Sports & Gaming Trends to Watch in 2023
With 2022 in the rearview mirror and 2023 off to the races – with resolutions hopefully still in place(!) – we watch with anticipation as several exciting trends continue to unfold in gaming, the fan experience and the role of women in sports. We expect these trends to have a pervasive impact across our core investment themes of sports & gaming, media & fan engagement, and human performance in 2023 and for years to come.
The Intersection of Gamification and Legalized Betting
2023 will see the continued gamification of society, no doubt being helped by the rise of legalized sports betting (now open for business in 32 states and the District of Columbia) as virtually every human experience becomes a wager opportunity. In the four years since legalized gambling was approved, Americans have bet more than $125B on sports. As new states come online with legalized betting – including our home state of Massachusetts later this month – we only expect this figure to grow.
Fans are now able to engage with their teams more deeply -- right at their fingertips -- while simultaneously connecting with friends and family around the sports, gaming and life experiences they love. In a survey conducted this past summer by the Pew Research Center, one in five adults (19%) said they had bet money on sports in some way in the past 12 months, with 15% saying they’ve bet with family or friends in a private betting pool, fantasy league or casual bet.
It’s a Game, Not a Job
With the global Web3 blockchain market expected to reach $33.5BN by 2030 we are closely watching as new frontiers are forged with competitive games that have blended principles from Web2 and Web3. These offerings provide a consumer experience rich with new creative expression, immersive play, social interaction, and access to newly found micro markets and gaming economies.
In 2023, we expect publishers to focus on finding the balance in embracing the benefits afforded by blockchain technology in terms of enabling players to earn real currency and tokenized rewards while ensuring the game remains fun and meets the current expectations of a highly engaging and interactive entertainment experience.
In our view, “fun first” gaming that enables individual creative expression and connectivity across a wider demographic, challenges our minds, harnesses our energy, and fuels high quality social interaction will prevail. The benefits of ownership and economic rewards will accrue to those games, players, and investors who do that best.
Fans Get Even More Social
Fan engagement, but more specifically the personalization of the fan experience, was a trend that saw broad adoption in 2022. We believe we will continue to see this for many years to come.
Sports teams have become hyper-focused on how to better identify and monetize super fans. We believe reimagined ticketing platforms and applications will offer a unique hub for teams to improve their direct-to-fan experiences. As we expand our thinking from tickets as a digital confirmation of an individual’s local entrance fee, to tickets as the building blocks of an expansive, potentially global community between brands and their respective fan base, we see commercial extensions for this technology and the data it generates far beyond any singular event.
Our portfolio company FEVO is revolutionizing the ticket purchase process for live events with a technology rooted in social commerce that makes it simple for friends to make purchases together for seats, related merchandise, and experiences such as parking spaces, tailgates, jerseys, memorabilia, and more.
As we come out of the pandemic, there continues to be pent up demand for ticketed events from sports to concerts to musicals and we believe that, coupled with ease of use will help drive the potential of services that help friends gather and rebuild the community we have been missing.
Women are in the Driver's Seat in Sports & Gaming
Video game creators know there are segments of the market being overlooked by the industry. One such segment is women and girls. According to Statista, in 2022, women accounted for 48% of gamers in the U.S, up from 45% the previous year.
At nearly 50% of the gaming population, the importance of young girls and women to the continued growth of gaming cannot be underestimated. We expect more creators to focus on this segment in the years to come as women and girls are a captive audience with very real spending power now and well into the future.
Women's sports have been gaining significant traction as well – from the rise in popularity of women’s professional soccer and basketball to the growing interest in female athletes and teams at the NCAA level. As recently reported by ABC News, from the July 2021 inception of Name, Image and Likeness (NIL) rules through November 2022, women’s sports occupied six of the top 10 highest-earning sports by NIL compensation, according to the NIL technology and marketing company Opendorse. This also represents a major growth opportunity for leagues, teams, media companies, brands and the athletes themselves.
We expect to see a continued increase in sponsorships, event attendance and compensation across sports as even more female athletes become household names.
Generative Artificial Intelligence Goes Mainstream
It’s hard to ignore the potential of generative artificial intelligence (AI) based on the rapid development in recent months and years. We mentioned sports’ focus on personalized fan engagement earlier, however delivering truly personalized consumer experiences to thousands or millions of individuals is challenging at scale.
Generative AI, where sports media and gaming content can be tailored to the exact interests of the individual, holds great promise for both optimizing and democratizing the future of content creation, with expansive potential within the creative arts, graphics, and storylines. Take the AI research lab OpenAI, which The Wall Street Journal recently reported is considering a tender offer that would value it at around $29B, making it one of the most valuable U.S. start-ups.
We believe the proliferation of generative AI will materially impact both topline fan engagement and the bottom line efficiency for the media, smaller studios and creators investing time and resources to bring an array of different content to market.
We would also like to hear your thoughts on the trends you believe will gain the most traction in 2023. Reach out to us at firstname.lastname@example.org or find us on Twitter!