Welcome back to edition #24 of the report - the quarter century is nearly up!

But before we get to that, this week has seen Sony launch their own blockchain, Nike build a partnership with LEGO & GEEIQ release their State of Virtual Brand Experiences report!

Contents: Edition #24

• Sony launches its own blockchain, Soneium

• Nike & LEGO partner up to focus on creative play

• GEEIQ release State of Virtual Brand Experiences Report

Let’s dive in…

Sony launches its own blockchain, Soneium

Sony, known for creating the iconic Walkman, as well as Playstation, has launched its own layer-2 blockchain called Soneium.

Why you should care

Sony has found a lot of success in the past through hardware - the Walkman, the Playstation etc, so perhaps we shouldn’t be surprised that they are keen to get involved in the infrastructure game. They do own a crypto exchange after all, as we mentioned in edition #16.

The infrastructure approach is certainly not the most well trodden route for enterprise brands entering web3 (another notable example I recall was game publisher Com2uS, with their blockchain XPLA). Just because it isn’t the norm doesn’t necessarily mean its a bad option however.

But there is a reason that very few opt for this route. Infrastructure is hard. Not necessarily to spin up (you can now get an L2, like Soneium, up and running in a matter of minutes using the likes of Conduit), but hard to manage.

It requires ongoing development, ongoing maintenance and if you’re trying to bring external projects to the chain (which from the release it seems like Soneium will be trying to do from the get-go), ongoing marketing.

All of which tends to cost a pretty penny and in general, most brands just do not have the budgets, internal expertise or frankly time to be able to deliver this by themselves.

Sony, being a tech brand, may prove to be the outlier and have those expertise in-house to be able to make it work.

And if they do, it certainly puts a lot of control back into their hands to be able to build the network to their exact requirements, which is not something they would likely get the chance to do working on a partner's chain.

But the trickiness with infrastructure is that it is just that, infrastructure. And there’s a HELL of a lot of it at the moment.

If Sony (and partners) are able to drive activity to the chain from the web3 community & enterprise brands, then this could quickly become a sizeable new revenue stream for them (from transaction fees collected etc), but with the competition for attention high, you’d imagine it will be an uphill battle to build an active ecosystem quickly and if they cannot build the ecosystem, there’s a good chance the blockchain could become a cost-centre rather than revenue driver.

In the release, CEO of Sony’s partner Startale Labs Sota Watanabe laid out their 3 year plan of how they’ll avoid that scenario:

Although this is a necessary first step, it will undoubtedly be competitive and given the current market sentiment, will inevitably need to focus on a token drop to incentivise web3 natives to engage with the network. And we all know that can be fraught with risk if people’s only incentive to engage is financial.

This part could definitely be their differentiator however. Sony Music/Pictures have reach to some of the most recognisable IP & talent on the globe. ‘Integrating web3 into the product’ is fairly broad, but given Sony’s assets, there’s a lot of scope for them to rethink how fans are interacting with their talent & media, and utilise web3 to design improved products & experiences.

This will again be challenging given the competition, but certainly if they do bring Sony Music/Pictures to the chain, this will provide more of an incentive for web3 natives & enterprise to join the ecosystem.

Overall, it’s refreshing to see Sony trying something new, and if they can drive the network effects necessary to make it a success, they’ll not only have diversified their business significantly, but have control of their future in the space.

Nike & LEGO partner up to focus on creative play

Nike and LEGO have announced a new partnership to create innovative products that blend sport and play.

Why you should care

Two of the most recognisable brands in the globe partnering to bring ‘creativity, fun, sport and imagination back into play’ was hardly not going to feature in this week's report was it?!

The release hints at ‘a series of co-branded products, content and experiences’ which’ll be released early next year.

Cal Dowers, VP, Global Kids for Nike said:

And there’s certainly a need from Nike to keep sport front of mind for Gen A - according to McCrindle, Gen A are spending more time in front of screens than ever before, with the average child between 8 and 12 years old spending an average of 4 hours and 44 minutes in front of screens every day.

And that will clearly be a concerning statistic for Nike given 55-60% of all of Nike’s sales are attributed to sports specific products vs 40-45% from leisurewear, with digital fashion not quite ready to make up a shortfall that significant just yet!

So this requires a rethink about how to replicate social and sporting experiences in digital environments and how to bring those to life in the physical world in a way that will engage with Gen A to get them active, which is where LEGO & Nike can complement each other well.

Although there’s currently very little detail about what the co-branded products & experiences will be, given both LEGO & Nike have been active in Fortnite, there’s a lot of speculation that the platform may play a central part in their plans.

And it would make sense given the partnership focuses on creativity, with UGC gaming platforms having the tools that can enable Gen A to use their imagination to create new sports experiences and products using Nike & LEGO IP.

Nike & LEGO have already teased potential crossovers in products in their launch video, which you can see below:

@nike

Nike 🤝 @LEGO. See you in 2025. #Nike #LEGO

It’s a smart partnership and a great initiative - with both brands having legacy in play and sport, they are well positioned to help drive more activity amongst Gen A - but with that generations technology usage outweighing any previous generations, it’ll be intriguing to see how Nike & LEGO leverage emerging tech and platforms to get them re-engaged with physical sport & activity.

There’s been a 58% increase in virtual brand experiences in H1 of 2024 vs 2023

GEEIQ are back with part III of their ‘State of Virtual Brand Experiences’ report, which examines the evolving landscape of virtual brand experiences.

Why you should care

There’s some must-read statistics in the report that give an insight into the direction of travel for brands entering virtual environments, such as:

• A 58% increase in brand experiences vs H1 2023
  - More and more brands continue to find value in meeting Gen Z / A in virtual worlds
  

• A 194% growth in integrations vs H1 2023
  - The way they’re doing it seems to be changing however, with the tides turning towards smart collaborations with successful experiences rather than owned environments
  

• Media & Entertainment (+121% increase) & Sports (+77% increase) were 2 of the top 5 most active industries when it came to new activations
  - Whether movie or album launches or major sporting events, brands that intersect culture are proving to be some of the most active in leveraging virtual worlds & gaming to grow their audiences and successes of campaigns.

And a whole host more well worth checking out if you’re in the space or looking for inspiration into the most successful strategies being deployed by enterprise brands in the space 👇

In other news this week…

A quick round-up of other stories you should be across:

• PGA Tour launch web3 mobile game, PGA Tour Rise

• Wrangler & Hot Wheels team up for ‘Horsepower’

• ATP & WTA launch video game, Tiebreak

• NASCAR introduces Daytona track into Fortnite’s Rocket Racing

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!