When NFT sales are discussed, there’s a tendency to focus on revenues. The big name profile picture collections like Cryptopunks and Bored Ape Yacht Club are constantly at or near the top of the leaderboard. While the transactions for those collections are high value, there are very few of them. In contrast, sports and games are where the action is in terms of volume.
And the contrast is dramatic.
Revenue leader BAYC had just 296 NFT transactions during the last 30 days but turned over $32.8 million, according to CryptoSlam. Whereas NFL All Day is second on the charts volume-wise, with 482,000 transactions and revenues of $15 million.
NFL All Day, fantasy football collectibles Sorare, and NBA Top Shot are in slots two, four and six by number of transactions. Five of the top ten collections by volume are sports, three are games, and one is a game-related collectible.
It would be very easy to attribute the success of sports collections such as Sorare and Dapper Lab’s NFL All Day and NBA Top Shot to massive fan bases. Make no mistake, that helps. But in both cases, they have innovations that are pretty subtle, so much so that they appear obvious, especially in comparison to the likes of Uber and AirBNB.
The genius of video moments
Dapper Labs could have launched animated collectible sports cards. But it chose video instead, which is immensely more lucrative financially. Most sports followers have a limited number of favorite athletes they follow closely. So when it comes to collectible cards, there aren’t that many from which to choose.
But each athlete has the potential to star in multiple video moments during every game. Hence, creating an almost unlimited number of collectibles, although of course, some will be better than others.
That has been borne out with NBA Top Shot, the first of Dapper’s sports NFT initiatives, which surpassed $1 billion in cumulative trades a few months back.
The combination of a large fan base and ongoing engagement is consistent with Dapper’s stated objective of attracting newcomers to the cryptocurrency ecosystem.
While Sorare is in a different segment from Dapper, its business model also encourages more sales. It took the concept of fantasy sports games which have been around for decades and added the web3 tweak of turning the players in your fantasy team into NFTs. Active fantasy game players rarely keep the same team all the time, hence the desire to buy new ones or trade regularly.
With success comes VC money
In hindsight, big hits often look easy. But we remember Sorare’s early days when there were a tiny number of transactions. Despite that, it managed to sign up numerous football teams. The company’s tenacity was rewarded last year with a massive Series B financing round of $680 million at a $4.3 billion valuation.
It has used its deep pockets to double down on soccer with deals with leagues such as La Liga, Bundesliga, Serie A and MLS. Since then, it has branched out of football into golf and baseball, signing licensing deals with the PGA Tour and MLB. With Serena Williams as an adviser, one might expect tennis to follow soon. A Morningstar survey showed that tennis and golf are among the most lucrative sports in willingness to wager money.
Dapper Labs has also done well for itself. At the end of last year, it raised $250 million at a rumored $7.5 billion valuation bringing cumulative funds raised to more than $600 million. It also founded the Flow blockchain on which all its NFTs are dropped.