By Loewe Tan
OG Esports, a European-based eSports organisation and two-time champions of the International Dota 2, has raked in up to US$1 million in top-line revenue from only three NFT drops in 2021. By utilising blockchain technology, the company was able to release three collections of digital artworks.
The NFTs (non-fungible tokens) were customised artworks and sold in a combination of closed and open auction, offering new avenues for broadcasters to engage and reach out to a bigger group of digital natives.
Its third NFT release last July sold 10 art pieces with 3,336 associated tokens … and brought in US$510,995 in 10 seconds!
Although NFT is proving to be an effective monetisation tool in eSports, how will NFT transform the eSports industry in the coming months?
As the Covid-19 pandemic forced sporting fans to go online, the global eSports audience grew by 11.7% last year, crossing the 500-million mark. While eSports’ global audience count is still far smaller than traditional sports broadcast, eSports has experienced a meteoric rise due to the advent of technologies, including blockchain and AI-powered interactive tools; thus, offering eSports broadcasters with alternative sources of revenue.
Normally, 69% of eSports revenue is derived from sponsorship and advertising, amounting to $837.3 million in 2022 (thus far), according to Newzoo, an agency that provides gaming market insights. But, there’s more. The rise of NFTs has provided organisations new ways to monetise eSports experience from digital merch to digital collectibles signed by popular eSports teams.
What is NFT?
NFT is a tokenised real-world tangible and intangible asset from real estates to music. Its cryptographic capabilities allow the token to be irreplicable, thus, making it unique and preventing fraud such as intellectual property theft. In simple term, it is a digital certificate of ownership for an asset.
Most recently, NFTs are used in eSports as ownerships for in-games items, key tournament highlights or even fan tokens. The opportunity for the marriage of both worlds is boundless; fans tokens, for instance, allow fans to earn rewards by watching the eSports streams on third-party channels such as YouTube and Twitch.
The tokens also provide the eSports broadcaster an alternative to raising capital, attracting institutional crypto investors. As such, NFTs can advance the eSports ecosystem and provide more structured revenue in the world of virtual games.
How can eSports broadcasters ride on the NFT bandwagon?
One of the most direct ways to integrate NFTs with gaming models is through auctions of signed collectibles. However, the hybrid brand engagement model can lead to security issues such as fake sellers or items. Therefore, Verasity, an all-in-one blockchain solution for eSports, provides enhanced proof-of-view to authenticate the NFT sellers and items to prevent fraud.
Verasity has also partner with Brightcove Media to offer eSports broadcasters with alternative ad stack, which is poised to eliminate ad fraud of about $100 billion a year.
Justin Barrett, Senior Vice-President of Sales at Brightcove in EMEA, says: “We are seeing tremendous growth in the eSports market around Europe and abroad.
“With the addition of Verasity to the Brightcove Marketplace, our customers can utilise Verasity’s ad-tech stack directly through the Brightcove Platform.
“Now, media organisations, fan brands and more people can seamlessly work with Verasity to deliver engaging, successful, and revenue-driving eSports events.”
The second most popular method is through in-games trades. Electronics Sport League (ESL), a first-tier eSports league, has partnered with Immutable X, a marketplace for NFTs, to offer its Counter-Strike (CS) fans access to transact and exchange NFT assets during its ESL Pro Tour in 2021.
Interactive innovations for further engagement.
Interactive live stream will continue to be instrumental in strengthening the core pillar of livestream: instant engagement. PAC-MAN community has tapped on Facebook Gaming to allow audiences to interact with the live streamers, allowing a new-age “play with streamer” experience.
Moreover, third-party platforms as such provides plug-to-play stacks, reducing the money and time spent on machine learning.
Furthermore, gamification tools such as polls allow audience to be featured on leadership board, keeping the audiences attentive to the livestreams. Brightcove is one such video solution platform that offers interactive elements such as CTAs, in-video purchases, chaptering, interactive video paths, and quizzes.
Kaltura, a video solution system, also offers live streamers dynamic home pages, polls, and quizzes to engage audiences. As videos continue to be the most widely consumed content in the world today, nesting clickable buttons within the video will continue to prevail as the dominant way to drive conversion for the sponsors of eSports.
The future of eSports
Contrary to popular believe, eSports is no longer just a sporting event. It is vital to see eSports as a platform that houses gaming, media, local culture and e-commerce, as more streams of money make their way into the eSports industry.
The advent of advanced technologies has strengthened the core pillar of eSports — instant community engagement … and e-commerce.
Indeed, broadcasters can help eSports organisers to capitalise on NFTs to gain extra revenue streams, expand their reach, increase average-minute audience, create new game experience, and attract new form of capital from the cryptocurrency domain. New interactive tools can also provide eSports better control over its brand message and boost viewership and conversion, resulting a win-win situation for stakeholders in the eSports ecosystem.