platform and virtual world.

This is a win-win-win:

Good for the platform like Sandbox as users keep playing as they can monetise their creations in the virtual world.
Good for brands as they can activate and add value to the platform by bringing unique experiences.
Good for the user as they have the power to build their own reality in a decentralised ecosystem that rewards them for engagement in the community.

Community

Community; a word we’ve all been talking about for years in sports, but has real meaning within the gaming and blockchain communities.

Authenticity and a sense of building for the good of the community is ever-present within these two communities. WAGMI, right?

https://twitter.com/adidasoriginals/status/1466443459951271939?s=20

Nike’s move into Roblox is smart in this sense as they tap into a huge audience and a demographic that they can now engage with in an authentic way with ‘Nikeland’.

However, Adidas’ launch into Sandbox, as well as with BAYC and Coinbase, to me, signifies that the digital team don’t just understand the space, but also understand how to connect with the communities that they are trying to target. It seems the beginning of a comprehensive metaverse strategy, and I’m excited to see where it goes next.

Overall, Adidas’ use of a web 3.0 platform makes more sense to me in the long-term, as I believe the power will soon move from the publishers / game developers over to the users, and blockchain technology will be the facilitator of this transition.

Currency

How many of your children have made you buy Robux for the latest ‘skin’ within the game? So maybe you’re up to date with the currency within the game already!

It’s relatively straightforward, and mimics the likes of EA Sports FIFA with FIFA points, where Fiat currency is used to buy in-game currency, which can allow a user to buy additional items within the game.

The likes of Sandbox and blockchain games differ in this sense.

“The caveat to this is that publishers / game developers will need to build open source so that it is possible. I’m hopeful this happens as it brings a whole new meaning to building digital personas.”

The user is of course still able to convert fiat currencies into SAND coin for example, which they can then use to buy LAND (virtual land). These virtual assets that are acquired can however rise or fall in value like any asset, but the key thing is of course because the assets have been purchased on a blockchain, the user will have true ownership of the asset, rather than it just being a virtual asset owned by potentially multiple people within a game like Roblox/FIFA etc.

The interesting part for me with this is in 5,10 or 15 years, when the metaverse is more developed, will be the interoperability of these metaverses, which will mean that any virtual asset owned by a user in any virtual world (whether that be Sandbox, Somnium Space or Roblox) can be used across any of them.

The caveat to this is that publishers / game developers will need to build open source so that it is possible. I’m hopeful this happens as it brings a whole new meaning to building digital personas.

More places for me to wear an Arsenal jersey, the pain…

Experiences

Lastly is the experience side.

‘Nikeland’ certainly brings a cool experience, and the likes of NASCAR & NFL have jumped on this too.

Being able to offer a digital experience via the likes of Roblox undoubtedly opens up huge opportunities to introduce the users to your sport, educate them on it and attract them to IRL events.

We’ll certainly see more and more sports orgs and brands engaging in this way in the coming months. On the flip side are the Web 3.0 platforms, and the way that experiences are generated on them.

And this brings us back to the Collins Dictionary word of the year – NFTs.

NFTs, being a vehicle of blockchain technology, integrate extremely well into blockchain powered games like Sandbox etc, and can bring some incredible experiences with them.

A good example of this is that NFTs can directly correlate to virtual assets. For example, a yacht NFT, that allows you to have the yacht within Sandbox sold for $650,000. An extreme example, but it showcases what is possible with NFTs. Keep an eye out on Adidas’ partnership with Coinbase – I imagine Adidas may be a launch partner of Coinbase’s NFT platform…

This opens up a huge opportunity for sports orgs to develop NFTs that grant access to exclusive experiences within blockchain games, and the possibilities could be endless (viewing parties of matches, exclusive content, exclusive merchandise etc).

NFTs offer the benefit of true digital ownership, trading, security, immutability and cross-platform interoperability for users, which clearly adds value to any experience on a Web 3.0 platform in comparison to a Web 2.0 platform.

To conclude, I think one of the best things I have heard to describe this shift in mindset is to discuss how generations perceive value.

Boomers/Gen X saw value in physical collectibles and experiences.

