SportsPro: what will Sports Tech look like in 2022?
A year ago, we have been asked by SportsPro to give our thoughts on the future of sports tech and its main trends in 2022. Thanks to our CSO, Jean-Baptiste Alliot, we shaped some predictions about what could happen in 2021, and we decided to do it again for 2022.
In short, 2021 has been a landmark for the sports industry, the global pandemic still continues to disrupt the sports ecosystem (match postponed, stadium restrictions…), broadcasters, clubs, and rights holders have been forced to adapt even more. But, let’s put aside 2021 and let’s predict what could possibly happen in 2022.
NFTs democratization across the entire sports ecosystem
NFTs have exploded in popularity as many organizations have seen them as a new way to engage with fans while generating new revenue streams. Some of the biggest sports organisations have embraced this new blockchain-based technology and significant partnerships have been concluded (NBA & Dapper Labs, Sorare & DFL, UEFA & Topps, RLWC2021 & NuArca, Team GB & Tokens), confirming the real interest of both sports organizations and tokens/NFTs/crypto companies’ to collaborate.
From our perspective, it’s only the beginning and I truly think that we will see more and more collaborations in 2022. Let’s take a look at early January 2022, the Australian Open has launched its own NFT collection, AO Art Ball, and has created an official AO space in the metaverse through Decentraland. Each NFT ball has a relationship with real data on the tennis court. This will become a bit more “mainstream” as many organisations will keep developing this activity and many new ones will start their own initiative.
But before conquering the entire market, it will be necessary to reinforce integrity and transparency on certain topics, as shown by the recent FC Barcelona cancellation deal with the NFT marketplace Ownix due to fraud. The NFT market has yet to be regulated and the enthusiasm towards this new technology must not prevail over reason. Early 2021, we mentioned some of these pitfalls which must be considered as these activities develop: speculation & money laundering, environmental issues, and crypto is confusing.
Digital collectibles don't come alone and are part of a broader digital revolution. Indeed, NFTs/Tokens are some of the primary building blocks in the future digital and interconnected worlds, we will spend most of our time.
Metaverses, new lands to be strategically explored
We already announced it back in 2020 but it is now about to really take shape: the rise of Metaverses, these new virtual worlds where people can go and do dozens of real-life activities.
Mostly coming from the gaming industry and by companies such as Epic games or Roblox Studios, the Metaverse is meant to be the first step to a new version of the internet, where our interactions will be even more virtual. Major sports organisations have already experimented with it, the most recent one being Nike and the creation of NIKELAND within Roblox. And we have all seen the Travis Scott concert in Fortnite. As technologies are evolving, our industry has to first understand all the possibilities and new opportunities that it can bring so organisations will be able to create new powerful and attractive projects around it.
These activations are only happening in what we call Web2 (read and write) but there is an enormous potential related to the NFT/Tokens/Creator Economy part when it comes to Web3 in which you can read, write but also OWN part of what you are creating and spending time on.
DAOs, a future way to engage more the fans?
The metaverse concept has raised the premise of a new internet based system where decentralized applications run on the blockchain technology. With the creation of this new internet, ownership will be reinforced, and almost anyone will be able to invest and participate in communities/protocols. 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, one DAO’s might be able to own an entire organisation soon?
Which sector within sports tech will see the greatest growth in 2022?
JB: From my perspective, the greatest growth within sports tech in 2022 will remain around the fan experience. Around 78% of investments in Sports Tech are “fan experience related” compared to “in-venue/stadium experience” (around 16%) and “sport performance'' (around 6%). With the rise of DAO’s, NFTs and community-oriented projects, fans will be more and more interested in having a deeper involvement within sports organizations. 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 personalization, especially when we think about the betting sector.
If I take a look back to what we wrote in January 2021, I believe that the 2022 trends will be quite similar but with new products:
Fan experience - Digital (including Web3) & Media products:
the fan reward/loyalty programmes will lead the way with the market maturation of NFTS/Tokens/Creator Economy; while at the same time, we will see an acceleration on the data side with better tech stack and acculturation from leading sports organizations. All professionals should also keep a close eye on all the M&As happening in the gaming industry as we know game engines are the construction tools for the Metaverse. Bold moves may come from Sony acquiring EA after we have seen Microsoft acquire Blizzard Activision.
