Is sport’s future really in the metaverse? Will Web 3.0 and the decentralised internet genuinely revolutionise sports administration and fandom? Are non-fungible tokens (NFTs) a virtual gateway into a golden money-making opportunity, or an overhyped fad that will recede as quickly as it has emerged?
Such questions are occupying minds across the sports industry right now. While the jury remains out on many of these rapidly advancing innovations, it is clear that new technological solutions will have a dramatic impact on the future of all areas of the sports business, from media distribution and content production to betting, gaming, grassroots participation, athletic performance, and everything in between.
With this in mind, SportsPro has once again canvassed the opinions of a diverse group of investors and experts from across the global sports tech ecosystem to put together its pick of 20 early-stage companies who should be on the radar of every investor and sports organisation in 2022. Here, this year’s contributors share their views on the standout companies and top trends to look out for over the next 12 months.
Meredith McPherron:
We are tracking several key trends across the sports and gaming ecosystem and will highlight four that we are particularly focused on heading into 2022. First, one of most notable inflections has been in NFT gaming, driven by advancing blockchain and cryptocurrency tech and a movement into the metaverse. Embracing the idea of an open economy made possible by the decentralised model of Web 3.0, players are rewarded by both playing and spending time in the gaming ecosystem with meaningful economic and social benefits.
Second, we anticipate increasing opportunities to monetise fan interest and attention during live sports including in-game betting, second screen viewing experiences, and AR/VR overlays. Third, in human performance, biometric tracking continues to surge with our insatiable desire to become better versions of ourselves by optimising movement, mental health/performance, and levels of strain and recovery.
Last, immersive tech is finding a variety of use cases across sports such as physical training, mental health/performance optimisation, and improvements to the fan experience.
Roger Mitchell:
The move to DTC and tech that delivers a personalised customisable integrated feed to viewers. Somewhere where second and third screen all sit together, in one screen. Stickiness and increased ARPU.
Matilda Sung:
Sport has the benefit of touching numerous elements of our lives: entertainment, health and fitness, gaming, spectator pasttime, collectors, etc. As such, its prime position with end consumers enable it to really make use of and push the envelope when it comes to new technology.
Specifically, we believe Web 3.0 and Data 3.0 will both be key technologies that will drive many sports tech innovations in 2022. At Ludis, we have been closely monitoring the Web 3.0 movement while also active in the vibrant startup ecosystem. The market is at the precipice of a monumental shift in technology – Web 3.0 is defining the next wave of the internet and how users will consume, communicate, and interact.
While Web 3.0 occupied much of the front page attention in 2021, we cannot ignore the power of Data 3.0. The last few years saw many sport clubs, leagues and federations ramp up data infrastructure and business intelligence talent. 2022 will see more entities follow this path, but we will also start to see the winners emerge. This will include entities who are actively benefitting from algorithmic insights (e.g. extracting more value from their most loyal fans, increasing time spent on apps per user, etc.) and integrating data learnings across functions and workflows (e.g. adjusting staffing at games in real time).
Beyond tech trends, we expect startups and incumbents alike will start to zero in on a more streamlined user experience – those who simplify and delight will stand to scale more quickly and create a more sticky user base. Sports betting and gaming are areas where we expect to see more simplified user interfaces, especially in the US where the casual and non-avid users potentially make up a large portion of the addressable market.
We expect startups and incumbents alike will start to zero in on a more streamlined user experience.
Thomas Alomes:
Hyper-personalisation across both the physical performance and the off-field business areas of sports. In sports performance, the next generation of health and fitness wearables is not just passive data capture (e.g. 10,000 steps) but applies deep longitudinal analysis which results in actionable insights designed to promote behavioural changes. This is helping people from all walks of life, from professional athletes to weekend warriors, to improve their physical and mental performance.
In sports business, modern fans have a growing expectation of being able to watch what they want, how they want and when they want to. Solutions like Buzzer are an insight into the changing dynamics of how casual fans want to engage with sports, which will be accelerated by the growing market penetration of sports betting across the US.
Benjamin Penkert:
2021 was dominated by three trends which we expect to continue in 2022. For digital and connected fitness, we predict that the merging of physical spaces, smart devices and digital classes into one omnichannel fluid fitness experience is going to be a big part of the future. For NFTs, we believe that the real potential is beyond player cards and highlight clips and expect new products to develop and mature in 2022 – for example, play-to-earn and/or event-related offerings which also create benefits in the metaverse.
And for betting and fantasy sports, we expect the behemoths in the market to grow and expand even further, always acting based on the newest regulation updates, and a continued integration with content offerings, especially in the North American market.
JB Alliot:
2022 will see the emergence of more decentralised autonomous organisations (DAOs) – companies in which the governance is based on community and the funding based on a kind of crowdfunding that issues tokens. As DAOs’ operations are fully transparent and global, sports organisations will see there a bunch of new opportunities to further involve their fans by giving them a voice and by implicating them more in their institutions. And who knows, as the technology evolves, could one DAO be able to own an entire organisation soon?
