Press "Enter" to skip to content

Sports and the Metaverse: Where 3D Worlds Collide

Every industry is trying to figure out how to position itself in the metaverse, and the sports world has a unique opportunity to drive innovation for the same reason game broadcasts are the last bastion of live television. Sports are inherently communal, and the premise of the metaverse is to create shared experiences, albeit updated for a tech-infused world. 

So, what is the metaverse? Well, no one can quite agree just yet. In fact, the metaverse as a name is quickly morphing into a marketing gimmick, added as a catch-all term for every new digital concoction to gain buzz and SEO at the expense of a clear product vision. Some, like Andre Llewellyn, the CMO of NFT maker Candy Digital, predict that the term “metaverse” will itself fade away just as “information superhighway” did as a synonym for the internet. 

Here’s what little consensus exists: There is no single metaverse but a collection of disparate 3D worlds, largely built on the blockchain, with the potential for connectivity. It’s a fan engagement tool, a revenue driver, an avenue for direct interaction. 

“The way that I define it is it’s the convergence of augmented reality, virtual reality, gamification, digital community and the physical world—that’s a lot,” said Greg Kahn, CEO of Emerging Tech Exchange on a panel he hosted. 

In the case of the Los Angeles Kings' foray into the metaverse, it all began with player capture.

In the case of the Los Angeles Kings’ foray into the metaverse, it all began with player capture.

Christine Moy, an Apollo Global Management partner who heads its digital assets division, called the metaverse “a hype topic” right now and described the evolution of the internet thusly: Web1 gave users the chance to read information that was presented. Web2, which is inclusive of social media, offered the ability to read and write. 

“Web3 is read, write and own—the ability to own a piece of the internet and be able to commercialize your piece of it,” said Moy, a former JP Morgan managing director who led the bank’s metaverse strategy, said at SportTechie’s State of the Industry. 

That ownership piece is why the blockchain is critical. It creates an immutable record of ownership and is why non-fungible tokens (NFTs) are a key gateway for education and accessibility—a portal to the metaverse. From Dapper Labs’ NBA Top Shot to MLB’s partnership with Fanatics-owned Candy Digital, the NFL’s work with Ticketmaster, global soccer’s embrace of Sorare and Socios and Tom Brady’s Autograph give an indication of how leagues, teams, athletes and brands are focusing on the space. Everyone in sports, it seems, is minting an NFT. 

“It’s a significant movement,” Ivana Kirkbride, Meta’s director of product marketing for entertainment, said of NFTs.

Candy Digital's ticketing rendition

Candy Digital’s ticketing rendition

“Especially if you look at the amounts of transactions that are happening on NFT marketplaces like OpenSea, it’s a good point of entry. I also think it’s more about bridging between Web2 and Web3. The non-fungible token is a way to engage different communities of interest into how smart contracts work, into crypto, into other pieces of the commerce stack and Web3.” 

The other key beachhead for conceptualizing Web3 is gaming. “Esports events are a great example of blending the physical and digital worlds, and I think that’s going to be a core component of the metaverse,” said Take-Two Interactive’s head of data strategy and analytics, Jamyn Edis, who is also an adjunct at both Columbia and NYU. Experts routinely cite some popular esports titles as examples of foundational metaverses. 

“Look at the new video games—the Fortnites, the Roblox—those are community-based games where you as an individual can play and participate however you want,” said Baron Davis, the retired NBA star who has become an active tech investor and metaverse creator. “And I think that in this Web3 structure, it’s actually taking it a step further and saying, ‘Let’s build a video game, where everybody’s a builder in the video game.’” 

The Atlanta Braves, for example, built a digital copy of Truist Park in the metaverse after witnessing the phenomenon of Travis Scott’s April 2020 concert within the popular video game Fortnite. “That was eye-opening for us because you had this traditional in-person experience that was now happening in a virtual environment,” said Braves VP of marketing and innovation Greg Mize. Digital Truist Park, which operates on Epic Games’ Unreal Engine and was built by digital developer Surreal Events, will soon host events. The Braves view it as a separate venue. 

While Digital Truist Park is at the frontier of sports’ foray into the metaverse, it is not alone. Hawk-Eye is working with Manchester City to render its Etihad Stadium in similar fashion. At the beginning of the 2022 playoffs, Google and the NBA launched Pixel Arena, a slightly different approach but with the same core virtual immersive experience. Italy’s Serie A livestreamed a match to certain markets in May 2022 in virtual worlds platform The Nemesis, in which fans could use non-fungible tokens (NFTs) as tickets and interactive with other avatars.  

