Welcome welcome!

Edition #49 reporting for duty, and today we’ll be diving into why putting the entertainment into sports has never been more important, with call outs for the PGA of America launching a multi-sport feature film & London Marathon investing into Friday Night Lights, all rounded off with a look at Walmart’s latest attempt to blend commerce & games using interactive storytelling.

Let’s get into it shall we…

Contents: Edition #49

• PGA of America & Dentsu to launch Animated Sports IP Franchise

• London Marathon Events invest into Friday Night Lights

• Walmart releases ‘Walmart Unlimited’

PGA of America & Dentsu to launch Animated Sports IP Franchise

Dentsu has collaborated with the PGA of America and producer John Cohen, best known for producing The Garfield Movie, Despicable Me & The Angry Birds Movie, to develop a new animated sports intellectual property (IP) franchise.

The franchise will focus on the sport of golf as a hero, in a multi-sport story based in the fictional world of “SportsCity”, aiming to use entertainment to grow the game of golf and put the sport at the centre of popular culture.

Why You Should Care

TL;DR: Storytelling is more important than ever in today’s noisy landscape. Building new IP allows you to tell stories that wouldn’t be the right fit through traditional sports channels, giving you more flexibility to build narratives that can cater to new audiences vs existing ones. If done well, this could open up a number of new revenue opportunities for the PGA of America (through licensing, merch, brand partnerships etc), but it shouldn’t be underestimated how hard it is to successfully build new IP - it will take a combination of time, resource and a small slice of luck for it to gain traction.

In full: The producer of the cult classic that is Garfield turning his hand to building an animated, multisport feature film alongside the PGA of America. You bet you have my attention.

According to the story’s creator, Scott Dmitrenko, the film “aims to expose the game of golf to the next generation of players and fans in a manner that is engaging, inclusive and fun”. 

And that is of the utmost importance for Golf, as EY’s Sport Engagement Index has seen the sport slip from an already low 15th to 18th for participation rates for 18-24 year olds.

So why are the PGA opting for an entertainment route? What are the challenges they are likely to face? Will there be gold at the end of the rainbow?

There are certainly a few things worth considering if you’re going to pursue this kind of strategy:

Entertainment and storytelling is now more important than ever to stand out

Without wanting to sound like a broken record, we have never lived in a more noisy world, and we all know that with the proliferation of AI, producing content has become easier than ever.

But whilst creating content is getting easier, creating connection has not.

That’s where strong storytelling becomes a differentiator.

Stories that entertain and evoke emotion are more likely to create connection. It’s the playbook that live sports has been so successful with since inception given its unscripted nature.

But the on-pitch product isn’t going to be everyone’s cup of tea. But that doesn’t mean a different, more entertainment driven approach can’t capture new fans. A report from FleishmanHilard found Gen Z are watching entertainment content more than twice as much as sport, with 48% viewing entertainment vs 23% viewing sports.

By building out a broad suite of content options, like the PGA of America are, they have more chance of their content being discovered and resonating with new audiences, which is vital because…

Youth Audiences are not following the linear route to sports fandom and participation

Generations that grew up in an era of concentrated attention (like Millennials) had a limited amount of programming to choose from in their formative years, so repeat viewing of sports content built their fandom, which they continued into adulthood.

This is no longer the case for today’s fandom journey.

Today’s content landscape is vast and varied, and now means youth audiences can discover and engage with new communities/IP in ways that were previously impossible.

This choice is fantastic for the consumer, as even niche interests will have a constant stream of content being created, but a complete nightmare for sports brands that now have the whole of mainstream and niche culture to compete against to attract new fans to their sports.

And that fragmentation of fandom really is staggeringly broad…

Three quarters of those surveyed not having the same fandom is a complete departure from the norm of a few years ago. We can even see this shift in the number of new sports entering the Top 20 list we showed earlier in this piece.

So for a sport like golf, and an organisation like the PGA of America, development of an animated IP broadens their storytelling capabilities, allows them to build new narratives that can introduce the game to new youth audiences in entertaining ways, and if done correctly, could unlock new commercial opportunities, BUT…

Building new IP is HARD

I appreciate this is an oxymoron, but building a new IP requires you to find a sort of ‘broad niche’.

