NFT Sports Collectibles: Characteristics and Factors of Consumer Value

Introduction

The internet of things (IoT) has been revolutionary since the 2000s for companies and consumers, as it connects physical objects with each other through information and communication technology (ICT) systems (Balbi & Magaudda, 2018). The introduction of blockchain technology in the 2010s added new characteristics for digital items to the IoT, which allow the transfer of authenticated economic value through digital tokens (Zaucha & Agur, 2022). These tokens can now certify authenticity and represent ownership of digital and physical assets or asset types (Li & Chen, 2022). This was made possible by the internet’s progression from a platform economy (i.e., Web 2.0) to a token economy (i.e., Web 3.0), hence, triggering the internet of value (IoV) (Treiblmaier, 2021).

Various types of assets can be digitized and exemplified as digital items of value on the IoV, and they can be securely traded without an intermediary because of blockchain technology (Truong et al., 2018). This also applies to non-fungible tokens, also known as NFTs. Li and Chen (2022) define an NFT as “a blockchain-based digital record representing a non-interchangeable digital or physical asset” that “has a unique identity with distinct qualities” and is “well-suited for representing unique digital identities and properties” (p. 4).

Sports organizations such as the National Basketball Association (NBA), National Football League (NFL), or Angel City FC offer specific NFTs that hold the above-mentioned unique digital properties. Their NFTs capture the value of sports moments in a digital item or represent other digital sports memorabilia. Such NFT sports collectibles can be defined as authenticated non-fungible digital items related to a sport or sports brand, e.g., sports moments and memories, digital sports trading cards, wearable sports NFTs, etc., created on the blockchain that unlock access to tangible or intangible items or experiences (Osivand, 2021; Baker et al., 2022). New technologies have been crucial for sports collectibles, especially trading cards, as they evolved from being a marketing gimmick to become a serious investment for fans (Spencer et al., 2003). The internet has enabled collectors to connect with like-minded others to discuss, buy, sell, and trade collectibles more efficiently and effectively across the world, while offering a more stimulating collector experience (cf. Balbi & Magaudda, 2018). Particularly, the advent of blockchain technology and NFTs has introduced new promotional and financial avenues for sports organizations and brands to create additional value for collectors and monetize it accordingly (Baker et al., 2022). Popular platforms through which such collectable NFTs can be purchased and sold include NBA Top Shot (see nbatopshot.com), Sorare (see sorare.com), and OpenSea (see opensea.io). The global market size for NFT sports collectibles reached USD 1.4 billion in 2021 (Market Decipher, 2021) and is estimated at USD 2 billion for 2022, with great potential for continued growth (Deloitte, 2021; PR Newswire, 2022).

This indicates a viable financial and promotional opportunity around NFT sports collectibles for sports brands and NFT creators. Yet, because the underlying technology and the offered services around digital collectibles represent a new phenomenon (see Dash, 2012), respective use cases, best practices, and empirical research are rather scarce. This means that, currently, marketing professionals have to conceptualize their strategies based upon a limited body of knowledge regarding the communication and marketing of NFTs. It becomes therefore necessary to examine collectors’ expectations on NFT characteristics and their perceived consumer value, which may influence the purchase intention for such NFT sports collectibles (Baker et al., 2022).