Why sports brands outpace their competitors in the metaverse

Nike’s foray into the metaverse was a proof point for brands. For relatively small outlay – the creation of the Nikeland virtual world within Roblox as the primary expense – the brand received significant attention from audiences and press. The world took advantage of the Roblox platform to entice users in through its minigames, then made the ability to purchase in-game Nike items a core component of its appeal.

Over the course of its first five months, Nikeland received over 7m visitors. Notably, after that number was revealed there was a flurry of other announcements about consumer brand executions within various metaverse platforms, where beforehand there had mostly been entertainment brand partnerships.

On its Q3 earnings call, Nike’s chief executive and president Jack Donahoe explained how vital the sporting aspect of the execution was to driving players to Roblox: “During NBA All-Star Week, LeBron James visited Nikeland on Roblox to inspire its community towards physical movement in play,” he said. “On the Nikeland court, LeBron coached and engaged with players, and participants were rewarded for physical gameplay with the ability to unlock virtual products. We plan to continue driving energy there with virtual products like LeBron 19 styles special to Roblox.”

Nikeland was successful, then, because it allowed users to compete with one another in a virtual space, just as their heroes do in real life. It was the perfect storm of aspiration, gaming, and brand. Jenny Mitton, the director at M&C Saatchi Sport and Entertainment, calls it a great proof point. “Those audiences may have disengaged with Nike, but suddenly they’re turning up in their space in a way that’s different and engaging and relevant. I’ve seen some finance brands like JP Morgan show up in some of these games which slightly confuses me… but if you enhance their game like Nike did with Roblox, that’s demonstrating credibility and doing it in the right way.

She says that the danger for brands is buying into the hype around the metaverse as a new thing and ignoring the lessons they have learned around its precursors over the years: ”There are some rogue agencies and they’re just selling something that doesn’t exist, but metaverse activities do and we’re heading in that direction. We’ll get there one day. I think we just need to be honest and not be afraid to say ‘I’ve created an amazing social experience in gaming’ because gaming is fantastic and gaming is where gen Z are.”

Happily for sports brands, that gaming heritage gives them a significant advantage.

The lure of virtual competition

Some of gaming’s biggest franchises are – and have always been – licensed sports games and when we speak about ‘the metaverse’ we are often just talking about gaming. It is small wonder then that the most high-profile brand experiences in the metaverse to date would also have aligned themselves with sports brands.

Meta (née Facebook) is one of the dominant competitors for creating the future of the interoperable metaverse. To that end it is investing heavily in getting sports brands onside and creating content for its Horizon Worlds platform. Earlier this year it hosted the NBA Lane experience, which included many of the same elements as Nikeland, from the competitive aspects to the ability to share pictures of the experience on social media.

Ann Wool is president of Translation, which ran the campaign work for NBA Lane in the metaverse. She explains that the appeal for the NBA brand was to experiment with another aspect of web3 monetization: “What it did was democratize access and attracted audiences from all over the world. And so the accessibility becomes exponentially much larger.

“But the challenge is it still feels very like testing and learning. We took NBA Land and put it on metaverse... it was a great way for us to see how it works. The NBA is very active with NFTs so they’re very, very, very bullish on the metaverse and tech.”

As Wimbledon kicked off in earnest, the WimbleWorld experience within Roblox launched with the express intention of reaching a gaming audience. Roblox’s senior director of international comms James Kay says: “This year is the 100th year of Centre Court at Wimbledon. You’re talking about something that’s obviously had an enduring legacy of fans over the ages and through the generations. We’re looking ahead to the next generation of fans, and how we are going to keep them engaged beyond just watching the matches.”

Similarly, motorsport games have been a fixture of gaming for years and have proven to be fertile ground for brands’ experimentation in the metaverse. The big monetization opportunity in this area lies with sponsorships – from Dacia’s partnership with esports platform Rocket League to the recreation of some of Formula 1’s most iconic tracks on metaverse platforms, the drive to create sponsored opportunities early is clear.

Fun and financial benefits

Adam Britton, the managing director at TrunkBBI, explains why that partnership opportunity creates value for brand, platform, audience and agency alike. He says: “The big thing for me from an agency perspective and how agencies can almost gain from this is actually by working with brands. By creating content or creating assets through the brand and doing it on a profit share basis.

“To be able to create those assets and put them within the metaverse for people to purchase... the agency can make a profit share [there]. That is where I see [the industry] going in the next two to three years.”

The ability to sell in-game items has proven to be an integral part of the appeal for brands looking to launch within metaverse spaces. For sporting brands, which have apparel as a core part of their revenue strategy, that has provided an easy win in the form of selling virtual recreations of those goods. Moreover, since metaverse platforms have included the ability to create virtual clothing for players’ avatars since the start, the cost to produce those goods is relatively small.

For sports brands, then, the metaverse has provided an incredible opportunity that builds upon many of their real-world strengths. The recreation of real-world competitions in a virtual environment allowed sporting brands to experiment with e-commerce based on their existing product lines. Metaverse platforms’ gaming heritage means that sports brands were best placed to take advantage of these early stages of the metaverse.

Check out The Drum’s latest Deep Dive, The New Sports Marketing Playbook, and learn the tactics employed by the world’s biggest sports organizations and their star athletes to stay top of their game.