DAOs are also disrupting the traditional model of investment and VCs have to rethink how they help companies raise money.
Andreas Heyden:
More input data, with new ways of tracking, may it be new sensors, may it be new models like limb-tracking posture detection, or may it be a chip in a ball. I think we will see more digital broadcasting applications, shutting off satellites, IP distribution, remote editing tools and distributed teams. And thirdly, for the customer, I would say the extension of reality with new entertainment formats and devices.
There is growing demand for platforms that integrate social and fantasy gaming into live broadcasts (Photo credit: AriSports)
Roger Mitchell:
Use of AI in on-field performance. All sports calendars are getting massively congested. Tech that gives visibility on the actual risk of player physical overload will become key.
Thomas Alomes:
The greatest growth in terms of mainstreaming into the public consciousness (but not necessarily in investment dollars) would be augmented reality and mixed reality. Expect to see it a regular part of sports broadcasts and integrated into a range of apps and products focused on the “real-world” physical experience. The recent US$9 billion valuation of Niantic, the AR platform developing games like Pokémon Go, and the acquisition by Meta of VR fitness company Within are both good examples.
Benjamin Penkert:
NFTs. It’s gold rush times and for good reason, as it is rare to witness the rise of an entirely new asset class that is natively digital and therefore fitting perfectly into the world that we live in today and even more so in the future.
While player cards and highlights clips are just the beginning, and will likely keep the sports industry busy for quite some time, all paths lead towards the metaverse and Web 3, dominated by virtual worlds and a decentralised approach. We expect many creative and interesting offerings to pop up in 2022, while scepticism will vanish more and more. Potential use cases seem endless and will not only cover fans but also athletes and the people who manage the sports industry.
Andreas Heyden:
I would say the change of customer behaviour in the consumption of media products is going to be accelerated. From linear, to on demand digital, to social interactive viewing.
I think we have just scratched the surface when it comes to creating a social fireplace moment on an alternative party platform, where you can watch with your friends together. I think the service we’ve seen were overall nice trials, but nobody has cracked the code there. We’ve shown through the Bundesliga Interactive Feed how to enrich a linear digital broadcast with additional layers of information and entertainment. But also there, we just have just scratched the surface.
The third one would be: can you increase the amount of viewers by “unbundling” and offering sports packages direct to consumer? Or can you increase the number of additional services on top which create a more immersive viewing experience for an OTT platform?
Metaverse is the obvious buzzword of the year, but we’re still a long way from realising its true potential.
JB Alliot:
From my perspective, the greatest growth within sports tech in 2022 will remain around the fan experience. Around 78 per cent of investments in sports tech are “fan experience related” compared to “in-venue/stadium experience” (around 16 per cent) and “sport performance” (around six per cent). With the rise of DAOs, NFTs and community oriented projects, fans will be more and more interested in having a deeper involvement within sports organisations. These new technologies will enable sports organisations to focus on rewarding them and creating more loyalty.
However, all sports tech investments within the fan experience category will not solely be dedicated to NFTs/tokens. Data capabilities – from its collection, to analysis and insights – will continue to grow, especially with regards to the next-generation of viewing experiences. New ways to engage, watch and consume sports with digital overlays operated remotely will gain in sophistication along with interactivity and personalisation, especially when we think about the betting sector.
Melissa Payne:
AI because I love the idea of having control of the cameras – i.e. becoming the producer from my own living room (unilaterally or via remote engagement with your mates). With LiveLike, for example, you and your friends can be fully immersed into a match and control the output, replays, angles/viewpoint, etc, rather than one producer/director pumping out a world feed of what he/she feels is the best format.
Also biometrics because fans want more than just to watch the game or match live. They want to know the heart rate, calories burnt, blood pressure, etc, of the athlete. It’s similar with the Tour de France or, less on the human and more on the car, Formula One cars which have 200 sensors on board for reporting various data continuously. Fans are now more data-driven than ever before.
Connected fitness companies like Hammerhead help both amateur and elite cyclists achieve marginal gains (Photo credit: Hammerhead)
Thomas Alomes:
Metaverse is the obvious hot-topic buzzword of the year, but we’re still a long way from realising its true potential. So looking for products that can meaningfully impact the continued conflation of digital and physical experiences is where I would place my bets. Specifically blockchain, including digital collectibles and experiences, holds the key to how a significant part of this comes to fruition for sports.
Matilda Sung:
A product or service that is focused on weaving together the multiple points of fan engagement experiences (viewing, gaming, interactivity, betting, etc.) across both the online and offline worlds. Currently there are too many entry points to standalone or tacked-on experiences. A platform that can seamlessly offer three or four of the five key experiences in sports consumption consolidated in a single place would really hit the nail on the head.