“Gen Z/Gen A think we’re all stupid for ever having physical assets, but also having digital assets that we can’t trade/use between different virtual worlds.”

Millennials began to place the same value on digital assets, and began spending money on digital collectibles and experiences.

Gen Z/Gen A think we’re all stupid for ever having physical assets, but also having digital assets that we can’t trade/use between different virtual worlds. This is where interoperability becomes so pivotal.

This is the next step, and one that sports organisations and brands need to be able to follow, because it will all move at a frightening pace over the next couple of years.

(On a side note: Congrats to both Nike, Adidas, NFL, NASCAR and anyone that has made the leap into the metaverse – innovators will be winners).

The New Frontier: Blockchain, Metaverse & Sports

Technology; love it or hate it, has become an ever present in our lives; I’ll be the first to say my screen-time report sometimes shocks me, but digital has become an integral part of our lives, especially over the past 18 months with coronavirus where we’ve been stuck on calls on (insert your conferencing tool of choice here).

This, coupled with our Blockchain & NFTs eMasterclass earlier in the week, got me thinking even further about the future of technology, and how digital will continue to affect our lives over the coming years.

There’s two super exciting areas I wanted to talk about; Blockchain, and the Metaverse. This perhaps won’t come as a shock to anyone internally as I have been known to get stuck down the rabbit hole discussing these two areas.

Both technologies have a huge opportunity to disrupt society; both are digital focused, and fundamentally open up new ways of communicating, transacting and overall, living. There’s also some cool applications of these technologies in sports, of course.

To take it back to the basics before digging deeper, here’s some definitions:

Blockchain

A shared, immutable ledger that facilitates the process of recording transactions and tracking assets in a business network.

Metaverse

A parallel digital universe that offers a set of unique experiences to users.

The metaverse is best associated with gaming, and perhaps unsurprisingly, when coronavirus caused wide scale lockdowns across Europe, there was a huge surge in time spent playing games (gamers played 1.5 hours more per week than compared to the same time in 2019).

Couple this with the fact that most cryptocurrency exchanges saw an increase in investment and volume traded in March 2020, as well as the boom in NFTs, this shows a growing acceptance and appetite for digital realities and assets.

So what does this mean for sports, and where are the opportunities and challenges moving forwards?

In my view, these changing consumption, payment and overall social habits are by no means a flash in the pan; these are fundamental changes that will present a real complex for sports organisations over the coming years.

As we know in traditional sports, many fans are from an older demographic, and perhaps are not as tech-savvy (or definitely are not digital natives), and hence have less of an interest, association or propensity to digital initiatives. They do however, hold much of the buying power.

This is the polar opposite for GenZ and millennials, who in greater numbers, are migrating to digital settings, and embracing it in their day to day lives. They of course do not have the same buying power, but are perhaps the single most important demographic to the future of sports organisations.

So what takes priority, and where is the money?

It’s no secret that 99% of all sports organisations’ fanbase are global and will never attend a physical game; and this is where I see there being so much opportunity by utilising blockchain technology and the metaverse.

By building a virtual world, those barriers are no more, making the sports organisation/brand more accessible than ever to their global audience. And that’s just the beginning.

Virtual worlds offer a completely new revenue opportunity for clubs to monetise on their IP & rights (virtual kits/skins, virtual stadiums, broadcast/streaming in-game), as well as build a community that will have an association with your sports organisation/brand, and trusting the activation is done authentically and adds value, will likely generate UGC from the community.

Take a look at some good examples of:

Kits/Virtual skins: Use of club kits as ‘skins’ to customise virtual world characters in Fortnite
Stadiums: The super cool example of the O2 moving their venue inside Fortnite
Broadcast: Travis Scott’s concert that was live streamed and watched by more than 12 million (yes, million) people – how is that for reach? We’re at the stage of watch parties becoming the norm, so is the next step that we see sports games streamed in virtual worlds?
Brand Building: A great example is Gucci, who have embraced the metaverse, and have seen incredible returns; with one example being that their virtual bags sell for more than in real life; you could conclude GenZ are placing more value on digital assets…
User Generated Content: Gamers produce millions of hours of content per week; by bringing your brand/organisation to a virtual environment in an authentic manner, it brings the added prospect of players exploring, engaging and producing content on your brand.

