Welcome to Edition #4 of The SEG3 Report!

Despite only being 9 days into April, it has been relentless with exciting developments across sports, entertainment, gaming & emerging technology, so there was certainly no shortage for today’s edition.

Here’s what you need to know:

• The BBC to bring some of their most iconic IP to Roblox

• Racing League & Zilliqa unveil ‘Skill2Earn’ Loyalty Program

• BITKRAFT launch $275 million fund

Let’s dive in…

The BBC to bring some of their most iconic IP to Roblox

The BBC will be launching “BBC Wonder Chase”, which will bring some of their most beloved programs & personalities like Match of the Day, Doctor Who, and EastEnders to Roblox, as well as across PC, mobile, PlayStation, and Xbox.

Anything that helps a younger audience discover the joys of Louis Theroux documentaries is a green tick in my opinion!

Why is this important?

For the avid SEG3 Report reader amongst you, we talked about how Roblox is a content business in Edition 2. There aren’t many (if any) that have the content production expertise & catalogue that linear broadcasters do, so this is really exciting for a number of reasons.

1. Introducing IP to New Audiences

Starting by stating the obvious, the BBC has an array of IP that fits incredibly well with the audience of Roblox through its CBeebies brand. One of the things I find most interesting about the digital experiences that are built in UGC environments is that they very rarely mimic the traditional broadcast or way that a brand tells their story across traditional channels. By being creative with the IP and leaning into more niche elements of the story around the IP/Brand, it can make the brand more relatable to a wider audience, hence broadening the funnel.

It sounds like the BBC will also be incorporating a ‘specially designed cinema’ into the experience to watch clips of shows. For me, the jury is very much out on whether content designed for a linear broadcast (or any other channel for that matter) can just be repurposed and stuck into an immersive environment with much success.

There are however some smart ways to bring traditional 2D content into a 3D immersive environment, which brings me onto point 2…

2. Building the Hype around an Original Series Launch

Many entertainment studios like Dreamworks, Lionsgate, Paramount, Nickelodeon, Warner Bros, Legendary Entertainment & many more have begun to integrate Roblox into their marketing for movie releases like Godzilla x Kong, Kung-Fu Panda, Avatar, Hunger Games, Saw & more.

These experiences, built using parts of the film trailers, are allowing users to immerse themselves into the story before it’s released, for a considerably longer time than the trailers. For Godzilla x Kong Obby, it’s reported the average time a user spent in the experience was close to 8 minutes vs 3 minutes for the 2D trailer. A 267% increase in engagement with your brand isn’t bad going…

Now I highly doubt the economics would work out for linear broadcasters to do this for the launch of each of its new shows, but it’s really cool to see traditional media businesses rethink their distribution & promotion strategies. It’s certainly a smart playbook to be taking pointers from!

But perhaps there are even smarter playbooks to also be following…

3. Creation of New IP & Business Models

I think this is perhaps the most interesting angle for traditional media brands. The time, investment, marketing etc necessary to produce new, successful IP through traditional routes has become eye-wateringly expensive. As per a conversation at SEG3 Los Angeles, there seems to be general reluctance from studios to invest in anything that doesn’t already have a history / audience built around it - hence sequel after sequel rather than new stories. I mean, how many Fast & Furious movies can there be?

Can Roblox and other interactive platforms be the saviour of creativity and allow entertainment brands to incubate & market new IP in a more cost effective manner?

I think so.

Many toy brands (for example Jazwares/Spin Master etc) are already doing this. Not only are they utilising the platform to grow the audience for their legacy brands, they’re trialling new brands with the audience, getting feedback in real-time on the UGC items & experiences that are resonating the most with the audience, and then doubling down and bringing those brands from the digital to the physical. 

This isn’t just a small marketing shift - it can be a seismic change to the business model & way they’re going to be producing toys.

And legacy entertainment/media can be like these toy companies, but on steroids. 

