When NFT sales are discussed, there is a tendency to focus on revenue. The profile picture collections of big names like Cryptopunks and Bored Ape Yacht Club are consistently at or near the top of the leaderboard. Although the transactions for these collections are of great value, they are very few. In contrast, sports and games are where the action is in terms of volume.
And the contrast is dramatic.
Revenue leader BAYC only made 296 NFT transactions in the past 30 days, but generated $32.8 million, according to CryptoSlam. While NFL All Day ranks second in terms of volume, with 482,000 transactions and $15 million in revenue.
NFL All Day, Sorare, and NBA Top Shot Fantasy Football Collectibles are in slots two, four, and six in deal count. Five of the top ten collections by volume are sports, three are games, and one is a gaming-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 fanbases. Don’t get me wrong, it helps. But in both cases, they have quite subtle innovations, so much so that they seem obvious, especially in comparison to Uber and AirBNB.
The genius of video moments
Dapper Labs could have launched collectible animated sports cards. But he chose video instead, which is immensely more financially lucrative. Most sports fans have a limited number of favorite athletes they follow closely. So when it comes to trading cards, there aren’t many to choose from.
But every athlete has the potential to play in multiple video moments every game. Therefore, creating an almost unlimited number of collectibles, although of course some will be better than others.
This was confirmed with NBA Top Shot, the first of Dapper’s NFT sports initiatives, which topped $1 billion in cumulative trades a few months ago.
The combination of a large fanbase and continued engagement is in line with Dapper’s stated goal of attracting newcomers to the cryptocurrency ecosystem.
While Sorare is in a different segment from Dapper, her business model also encourages more sales. It took the concept of fantasy sports games that have been around for decades and added the web3 tweak to turn your fantasy team players into NFT. 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 seem easy. But we remember the beginnings of Sorare where there were a tiny number of transactions. Despite this, he managed to register many football teams. The company’s tenacity was rewarded last year with a massive $680 million Series B funding at a $4.3 billion valuation.
He used his deep pockets to double down on football with deals with leagues including La Liga, Bundesliga, Serie A and MLS. Since then, he has branched out from football to golf and baseball, signing licensing deals with the PGA Tour and MLB. With Serena Williams as an advisor, one would expect tennis to follow soon. A Morningstar survey showed that tennis and golf are among the most lucrative sports in terms of willingness to bet money.
Dapper Labs also did well. At the end of last year, it raised $250 million at an assumed valuation of $7.5 billion, bringing cumulative funds raised to more than $600 million. He also founded the Flow blockchain on which all his NFTs are deposited.