The story and IP needs to appeal to the interests of your target audience, but it also needs to maintain uniqueness so that it is memorable and not overlapping with existing franchises.

It then also needs to be broad enough that it resonates with a large enough group so that it can drive meaningful engagement and revenue for the business.

Much, much easier said than done, and is why over previous years we have seen many entertainment studios take a more conservative approach to double down on investing in sequels of well known franchises vs building new IP (which we covered in more detail in Edition #44).

So how does the PGA of America recover the funds it will have needed to front to green light the production of this film?

Well, by going down the entertainment route, it unlocks some well known (and new) channels for a sports organisation to commercialise through, like:

- Brand Partnerships
Existing and new partners alike want opportunities to authentically engage with youth audiences around their passions. New IP will likely not be bogged down by existing deals which can be lengthy and inhibitive in the existing landscape. The flexibility to story tell with less red tape could be interesting for brands once the PGA of America establishes an audience.

- Distribution
It’ll be interesting to see what distribution strategy they go for. Big-screen release? YouTube? Netflix? All of the above?

Given the objective of the initiative is to get the game of golf in front of as many eyeballs as possible, you’d assume they’d want to put as little barriers as possible for audiences to discover the IP.

- Merchandising & Licensing
Frankly, this is a long-term play as they’ll need to establish the IP and the audience over many years, but for most franchises, this is undoubtedly their largest driver of revenue. To put it into perspective, Pokemon for example has reportedly generated $147 billion in lifetime revenue, with $103 billion of that being from merchandising.

Wrapping Up: Will entertainment releases be right for everyone? Maybe not. However, should sports organisations be building stories away from the live product to broaden the appeal of their brand and sport? Definitely.

Kudos to the PGA of America for taking the leap - we’re really intrigued to follow along to see how the storyline is crafted and how it delivers against the objective of bringing new fans into the sport of golf.

London Marathon Events invest into Friday Night Lights

London Marathon Events (LME) has invested in Friday Night Lights, an innovative event combining social running with music and celebration, described as the UK's healthiest night out. Founded in 2023, Friday Night Lights (FNL) has expanded to multiple UK cities, attracting thousands of participants aged 18 to 34.

Why you should care?

TL;DR: High-performance is no longer the main driver for a lot of Gen Z’s participation in and engagement with sport. By creating and investing in groups like FNL that focus more on the social and entertainment aspects of sports, brands like LME can authentically place themselves in the conversation around grassroots running whilst creating a pathway for these communities to learn about and eventually participate in their mass participation events.

In full: Running clubs are really having their day in the sun, with Strava coining ‘Run club the new nightclub’, with their research in December 2024 backing that up: 

• Group activities boomed: A 59% increase in running club participation globally in 2024
  

• Socialising was core to the experience: Large group activities increased by 13% and had 3x more downtime than solo activities, reflecting time being made for coffee or conversation mid-workout
  

• Fitness through friendship: 58% of survey respondents said they made new friends via fitness groups, while nearly 1 in 5 Gen Z went on a date with someone they met through exercise - and were 4x more likely to want to meet people through working out than at the bar 

So with the trends showing that participants of group exercise are also 20% more likely to remain loyal members, and that music can help reduce the rate of perceived effort by 12%, it is no surprise that London Marathon have invested into Friday Night Lights, with their subscription offering of weekly groups runs (and soon, festivals) that combine exercise with socialising and entertainment, FNL caters to those trends extremely well.

Why else is the investment interesting for the likes of the London Marathon, and what does it signal for other sports?

A new narrative

Most would associate the marathon with goal-setting, fundraising for charity and a once-in-a-lifetime experience. Friday Night Lights on the other hand focuses on the communal aspect of running, a healthy Friday evening experience and weekly events, all of which give LME more of a year-round touchpoint with potential applicants, as well as the opportunities for their commercial partners to have access to an engaged community of runners in London and across the country, which is likely their driver for partnering.