All of this is to say a lot is happening, but there’s not yet a clear north star directing construction. Even Meta, née Facebook, which is angling to take the lead on metaverse creation, understands the need for flexibility. 

“The challenge right now is we’re building this somewhat blind, right?” said Rob Shaw, director of North American sports partnerships for Meta. “Until we start having people regularly use it, we don’t know exactly what it should look like.” 

Why is sports such a good metaverse case study?

Fandom fosters connections—both peer-to-peer and follower-to-team or athlete—and digital world builders in and around sports can shape this new frontier. These new Web3 constructs are, at minimum, a fan engagement tool, but there’s huge potential for revenue. Digital venues can sell tickets; there will be expansive sponsorship inventory; merchandise can be sold for avatars; and so on.

Do I need an avatar?

Most of the time. Experiences will vary, but users will be rendered digitally in many virtual worlds. Apparel can be sold as NFTs and, ideally, be worn across worlds.

So how many metaverses are there and will I have to start over in each one?

Though disjointed now, everyone’s hope is the worlds all connect, like a digital golden spike in the transcontinental railroad. Davis, for instance, envisioned his metaverse as “like Grand Central Station, where we’ll be connecting to different metaverses.”  

Meta has opened its Horizon Worlds as an early rendition of digital world building, which will have the interconnected capabilities. “Our company has been very clear that what we are developing is not intended to be a walled garden,” Shaw said. “It is intended to allow people to have shared experiences, whether you’re on one platform or another.” 

Fans attending the Rams' NFC Championship game had NFT opportunities as a keepsake.

Fans attending the Rams’ NFC Championship game had NFT opportunities as a keepsake.


Do I need special hardware?

Not yet, anyway. The prevailing vision for the metaverse includes VR goggles or at least AR glasses for users to engage and interact. Meta, for example, is offering both VR hardware with its Oculus Quest series of headsets as well as AR options, such as its Ray Ban-branded smart glasses. But don’t expect anything universal. 

As Turner Sports SVP Yang Adija said, “I don’t think there is going to be one singular experience in terms of what that metaverse looks. People will want to do it both from a lean-back and lean-in engagement and participation and monetization standpoint.” 

Mize said the Braves intentionally developed Digital Truist Park to be accessible for anyone with a web browser and an internet connection. Even Meta is now developing a web version of its Horizon Worlds platform. But there will always be a trade-off with how rich and immersive the experience will be. 


Will it be expensive?

Not necessarily. Don’t let the sticker shock of those early NBA Top Shot NFT price tags—a LeBron James dunk sold for $387,600 in April 2021—deter you. The market is correcting, and most NFTs are relatively affordable. Meta’s founding CEO, Mark Zuckerberg, has pledged to keep his company’s apps free and to sell its devices either at cost or at a subsidized price. 

“My company is trying to double down on access,” Shaw said. “Right now, if you look at the space, particularly with NFTs, it’s a little exclusive. I think that’s just the nature of its current reach [which] is not as broad because it really requires blockchain as a fundamental way to have it funded and copied and being able to have it visible and displayed. That is our aspiration is for across all of our platforms—obviously, Facebook, Instagram, WhatsApp, Messenger—in order to make it much easier for people to actually display.” 

The Financial Times reported that the NFT market was worth $40 billion, but some 80% of NFT value is limited to just 9% of the community. Many foresee a democratization of those tokens coming soon. 

“I do know that space will have more people involved where it’s not just going to be crypto-enthusiasts,” Candy Digital’s Llewellyn said. “On-ramps for getting into the space are going to be easier. People are going to become comfortable using their Web3 wallets.” 


Are NFTs just a new form of digital collectible?

No. That might be how they were popularized, but they key buzzword around NFTs is “utility.” Creators are trying to reposition NFTs as a membership—sure, there may be a collectible component, but it will also unlock access to exclusive opportunities. That could mean parties and tailgates, or it could mean subscriptions to gated content and Discord channels. The Players’ Lounge is a college-focused startup working with Dapper Labs and GigLabs on exactly that.  

“An NFT, when done right, is not about the art,” said The Players’ Lounge CEO Ty Frix.  

Holding an NFT can also grant the owner a vote in a decentralized autonomous organization (DAO); crypto investors have already rallied to create a DAO that might one day own an NBA franchise. 

Ticketing may soon be linked to the blockchain. Right now, the NFL with Ticketmaster and MLB with Candy Digital are offering commemorative NFT tickets, but soon those tokens could be underpinning venue access entirely. 

