- Players of fantasy soccer game Sorare will be able to purchase and use official Premier League-licensed NFTs under an exclusive multi-year agreement.
- Values of NFTs have plummeted amid a downturn in crypto prices, exacerbated in recent months by the bankruptcy of major exchange FTX.
- Sorare has seen a shift in usage with players more inclined to use its “free-to-play” mode where they don’t have to compete with paid-for cards, according to CEO Nicolas Julia.
Sorare, the $4.3 billion fantasy soccer game, has signed a multi-year deal with the Premier League that will see the world’s top soccer league license official player cards.
Players of the game will be able to purchase and use official Premier League-licensed NFTs under the exclusive multi-year agreement.
Paris-based startup Sorare, which has 3 million users worldwide, lets people compete in fantasy soccer games of five a side. The chances of success are based on the real-time performance of players on the pitch.
Sorare said it’s also launching two new features in the game. These include the ability to compete with league-specific player cards and a “financial fair play” feature that prevents users from selecting all-star teams.
Sorare was first rumored to be in talks with the Premier League — the top tier of England’s men’s soccer leagues — about a licensing agreement in Oct. 2022. Sorare CEO Nicolas Julia said things took longer to wrap up than anticipated as the Premier League had an existing NFT licensing deal with another firm.
Sky News reported earlier that the deal was worth £30 million. Julia declined to share specifics on the financial terms and length of the deal.
The news comes despite a sharp slump in NFT trading activity.
Values of NFTs — or non-fungible tokens — have plummeted amid a downturn in crypto prices known as the “crypto winter,” exacerbated in recent months by the bankruptcy of major exchange FTX.
According to data site CryptoSlam, the average selling price of an NFT in Dec. 2022 was $143.22, down 63% from $383.73 in Dec. 2021.
Trading volumes are also down significantly. Overall NFT sales plunged 78% in December to $678.2 million from $3.1 billion a year ago.
Julia said Sorare has “trended very differently from the rest of the space.” Total exchanges of cards on the platform amounted to $500 million last year, almost doubling from $270 million in 2021.
Still, the company has noticed a shift in usage with players more inclined to use its “free-to-play” mode where they don’t have to compete with paid-for cards.
Some 87% of Sorare players “don’t even spend money on the platform,” Julia said.
That’s raised an obvious question about the sustainability of Sorare’s model: how does it make money when most of its users aren’t transacting?
For his part, Julia said the big-spending power users were enough to anchor income generation. Sorare takes an unspecified cut of all transactions via its service.
It’s worth noting Sorare is the third-biggest NFT collection worldwide, according to CryptoSlam data. The firm processes roughly $1 million of transactions in a 24-hour period, CryptoSlam’s figures show.
The Premier League’s partnership with Sorare adds to a slew of deals between sports leagues and crypto platforms.
Sorare itself has previously announced deals with Major League Baseball and the National Basketball Association.
Some agreements, like Crypto.com’s deal for the naming rights to the Staples Center arena in Los Angeles and FTX’s now-defunct sponsorship of the Miami-Dade Arena, have soured amid the plunge in crypto prices.
Julia said Sorare was sheltered from the fallout of the crash on crypto-focused sports advertising as his firm focuses on licensing of intellectual property rather than sponsorships.
The French startup was last valued by investors at $4.3 billion in September 2021. Sorare is backed by top names including Japan’s SoftBank and venture capital firms Accel and Benchmark. It also counts sports stars Lionel Messi, Serena Williams and Kylian Mbappe as shareholders.
Sorare has not been without its controversies and has come under fire over accusations that it encourages gambling.
The U.K. Gambling Commission is investigating the firm “to establish whether Sorare.com requires an operating license or whether the services it provides do not constitute gambling,” according to an Oct. 8, 2021 notice.
Julia said he was unable to provide an update yet on the process of the U.K. inquiry.
In November, the startup committed to making some changes to its platform after action taken by the French National Gambling Authority. Those included strengthening the free-to-play elements of the game. The company is required to enforce these measures by Mar. 31.
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Source: Finance - cnbc.com
