Welcome to Edition #8 of The SEG3 Report.

This past week saw a lot of news around things that move fast; a DAO partnering with Alpine F1 team, Land Rover teaming up with Driving Empire & Sonic the Hedgehog’s right hand, Knuckles, racking up over 4 million hours of viewing on the new TV Series.

We’ll try to be just as fast distilling the key takeaways.

On that note, here’s what you need to know this week:

• ApeCoin & Alpine F1 announce collaboration & web3 integrations

• SEGA & Paramount+’s Knuckles watched over 4 million hours in opening weeks

• Voldex & Land Rover team up in Driving Empire

Let’s get into it…

ApeCoin & Alpine F1 announce collaboration & web3 integrations

APE Foundation have entered into a multi-year partnership with BWT Alpine F1 Team. The partnership aims to launch ApeCoin into Alpine’s Formula 1 ecosystem, uniting token holders worldwide through race events, web3 integrations, and programming created with Alpine and ApeCoin token holders.

Why does it matter?

ApeCoin has grown out from one of the most premium web3 native brands, Bored Ape Yacht Club, and is aligning with a team in arguably the most premium sport in the world. Definitely an interesting combo!

There’s a few things that are worth noting with the partnership:

1. The mechanics behind how the partnership was agreed

ApeCoin, a token, is governed by the ApeCoin DAO, consisting of 146,000 members, who voted to decide if they should move forwards with the partnership with Alpine.

To try and simplify that, the DAO has a treasury (pot of cash) and the APE Foundation reviews proposals of how to use that cash to grow the ApeCoin ecosystem. The foundation cannot however allocate any of that cash without the buy-in of the community (DAO), who need to vote in favour of a proposal for it to happen. More on the structure of the DAO here.

The majority clearly decided yes, so here we are.

Now, DAO’s may not ever get their day in the sun from a professional sports governance perspective. Regulators would likely never allow it, and having thousands of people’s input on every decision made probably isn’t the most efficient way to manage a sport or business.

But forgetting a top-down approach, they remain an incredibly interesting vehicle to channel a communities energy & funding towards a shared objective.

You only need to take a look at what KrauseHouse, RugbyDAO, LinksDAO (many of whom are previous speakers at both SEG3 London & LA 😉) are all trying to achieve, and how they’ve managed to activate global audiences using DAO’s or DAO-like structures.

With sports IP having such huge, global, engaged audiences who want to have a say in a number of things that happen at their favourite clubs, you’d suggest there’s a role for fan-led DAO’s adjacent to their favoured sports. After all, there’s strength in numbers!

2. ‘Web3 Integrations’

The release focuses on ‘web3 integrations’, which is arguably the most interesting part of it. Fairly broad, leaves a lot to the imagination, so am intrigued by what rights they will have negotiated within the partnership. 

A focus on Digital ID? Merch? Token-gated content/experiences? Rights for the Apecoin ecosystem?

As much as VIP hospitality experiences or branding rights to raise awareness are an interesting way to add value to Apecoin and its holders (and add an element of stickiness to holding the token), the real long-term value lies in finding activations that cannot be done in web2.

Helping Alpine deliver next-generation digital products & experiences that unlock new business models, ways to engage with their fans/customers and tell stories will be the objective, so we’ll be watching to seeing what they have lined up.

3. Why Sponsor?

The narrative around sponsorship has irreversibly shifted in web3. In general however, most brands are still incredibly interested in sports & wider culture (as it unlocks most of the globe!), but there is much more of an emphasis on putting marketing dollars towards building interesting use cases than just growing awareness.

The release suggests it will have a ‘collaborative approach’, so I imagine this is where a large chunk of the allocated funds will also be going towards.

So, pitching a web3 brand any time soon? Prioritise how you will smartly leverage their infrastructure/application/community to make a difference, and you’ll be in with much more of a shot of a second conversation!

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SEGA & Paramount+’s Knuckles watched over 4 million hours in opening weeks

The “Knuckles” miniseries on Paramount+ has become the most-watched original series on the platform over its premiere weekend.

Per the streaming service, the “Sonic the Hedgehog'' spinoff series was viewed for more than 4 million hours in its first few days of availability after dropping all six episodes on April 26. That also makes it the most-watched kids & family title ever on Paramount+.

Why you should care

Transmedia storytelling seems to be working. 

Sonic, and therefore Knuckles, have always been game-first IP. By bringing their story and lore to different platforms (whether that be film or TV series), it’s introducing the IP to new generations, as well as bringing new narratives to older generations that can now re-engage with the IP, growing the franchise and unlocking new revenue opportunities for both SEGA & Paramount.

It also breathes new life into older content, with viewership for other “Sonic the Hedgehog'' titles on Paramount+ also seeing a substantial lift, up 278% over their daily average.

I’d love to know what the uplift in search for Sonic the Hedgehog games has been since the release. As we chatted about in Edition 6 of The SEG3 Report, being able to capture even a small portion of the people that have watched the series and drive them towards engaging with SEGA and the Sonic (and associated) brands and games can help to drive significant revenues.

Just look at what the recent Amazon Prime Series did to sales of Fallout games - they shot to number 1, with the 2015 Fallout 4 games sales rising over 7,500% week on week. 

And with Sonic the Hedgehog 3 coming out in December this year, it’s clear SEGA & Paramount’s audience building flywheel is in full motion.

IP can be timeless, and building a transmedia strategy to engage new audiences seems like a sure fire way to ensure the long-term sustainability of it.

UGC Gaming & Transmedia Storytelling sound like your cup of tea?

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Voldex & Land Rover team up in Driving Empire

Voldex, creators of Driving Empire, team up with Land Rover to bring some of the brands most iconic models to their virtual world.

Why is this important?

Voldex have focused on building their own games/experiences (which spans from Ultimate Football and Driving Empire to Base Battles & more).

With Driving Empire becoming hugely successful (passing over 1 billion visits in late 2023), they are now welcoming some of the world’s largest car brands like Jaguar, Land Rover, Pagani and others) into the experience. Kudos!

Their success shows there’s more than one way to skin a cat and be successful in UGC environments:

1. Creating your own games/experiences, building the audience & then partnering with brands to bring them into your own ecosystem
   

2. Partner with brands from the get-go to build them bespoke games/experiences

The first approach (Voldex’s approach), is definitely riskier as it requires you to solely take on the cost of initial development, marketing & ongoing liveOps. You do however get to keep the spoils for yourself if you create a successful game, and are also able to offer a low-lift route into UGC gaming for brands looking to enter the space.

The second approach, and the path more trodden by most studios, is to work directly with brands to build a bespoke environment for them to engage with their audience, and attract a new one.

Both have their pros and cons, but with Roblox/UEFN natives understanding what captures (& retains) attention on these platforms, and creator tools being at their fingertips, I’d expect to see many more games popping up that retrospectively look for brand partners after hitting an inflection point.

Working on anything cool, or have a press release you would like us to cover? Send it in for the chance for it to be covered in next week’s edition!