Benjamin Penkert:
I would invest in The Football Club as they combine fantasy sports, NFTs and lifestyle elements into one compelling offering. They understand that virtual merch is going to be a billion-dollar industry thanks to the metaverse and have positioned themselves very well, for example with a partnership with the German Football League (DFL). Plus the team behind the company is very strong and experienced.
JB Alliot:
If you are an investor, looking at the next big opportunity; I believe established startups with excellent traction in the fields we have described earlier do exist. To this extent, you are already late to invest in companies like Sorare, Socios.com, Tonal, etc. but you may want to find an early-stage startup whose value proposition can enrich and complement already existing ones in the industries that are heavily backed by sports organisations, broadcasters and brands.
Andreas Heyden:
Personally, I would invest in some kind of cloud middleware. I would invest in a company which is a middle piece in the “glass to glass” strategy. So I would not invest into the acquisition of video signals and sports data. I would not invest in the display of a product. I would invest into a next generation content production engine which utilises AI and creates media products that we were not able to produce before.
Are NFTs the future or an overhyped fad? (Photo credit: NBA Top Shot)
Roger Mitchell:
NFTs are real, but in many cases they are being overhyped by mediocre suppliers. I remain bullish on the use of blockchain and crypto in sport, but not all NFTs and tokens are quality.
Matilda Sung:
Non-fungible tokens – specifically NFTs just for the sake of minting NFTs. While we are generally positive about NFTs and the durability they have as an asset class of relevance, we also believe there will be some degree of market cleansing as less appealing or less valuable NFT products and services get swept out of the market.
We also believe that the value and role of NFTs (as it relates to economy, fan engagement, and collectibles) is still evolving; it is unlikely that NFTs will have just a single or even dual dimensional role in society. We can imagine NFTs holding monetary value, social value, and even interest-bearing or income-earning/appreciating value. We look forward to the next iteration of NFT applications and innovations.
Andreas Heyden:
I feel the general market of NFTs is very much hyped. I believe that NFTs are relevant, and their position in sports is very relevant. So, in the market itself, we play an important role, but the wider market has too many players around it, which could make it overhyped.
Thomas Alomes:
In sports performance: passive data collection devices that don’t give insights or recommendations. Last year I predicted that connected fitness and health, particularly recovery-focused solutions, would be the area to watch in 2021, citing Whoop as an example (valued at US$1.2 billion at the time and today valued at US$3.6 billion). The winners we’ve seen in that growth have been adding genuine value and personalising the fitness experience for users. The losers have been attempting to digitise the gym experience with “smart” products without adding enough value to their users. When evaluating these products, the simplest question to ask is: is this another set of high-tech bathroom scales – i.e. does it give the customer/user data without context or recommendation?
In sports business: crypto fan tokens. There’s huge potential in giving power to fans through direct representation in how a club is run (even for what seems like inconsequential decisions). However, too many of these deals seem like a short-sighted cash grab without an understanding of the true value exchange. This is not to mention the recently cancelled deals which has proved the old adage that if it sounds too good to be true, it probably is.
NFTs are real, but in many cases they are being overhyped by mediocre suppliers.
Benjamin Penkert:
I think that many “Peloton for X” products will have a difficult time, as Peloton itself is struggling and investors will look very carefully at all similar offerings. A year ago the situation would’ve been an entirely different one. Now, however, I’d expect a consolidation of existing players rather than many new companies making headlines.
Melissa Payne:
Annoying tech – such as VAR – that is overhyped and totally inconsistent. It causes more problems than it solves and needs uniformity and structure. The referee by definition should be the ‘sole arbiter of the game’, VAR should review the incident, pick the best angles to show the ref, but let he/she go to a screen pitchside and let them make their own decision.
JB Alliot:
I keep asserting that there is both “an innovation and a data debt” within the sports industry, which all leaders and executives must handle to ensure the gap is not widening and that the industry can be in a position to really benefit from the new trends we see emerging. This is still very true and the pandemic reinforced it.
Therefore, I would not necessarily mention a product or a trend because it is most certainly the level of maturity of the industry which is not sufficient to best leverage it. However, leading sports organisations are paving the way and more than ever showcasing that it is possible for all to succeed in that space if the required investments and preliminary work are made.
Web 3.0 and the metaverse are just crystallising our entry into the fourth industrial revolution which is characterised by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres. It is also marked by velocity as the speed of current breakthroughs has no historical precedent or scope.
This digital revolution requires you to be ready and to reinvent yourself. This is what sports organisations must invest in to make sure they can best leverage the new upcoming opportunities in the sports tech era.
This feature was originally published in Issue 116 of SportsPro magazine. Find out more about the edition here. To learn more about Ignition, SportsPro’s new home for the sports industry’s technological transformation, click here.