New apps are helping facilitate NFT minting for athletes and other creators. Orreco’s new @thlete app, for instance, is a player-centric data passport with a built-in minting feature—a testament to how commonplace the practice has become. 

You come off the court, within minutes, there’s all your stats, bang, it’s autogenerated as an NFT for you,” Orreco CEO Brian Moore said. You can publish or generate value for yourself or for your charity foundation or your family. 

Green Park Sports raised $31 million in advance of its first NFT release.

Green Park Sports raised $31 million in advance of its first NFT release.


Is venture money getting involved?

Big time. For example, Dapper Labs raised $305 million and $250 million over two investment rounds in 2021 with a valuation of $7.6 billion, and Sorare raised a $680 million Series B round for a $4.3 billion valuation. Autograph announced a $170 million Series B. Those rank near the top of the space, but funding is plentiful right now. GreenPark Sports raised $31 million in advance of its first NFT release. 

Crypto.com purchased the naming rights to what was the Staples Center for a reported $700 million. Cryptocurrency exchange FTX signed its own blockbuster partnership with MLB. 

“Honestly, this may be the most exciting movement underway,” added Drive by Draftkings CEO Meredith McPherron. “When you dig underneath it around why is all this happening—crypto, Web3, metaverse, play-to-earn games—people’s movement into this space gets to a level of ownership around one’s experience.” 

How interactive will it be?

Shaw is clear that Meta’s investment in this space is born from a belief that it will be “incredibly social.”  

“What people expect right now is the ability to connect and have a conversation,” Mize said, “and so you will see a very connected, interactive experience, not just between attendees in Digital Truist Park and Braves representative like our players, but peer to peer. That is paramount in these experiences.” 

In some cases, those interactions will extend beyond social into commercial. Microeconomies and microtransactions will become prevalent, much as they have in the gaming world. 

“I really think the peer-to-peer economic model is going to really change how the industry aligns itself and how we build things on top of that,” Adija said. 


How might this affect game broadcasts?

Leagues and rightsholders are mostly in preparation phase, but some elements are coming into focus. Venues like Digital Truist Park will allow distant fans to congregate and watch together. Early iterations include the Brooklyn Nets’ Netaverse and MLB’s FieldVision, both of which rely on multi-camera optical tracking systems to produce renderings in which the producer can replay the action from any vantage point. The NHL held a demo with Beyond Sport that used puck and player tracking data to create animations that might appeal to a younger audience.  

“When you think about Web3, metaverse, these new environments and how we can start as a league to get integrated into those spaces and those environments,” NHL EVP of business development and innovation Dave Lehanski said, “once you look at that, you’ll be like, ‘I get it.’ If you’ve got a kid, and you’ve ever seen Roblox or Fortnite or any of these things, you’ll be like, ‘I could see, as crazy as it might be, my avatars running up the snowy mountain and when it gets to the top, there’s a rink and there’s the Winter Classic, right?’” 


How will the dynamic change between fans and teams?

The possibility of a more direct connection exists. 

“If anything, teams and leagues should have a greater relationship with their fans than the status quo,” Shaw said. “I watch the Mets game every night, but MLB doesn’t know that. The Mets don’t know on that. Once the teams and the leagues are able to actually understand their audience better, they’re going to be able to start unlocking better experiences for them.” 

Just as we’ve already seen on various social media platforms, the IP from the teams and leagues can be a helpful starting point for content. NBA commissioner Adam Silver has discussed wanting his league’s arenas to be thought of as “broadcast studios” in which the fans themselves are contributing to that conversation. 

The way that I define it is it’s the convergence of augmented reality, virtual reality, gamification, digital community and the physical world—that’s a lot.

                                                                             –Greg Kahn, CEO of Emerging Tech Exchange 

“It’s been exciting to watch the power of creators,” Phoenix Suns chief revenue officer Dan Costello said. “The opportunity is for people to stand back and create and innovate on top of a business that’s really full of engagement opportunities and giving more power to our fans. That’s where we’re seeing this tidal wave of opportunity.” 

What remains essential, though, is that the relationship be organic and two-way. 

“The key here is being part of the community versus feeling like you’re marketing to them,” Llewellyn said. 


What other use cases have arisen?
 

Fitness. Shaw admitted that, a year ago, he wouldn’t have guessed this, but Meta has observed a huge uptick in boxing, dancing and other physical activities—so much so that its new Quest headset and controllers will be more sweat-proof and with better grips.