With the expertise they have internally for franchise development, storytelling & marketing, this shouldn’t be just a new way to market shows or personalities, it could well change the face of IP development.

And don’t just take my word for it, you only have to look at AdoptMe, Roblox’s most successful game, to see that viral brands can be built from scratch through the platform.

Racing League & Zilliqa unveil ‘Skill2Earn’ Loyalty Program

Racing League is a team-led league that is trying to ‘reimagine horse racing’, and has partnered up with Zilliqa, a layer 1 blockchain, to launch a loyalty program called ‘The Winners Circle’, which will offer members the opportunity to unlock access to exclusive rewards & opportunities through holding its fan token HRSE.

Why should you care?

The phrase ‘2Earn’ may scare a few that have some scars from the unsustainable Play2Earn games of a few years back. 

But despite the recent antics with Starbucks, loyalty & membership in sports & entertainment is no fad.

I don’t think it dramatic to say mostly ALL value built in the sports industry is built from the watertight relationship with the fanbase. It’s a deep, emotional connection that is the envy of any brand marketer.

Yet, rights holders have not ever fully leveraged this relationship directly themselves, instead opting for a model of ‘outsourcing’ that value through sponsorships, media rights etc. This has of course been wildly successful for the last 30-40 years, but as we move to more of a D2C environment, this business model will inevitably need to evolve to sustain the industry.

The Racing League, being a relatively new entity, evidently does not have the luxury (or tie, depending on your perception) of the revenues from the legacy business model that other sports organisations do. 

This means they have to be innovative in their approach and can build a more D2C model from the get-go which enables them to have more of a 1:1 relationship with their fanbase.

This is obviously an attractive proposition for a blockchain business that is looking to build out use-cases for the technology and bring long-time users to their ecosystem.

However, the crux of every loyalty program is in the value exchange - what am I the fan getting for my ongoing engagement & support, and does it have the value that I think it does?

From a quick flick through the release, there does seem to be a lot on offer for fans, from racehorse ownership syndicate shares to even a fantasy prediction game to win the HRSE token, so I’m intrigued to see what the uptake is like.

Here’s to hoping the fans of The Racing League give the loyalty program a yay rather than a neigh. (Sorry, couldn’t resist…)

Want to learn how to build a loyalty program fit for enterprise?

Join us at SEG3 London on June 27-28 to learn from & build partnerships alongside the global leaders from across sports, entertainment, gaming & technology.

BITKRAFT launch $275 million fund

One of the most prolific investors in the web3 & gaming space, BITKRAFT, is back, this time with a fund focused on investing in the next generation of studios, developers and games.

Why it matters?

The gaming industry has had a rough year, with a number of the large publishers & developers going through large scale layoffs amidst market conditions & pressure on the business model.

BITKRAFT knows that this means that some great folks are back on the market and looking for their next gig, or thinking about setting up shop themselves. 

Align this with the fact that some incredible GenAI tools are now on the market to help speed up game asset creation, develop player-facing NPCs & much more, and you can see why BITKRAFT wants to have capital to deploy to back these smaller indie developers/studios that now no longer require huge teams to deliver high-quality games.

This democratisation of game development will be interesting for a couple of reasons:

1. Clearly building AAA games is becoming more & more costly, and only a small few can afford to play in that space, which limits creativity and back to my point earlier on, limits the titles & IP that the publishers are willing to take a risk investing on.

2. Smaller developers don’t have the overheads of big publishers, so can afford to be more risky (around development but also business model), so it’s likely we’ll see innovation in both gameplay & business model coming through because of this.

3. This will inevitably lead to traction for some of these developers/studios, which could lead to acquisitions from the incumbents to secure their position.

And that’s what you’d assume BITKRAFT and a number of VC’s like a16z (who just launched Speedrun II) are banking on with these early stage funds & accelerators. And with their track records, I wouldn’t be backing against them being right on the money.

So all in all, a VERY good time to be at the intersection of web3, AI & games.

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