Taking the metaverse, and then incorporating blockchain technology and digital payments seems to be the next logical step in building a wholly global digital community. A great example of this is Decentraland, which utilises the Ethereum blockchain to host a decentralised virtual world. But there are so many exciting organisations (some that will be familiar to you and some not so much) operating in this space, as this extremely helpful Newzoo graphic shows.

The metaverse however is not solely just about commercial opportunities. As we continue to evolve toward living in both the real world and the digital one, the metaverse offers two key advantages: accessibility and flexibility.

That lack of geographical or physical obstacles and additional flexibility of being able to incorporate your brand/organisation in ANY way you so wish opens up unparalleled opportunities to get super creative in your attempts to engage a large scale, global audience in ways never done before within sports.

We have all embraced digital into our lives in ways that were unimaginable only 18 months ago; in another 18 months time, who knows where we will be, but with innovations like 5G on the horizon making things much more possible, I strongly believe the metaverse should be at the front of every marketers mind within sports and beyond.

To conclude, the new frontier will be fought and won or lost in the digital world, and if sports is to survive and thrive, they must meet consumers/fans where they are spending the lion share of their time; which unequivocally is in the digital realm.

Getting A Foot On The Ladder: My Experience

Three weeks since our launch of iSportLearn, I’ve finally found some time to sit down and reflect on what was an all encompassing few months bringing this to life.

You can check out Ben Page’s piece here for an insight into the scale of the project, and the numerous roles we all took on from overall project management, to directing and production (look out Spielberg), to the commercial and marketing strategies. Quite the experience to be immersed in.

I’m sure you’ve all read Sandy Case’s piece on the ‘why’ of iSportLearn, and the need for it within the industry, and that’s just what I wanted to expand on today from a slightly younger perspective; looking at my experiences of entering the industry, and where I think our platform can add real value to those who are in the exact position I was only a couple of years ago.

I’ll start by saying that one question that is really fascinating to ask anyone within sports is:

‘How did you get into the industry?’.

To date, I have not heard the same story, and doubt I ever will; the range of ways that people have made their first jump into sports is so varied, and something I always find incredibly interesting.

Getting a foot on the ladder in sports is however not an easy one; it’s a very competitive industry; add in the fact that over the past 18 months we have all been battling with challenges that COVID has presented, it’s become significantly harder for someone looking to gain invaluable practical experience through an internship or to get an entry level position, and this is where we hope to help with iSportLearn.

From a personal viewpoint, my development as a person and as a professional was very much shaped by those personalities and practical experiences I was exposed to while I did internships between the ages of 18-21. It’s such a great opportunity to cut your teeth, see the practical applications and examples of the theory, and help you to become laser focused on the areas that you are interested in, and know where you would be best placed in your career.

Undoubtedly having practical experience and a grasp of how the industry operates is beneficial, and will smoothen your transition out of school/university, but for many reasons, not everyone is lucky enough to be able to do internships; whether that be because of socioeconomic reasons, or because of a genuine lack of opportunities because of COVID, so this is something we’re really trying to combat.

How?

Through our platform, we are able to democratise the practical knowledge, experience and insights needed to grow a career in sports, which can not only lower the barriers to entry, but also ensure that everyone, from all backgrounds, has the necessary practical skills and education to take advantage of the available opportunities within our industry.

Working hand in hand to achieve this will be our Foundation, which is not only aiming to fund free or subsidised courses to underserved communities, but will be working with sports organisations to deliver internship and job opportunities to those that felt the sports industry was just not available to them.

Lofty ambitions, we are aware, but with over 60 organisations involved across our courses, and many more to be involved in later stages, we know we’re in good company to make our industry one of the most accessible, diverse and exciting on the globe; much as it is on the field of the play.

Overall, as someone still very early in their career, it’s been incredible to work together with all of our playmakers, team and partners to ensure that the content of our courses really meets the needs of what 21 year old Joe, looking to get into our sports, would have benefitted from. And if we are successful in doing that, I’ll be a happy man.

