Fungible success: How to solve the biggest issue with NFTs in esports

NFTs in esports have a problem.

Hardcore fans, usually the first adopters of new technology or ideas, are highly mistrustful of any project involving the blockchain.

The fact is, however, that NFTs present opportunities for esports organisations and developers alike, both to build interesting fan experiences and — crucially — as a revenue stream.

The Story Mob, a gaming- and esports-focused communications and PR firm, understands the potential that Web3 poses for the industry. Communications Director Erika Satler told Esports Insider that she had seen an uptick in interest amongst organisations seeking to explain the value of Web3 to a sceptical gaming community. She saw an opportunity.

“As a gaming-focused agency, it’s important to see how the larger landscape is playing a pivotal role in our industry. We know [explaining NFTs] is about effectively conveying your message in a way that is digestible,” she commented.

The six-page report notes that despite the fact that developers worldwide are “infatuated” with Web3, player cynicism is still a major challenge. It attempts to justify the value of NFT projects to brands, and provides vital information on how to manage projects responsibly, ensuring that trust is built over time.

Satler and her team believe that esports and Web3 are an inevitable fit. “Competitive gaming and blockchain are both future-forward industries with a tonne of crossover. When you look at the broader esports landscape, these organisations are looking at how to monetise, so if a new emerging technology comes along, of course they consider it.”

The first lesson, the Mob argues, is to learn from the sector’s previous mistakes. Building trust through reliability is key, especially considering that many common cryptocurrency partners for esports teams are also nascent companies: TSM partner FTX was established just three years ago, while Twitch Rivals sponsor Crypto.com arrived in 2016. Polygon Studios, the company partnered with Dr Disrespect’s new game publisher to create a new competitive gaming title, was founded just a year ago.

Owner proactivity in protecting players is vital because leaks or rug-pulls build further community mistrust. Building Web3 experiences using so-called stablecoins helps secure the future of the crypto experience by ensuring that its value remains consistent, according to the whitepaper.

That said, Satler argues that a good communication strategy is equally important. “Lead with education so that people can create their own conclusions. … Make sure your messaging is clear and concise.”

The Story Mob’s other two tips focus on maintaining all-important trust in your product. “Explain why it’s important or relevant to your audience. Remember to always be transparent and authentic—gamers know BS.”

100 Thieves made an NFT drop look enviously easy when it launched its first NFT line last year, as a jargon-free video announcement. It led to 700,000 fans commemorating the team’s LCS win by claiming their own free NFTs. According to The Story Mob, the lesson — in an industry that is known to often struggle to monetise core products — is that fans love free gifts.

Satler explained that the value of NFT projects is also not always monetary: “It’s about community. Having an engaged audience is crucial, so perhaps it’s about utilising NFTs to encourage fandom.”

A lot is often made of NFTs as ‘cash grabs’, but The Story Mob argues that having a more long-term vision to bring fans in will ultimately result in more successful Web3 projects.

The paper contained some handy detail on how organisations should understand their fandom. Competitive gaming enthusiasts, the likely target of many esports teams, fall squarely into the ‘hardcore’ bracket, while players that might see esports and gaming as a social experience, or just want to be entertained, are dubbed ‘midcore gamers’. 

That distinction is vital for brands, especially so when it comes to NFTs. “To connect with your target audience and remain authentic, tailoring your strategy is key. Not all gamers are alike, just like no one PR strategy is the same,” Satler explained.

Existing Web3 esports campaigns already exemplify this more targeted approach to consumer relations. NFT experiences like Team Liquid’s collaboration with Coinbase to power ‘unique opportunities for fans’ is aimed squarely at the organisation’s most enthusiastic followers.

Despite initial cynicism, Satler argues that fan scepticism is going to be a good thing for the long-term success of Web3 projects. “We’re still in the early years, and there is a long way to go.

“It is a net positive that gamers are as opinionated and discerning. It forces developers to address criticism and take a closer look at a level of detail often overlooked. If we can create a blockchain gaming industry with all the concrete feedback, then that industry will be more robust.”

There is undoubtedly progress to be made, especially before NFTs can form a fiscally sustainable element of esports organisations’ monetisation strategy. The esports industry has a wide economic impact, but cash-strapped teams with vast shareholder networks and expensive player salaries are particularly financially vulnerable to the oncoming global recession.

The Story Mob’s whitepaper gives a hint to what the future of NFT projects will be: providing extra revenue to organisations, and engaging fans in new ways. However, as its paper explains, players need to be informed about the new concept of Web3 games, and experience benefits for themselves before they fully accept a future for esports with NFT experiences at its core.