Well-being economy, related to connected fitness and mental health, especially with the rise of women’s sports:
pandemic has accelerated the digital transformation of fitness clubs and the rise of many Apps and products allowing anyone to train at home by himself/herself or with a remote coach and/or friends. Today, we are really seeing convergence with other industry sectors like health and nutrition but this “well being economy” sustained primarily by sport/physical activity is still at an early stage and needs to mature. People and especially women are facing too much mental load and too little time to take care of themselves, with various lifestyles - The need for healthy life for all, that includes better nutrition, better aging and a happy life with less health care is now a priority. The potential of such a market is enormous and big brands have now accelerated their investments and prioritization in it by launching their own products and initiatives. This industry might not be the most visible in 2022 but it will certainly gain in maturity and see heavy investments which will make it more and more a reality.
As we moved into 2022 already, we find it useful to think about what will be the next generations of startups we should invest in. It can help you define your roadmap and think about the next big opportunity.
Any ideas to invest in 2022?
JB: if you are an investor, looking at the next big opportunity; I believe established start-ups 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 start-up whose value proposition can enrich and complement already existing ones in the industries that are heavily backed by sports organisations, broadcasters and brands.
Last year, we mentioned Uplift Labs, Rezzil, Edisn.ai and Slate. All of these made successful fund raises in 2021, we already know more successful announcements are on their way and Edisn.ai even got acquired by FuboTV. WaveXR made the show with its last concert of Justin Bieber and the other start-ups we mentioned keep pushing with acquisitions or fund raises to be officially announced.
If I had to mention one and I will be very biased on this call since we have been working with them for a while now is Slate. They combine everything to make a successful start-up and the team showed great leadership and flexibility over the past months for key decisions to be made. The product is great and keeps improving while the business keeps growing at a fast pace with excellent perspectives. This is for me a no brainer today!
Now, for 2022, if I have to take more risks and quote a few start-ups which are very much in the early stage phase, I believe my relocation to Paris is a reason to think about French start-ups with great potential, Union seems to be one of the most relevant, as it evolves in a fast growing market (and sometimes shaky): connected fitness. In addition to that, Immersiv should still be on your radar should they open a fundraise given their excellent product and traction. As I said last year, I would still consider investing in two other start-ups I personally love and find relevant every day in our industry: GreenPark Sports and Buzzer.
Finally, regarding the current frenzy around the metaverse, I would be particularly attentive to the value proposition offered by Move.ai. This startup has developed a technology using only action cameras to instantly export motion capture data to any platform. Such a faster and more profitable solution could be the gateway for any organization willing to digitalize its physical environment and the potential for growth go way beyond the sports industry. To follow closely.
Ultimately, I would just mention Edge which I have been following for years now and which is doing a great job with successful announcements to come for sure - This one is more of a personal kind with Adam Whyte being one of a kind entrepreneur!
How should sports organisations embrace tech trends or products?
JB: Products heading to sports usually come from other industries and/or have been deployed by organisations which have an advanced maturity when it comes to technology, staff knowledge and innovation.
Unfortunately, for now and especially after the pandemic which has had a severe financial impact on a vast majority of sports organisations, these latter are mostly not mature enough to adopt these new technologies to cope with the trends we discussed above.
You must learn to crawl before you can walk - The sport industry still needs time and guidance to best structure its business and technology capacities, especially around data, to really take advantage of the new economic funnels we have described above.
I keep asserting that there is both “an innovation and a data debt” within the sports industry, that 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.
So far, products or trends developed in other industries do not benefit the sports industry, as the level of maturity of the sector is not sufficient to take full advantage of 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. This is what sports organisations must invest in to make sure they can best leverage the new upcoming opportunities in the Sports Tech era.
Final thought
While some of these predictions may seem bold or eccentric, it's not a matter of "if" but rather "when". We hope you enjoyed this article, learned about something new or found inspiration as 2022 is sure to hold many changes. We look forward to seeing how the sports industry will adapt to this digital revolution.