*If your organisation has a focus on diversity, sports or education, then we’d love to be having a conversation to see what we could do together to achieve these goals.*

Changing Habits & Growing Inequalities

In this week’s Meet The Team piece, Joe Condon takes a look at how the demographics of people involved in sport have been changing since the pandemic begun.

Much of my life has been spent playing sports. I’ve tried my hand, and feet, at numerous sports, all with varying degrees of success. My main sport however has always been football; and returning to training 2 weeks ago for the first session post-lockdown here in the UK was a welcome step back to normality.

Throughout the pandemic, I changed my fitness habits like many, and took up running and, for my sins, participated in the odd Joe Wicks workout. I began to wonder how many people had done the same, and whether there had been a shift in participation levels for certain sports that may have a positive/negative effect in the long term post-pandemic.

“One that stuck with me is that children from affluent backgrounds remained the most active throughout the pandemic, whilst children and young people from a black background showed a 9% drop in activity.”

This is when I stumbled across the Active Lives report by Sport England, which I advise everyone takes a look at, whether working in sports or not.

I think we are all very aware that across all facets of society, the pandemic has exacerbated existing inequalities, but this report really reinforces that this is also the case in terms of activity levels. One that stuck with me is that children from affluent backgrounds remained the most active throughout the pandemic, whilst children and young people from a black background showed a 9% drop in activity.

The first question I asked myself is why? Is it fair to assume that the sports that were most accessible to this demographic were the team sports, like Basketball & Football, that were halted during the pandemic? How can we ensure that the most vulnerable within our society still have access to sporting provision to allow them to remain fit, healthy and engaged if we are ever to go through a pandemic again?

In Layman’s terms, it comes down to funding. Of course, in the UK, grassroots sports are funded by Sport England, and elite sport funded by UK Sport.

“In comparison to other smaller participation sports, the numbers just don’t add up.”

A great example of a sport where I feel a rethinking in strategy towards funding could present the opportunity for tremendous growth is Basketball here in the UK.

Basketball is the second largest participation sport amongst children and young people, with 1,041,700 playing at least once a week; yet in funding terms, basketball is a minority sport, only receiving £75,000 from UK Sport for the 2018-2021 cycle, and just 20 million since 2012 from Sport England.

In comparison to other smaller participation sports, the numbers just don’t add up.

How can a sport with such high participation rates, that generally engages with urban areas, and the large number of minority ethnicities within them that have seen a 9% downturn in activity levels throughout the pandemic, be receiving such low funding?

“There is no doubt that success is important in sports, no one gets into sports to lose, but there has to be an appreciation for the wider impact the funding can make in society.”

Of course from a UK Sport perspective, the criteria is currently that funding gets allocated to sports with medal chances, but in my opinion, this criteria needs serious revamping. There is no doubt that success is important in sports, no one gets into sports to lose, but there has to be an appreciation for the wider impact the funding can make in society, and the demographic that the sports serve when allocating.

It cannot be understated the impact that funding the top level of sports can have on the pyramid below it. Initiatives like the Aspiration Fund from UK Sport are a good start in helping smaller sports to grow and evolve, however, whilst many of these sports are not yet self-sustaining commercially, there must be a comprehensive strategy in place that does not detriment the grassroots participation of the sport overall.

To conclude, I strongly believe the beauty of sports is that it can completely transcend society and background when the right provisions are in place, so it must be a collective priority of the industry, the government and those who oversee funding allocation to view things with a wider lens; this way, sports really be true to its mission, and be accessible to all.

The Good, The Bad, The Covid

Unless you have been living under a rock, you will know that the Esports industry, a constant source of interest to many, if not all, within the entertainment realm over the last 5 years, has been growing at an unparalleled rate, with the industry as a whole expected to be worth $1.1 billion this year (Newzoo).

Today, I’ll take a quick look at what I believe have been the optimal conditions that have allowed the industry to flourish, COVID’s acceleration on this growth, and the next logical growth areas for the industry (of which, many are already in action).

By building the product around their audience’s consumption patterns from the get-go, it has enabled the rights holders of the industry to build a highly engaged global audience.

I always think when trying to understand the growth of Esports, a good place to start is by looking at 2 key areas that have contributed to its current position, these being; the audience, and the freedom/autonomy.

