As blockchain technology advances, it is proving to be a useful tool in a wide range of fields, including sports, which is a surprising field where it is gaining momentum quickly. Many high-level clubs and teams are opting for blockchain app development and customizing blockchain use cases in sports to further increase fan interest and revenue. Embracing this form of innovation is becoming increasingly important for clubs' survival, particularly as revenue from ticket sales has been hit hard by the COVID-19 pandemic.
In a dynamic market, sports clubs and organizations are continually looking for new ways to generate revenue. With the rise of streaming activities and changing fan habits, providing enticing gameday opportunities to improve attendance has become a constant challenge. Furthermore, with disruptions such as the rapid growth of eSports and the fact that most sporting events are currently held without spectators, clubs must diversify their activities and rethink how they interact with their supporters to increase engagement, membership, loyalty, and reach more international fans. All of this and more is possible thanks to blockchain applications in the sports industry.
Blockchain is gaining traction in the fast-growing eSports world, in addition to conventional sports. According to a study by Newzoo, eSports will see an annual growth rate of about 14 percent by 2021, with the number of casual fans and eSports enthusiasts increasing to 557 million. And, since eSports includes a diverse range of stakeholders, including game developers, teams, sponsors, advertisers, team managers, and the media, blockchain can provide a comprehensive single network (or ecosystem) to connect them all. Via programmable smart contracts, its decentralized nature enables market stakeholders to interact in a peer-to-peer manner, eliminating complications and intermediaries and allowing for the simple distribution of prize money, player transfers, media rights, and more (a contract that is executed autonomously based on pre-set conditions).
Due to its transparent existence, which enables all participants to see what's going on in the network, blockchain may also increase confidence in eSports. Smart contracts development between tournament organizers and game developers often eliminates the possibility of game developers not being compensated or complaints about prize money allocation that is unfair.
Fan loyalty and engagement platforms, which help teams promote a sense of community and belonging among their fans, are another blockchain use case in sports. Fans can be rewarded for certain actions, such as interacting with clubs' websites, creating, sharing, and liking content, or through loyalty programs that allow them to accumulate rewards or points to spend on merchandise, tickets, or digital collectibles, through these blockchain-based platforms. Fan loyalty and communication networks will help clubs improve their partnerships with sponsors, in addition to connecting with fans and creating an exclusive group. The transparency and immutability of blockchain ensure the accuracy of the metrics and insights gathered from fan interactions, allowing sponsors to achieve a higher return on investment.
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Unlike standard digital collectibles, digital collectibles or Non-Fungible tokens (NFTs) are individually unique (or provably rare) and restricted in quantity. This means that NFTs are “limited edition” collectibles. Their uniqueness can be checked using immutable blockchain technology. As a result, they're ideal for clubs and teams to use. They can create digital trading cards, in-game assets, and game memorabilia that fans can trade.
In late 2017, a game called CryptoKitties became so famous that it clogged the Ethereum blockchain. This is the time when NFTs attracted the attention of gamers and sporting organizations. Each of the exclusive collectible digital felines commanded a different price. And the most expensive one sold for an eye-watering $170K at the height of its popularity. These blockchain solutions for the sports industry have limitless potential. Consider the possibility of fans being able to buy limited-edition player cards or earning rewards. Digital collectibles are becoming common in Major League Baseball in the United States. They are enabling fans from all over the world to buy All-Star cards for a variety of prices. This not only generates extra revenue but also appeals to a younger generation of sports fans.
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In the world of sports, blockchain technology can make buying, storing, and even exchanging tickets simpler and safer. Fans who cannot attend an event, for example, can switch their ticket without penalty fees. This is possible due to blockchain's decentralized nature. It eliminates intermediaries and central actors (as well as insecure centralized systems). Thus, it results in a much more efficient user experience. No one may falsely claim to have purchased a ticket or challenge a price. It is because the data on the blockchain is immutable. Since blockchain-based ticketing systems can instantly validate tickets, it eliminates the risk of counterfeit tickets. Furthermore, in case of sporting events postpone or delay, rescheduling the entire procedure can be easier for organizers and end-users.
Also, Read | Exploring Blockchain-Based Digital Ticketing Management
The success of fan tokens stems from their ability to boost participation while also providing new revenue sources for teams. Fans can purchase tokens using FIAT currencies like dollars, pounds, and euros. Further, they can trade them for goods, collectibles, or unique experiences like a VIP "meet the player" experience. Premier League football clubs, from Manchester City to FC Barcelona, are using Fan tokens to benefit them. These clubs aim to increase revenue and engage with their fans. For example, FC Barcelona's $1.3 million first round of fan tokens sold out in under two hours.
Fans can connect with a team, players, win points, get discounts, and participate in a virtual ecosystem. It is all possible by using blockchain technology in sports to issue their virtual currencies.
Tokens also give supporters a sense of participation in a club's decision-making. They enable them to vote on things like the goal celebration song and the training kit color. FC Barcelona has an estimated 450 million fans worldwide, and thanks to blockchain technology, they can now reach them. As a result, blockchain technology in sports is assisting clubs in engaging and growing their foreign fan bases.
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To know more about how blockchain plays a crucial role in transforming the sports industry for all stakeholders, connect with our blockchain development experts.