Non-fungible tokens (NFTs) are poised to become “critical pieces of the sports technology infrastructure,” PricewaterhouseCoopers LLP (PwC), a multinational professional services network that offers business advisory services, said in its latest report.
Titled ‘Sports Outlook 2022,’ the report dives into the potential of NFTs within the sports industry, arguing that digital assets are among the top ten major trends shaping the future of sports.
NFTs, which are unique, non-interchangeable digital assets stored on a blockchain, have created an element of scarcity in the digital world for the first time in the history of the Internet, the report said, noting at least three use cases for these assets.
The most widespread application area for digital assets lies in collectibles. For decades, trading cards have been popular and, in fact, have become a big business. In a similar sense, PwC expects collectible NFTs to become the digital version of trading cards.
“Think about traditional memorabilia: The paper ticket stub for the greatest scoring NBA player recently sold for nearly a half million dollars,” the report said. “For the next generation, perhaps a digital stub is authenticated and features some exclusive content. Would someone pay [USD] 1 million for it?”
The report also mentions that Dapper Labs’ NBA Top Shot has already proven this. NBA Top Shot is an NFT marketplace where fans can buy, sell and trade NBA moments that are embedded in an NFT. By late March 2021, the marketplace had done around USD 500m in sales with more than 800,000 accounts.
The second big use case for digital assets is considered to be season ticket member (STM) NFTs, which could provide holders with tokenized passes and improve the experience of a club’s loyal fans.
“This could include special VIP areas of the venue, discounts at concession stands or other traditional benefits of season tickets — with full confidence in their authenticity,” PwC said, adding that STMs could create value for both sponsors and fans.
Lastly, the report argues that NFTs enable clubs to provide users with virtual access tokens and offer them a virtual experience. However, this would require a combination of digital assets and the metaverse, including both fungible and non-fungible tokens.
“Virtual access tokens can allow special access during games, plus new forms of social experiences and opportunities to engage with teams, athletes and other fans within a metaverse,” PwC said.
More specifically, virtual access tokens can be another version of season tickets providing holders with unique video content, such as player cams, bench cams, or even locker-room access. This could prove useful for fans who can’t attend games in person.
As reported, trading in NFTs has plummeted recently as geopolitical tensions and rising uncertainty continue to push investors toward safe-haven assets.