Generally speaking, the Esports audience is made up of that elusive 16-35 demographic. This means that they are (mostly) digital natives, and that’s why Esports is such a complimentary fit to their lifestyle. The whole Esports product is based around the premise of the games being played digitally, watched digitally (in most cases, which I’ll touch on later) via medium’s like Twitch, and discussed digitally via socials. By building the product around their audience’s consumption patterns from the get-go, it has enabled the rights holders of the industry like publishers, leagues and teams to build a highly engaged global audience that they are now monetising on effectively to facilitate the level of growth we are seeing.

Secondly, the autonomy; Esports has the opportunity to build from the ground upwards; although undoubtedly this has been a challenge, this freedom can be seen as a pro, but also a con. It’s such a junior industry e.g. being an Arsenal fan is generational, so you can pretty much guarantee a set amount of revenue from the fans, whereas the Esports industry is not at this level yet. This means there is no guaranteed revenue from their audience and means those within the industry must be continually creative in their approach to ensure their audience is engaged.

It would be untrue to say the industry was not growing at an exponential rate prior to COVID, with a number of non-endemic brands entering the space.

This lack of heritage can however be a positive; due to the new position of Esports, they have the luxury of learning from the mistakes of traditional sports; this means picking and choosing business models that have been tried and tested, and enables organisations to compress 50 years of innovation into 5 years. This insight is invaluable and is definitely one of the key drivers behind the growth of many organisations within the ecosystem.

Moving onto the dreaded ‘C’ word; COVID, and it’s influence on Esports growth.

It would be untrue to say the industry was not growing at an exponential rate prior to COVID, with a number of non-endemic brands entering the space, major events being hosted (like ESL Katowice) and prize money continuing to rise. However, unlike many traditional sports entities, Esports was positioned well to pivot extremely quickly back to its digital roots, which meant that the impact of COVID was minimal, and if I can say, probably the springboard to several positive changes.

Whilst traditional sports were scrambling to create more digital assets now that physical activation was impossible, Esports had been doing this extremely well for many years, with seamless integrations of sponsors into broadcasts/gameplay through overlays etc. Although not true in every case, the postponement of traditional sports leagues meant that brands that were looking to expand their sponsorship portfolio’s into Esports now had no reason not to.

The next positive of COVID for Esports is intrinsically linked to brand sponsorship; it is of course viewership. To give you an example of the scale of growth through just a 4 month period from February of this year to May, the number of hours streamed on Twitch nearly doubled, with 1.7 billion hours being watched. This substantial increase in viewership of course improves an Esports organisations proposition when talking with potential sponsors, whilst also undoubtedly converting a number of ‘part-time’ fans into fully fledged fans.

I think it’s fair to anticipate that media rights values will eventually grow to be the largest revenue stream for Esports organisations.

To conclude, where do I feel the biggest growth points will be over the coming years?

Well, to link back to my previous points, I think it will be in 2 main areas:

Non-Endemic Brands entering the space
Media Rights Deals

There have been notable entries into the market over the past year (e.g. BMW’s 5 Esports team sponsorships), and due to the creativity of many publishers, leagues and clubs in integrating their sponsors authentically into the space, I see no reason why this won’t be one of the fastest growing revenue generators for rights holders.

Finally, media rights; linking back to my point earlier about Esports having the opportunity to follow successful models from traditional sports, I think it’s fair to anticipate that media rights values will eventually grow to be the largest revenue stream for Esports organisations; Newzoo is already estimating media rights will be worth a combined $396m by next year (2021). I would suggest a key contributor to this rise will be the increased number of linear broadcasters that will be looking to diversify their content offering by adding Esports to their packages to continue engaging with the subscribers, but that’s a discussion for another day!

Love to hear your thoughts…

References:

https://resources.newzoo.com/hubfs/Reports/Newzoo_Esports_Bar_Understanding_Content_Rights_in_Esports.pdf

https://newzoo.com/insights/trend-reports/newzoo-global-esports-market-report-2020-light-version/

https://www.statista.com/chart/21965/twitch-streamers-and-viewers-during-covid/