Gen Z’s habits & the power of communities

Habits are changing. Fitness is where a lot of Gen Z are socialising and spending their money, with 45% of Gen Z having reportedly never touched alcohol.

So with Gen Z 4x more likely to want to meet people through working out than at the bar, these behaviours are here to stay. This means there’s a tonne of growth opportunity for running communities like FNL that blend exercise with entertainment to become a real mainstay in Gen Z’s spending for social experiences.

Wrapping Up: Sometimes we can get hung up on the importance of high-performance being the driver for audiences to want to take up a sport. Being aspirational certainly can work, but it is worth remembering that sports true power lies in the communities of amateurs who engage with the sport solely for entertainment or social reasons. FNL have seen the shift in habits from Gen Z, and have focused their energy on building a brand and weekly base for that community - and with LME being the pinnacle event for amateur athletes, there is a clear pathway from FNL to LME participation, which makes this look to be a smart investment.

Walmart releases ‘Walmart Unlimited’

Walmart has launched "Walmart Unlimited," a gamified shopping experience that merges interactive storytelling with real-time shopping capabilities. Users navigate a video game-like environment featuring characters such as Brooklyn, Milo, Raya, and Jabari, allowing them to shop for Walmart products seamlessly within the game.

Why you should care

TL;DR: Gamifying online and IRL experiences to increase time-spent in retail stores is becoming the norm. We’ve already seen numerous brands merge physical and digital experiences by rewarding behaviours in one reality in the other. But creating an interactive story with shopping experience built into the fabric? This is new, and if it can help to increase purchases, expect more consumer-facing brands to test this approach.

In full: Walmart really are pioneering some incredible stuff when it comes to immersive commerce - with the likes of Walmart Discovered, which we covered in Edition #7.

Walmart Unlimited does however take this to the next level.

It’s an interactive story which overlays commerce directly into the game, enabling players to make purchases throughout their experience.

How does it work?

The whole story is gamified, allowing players to seamlessly shop featured products without ever leaving the platform—all powered by Walmart’s official Unity SDK within Spatial.

With two more additions to come in April & May, it’ll be interesting to see how successful this initiative is in driving purchases vs their trials with immersive commerce on Roblox vs their traditional 2D site or in-store.

If it can be proved out that combining storytelling and commerce into one experience can increase basket value and checkout success, we could very much be heading into a whole new world for retail, which would have significant impact on the strategies for all consumer-facing brands.

Wrapping Up: Retail giants have gone through a lot of disruption over the past 10 years or so, but they have been some of the most active in experimenting with gaming as a channel for them to drive commerce. As they reimagine the shopping experience from in-store to online, being able to leverage gaming to engage youth audiences, grow brand loyalty, educate them on products and drive them action (online or in-store) is going to become more of the norm over the coming months and years.

In other news this week…

• Crunchyroll partners with LA Lakers & Boston Red Sox for One Piece collaborations: read here.

• YouTube announced as Presenting Sponsor for PGA Tour’s Creator Classic: read here.

• Crypto . com announce exclusive digital collectibles with UEFA’s Champions League: read here.

• Adidas partner with Strava to reward AdiClub members with premium subscription: read here.

• Snoop Dogg partners with Web3 Music Platform, Tune FM: read here.

• BLACKPINK member, LISA, partners with 100 Thieves for immersive event around album launch: read here.

• FC Barcelona release short documentary on clubs digital art: watch here.

• Candy Crush collabs with Pat McGrath for themed collection: read here.

• Formula 1 and LEGO announce at-race experiences: read here.

• ESPN to launch new daily SportsCenter show: read here.

• Cowboy Bebop themed skins come to Fortnite: watch here.

• The Hunger Games is to hit the theatre stage in London: read here.

• Legendary Entertainment launch mobile game, Godzilla x Kong: Titan Chasers: read here.

• CM acquires blockchain ticketing platform, GUTS Tickets: read here.

• Implications of the EU AI Act on Game Developers: read here.

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!

That’s all for now folks - thanks again for reading the latest edition of The SEG3 Report and we’ll see you next Tuesday for more on the intersection of culture & emerging technology!