Hey folks - welcome to Edition #43 of The SEG3 Report!

Today’s newsletter dives into an always-on, AI powered tennis league launched by Tennis Australia, the Bundesliga becoming the first European sports league to launch into Roblox and the key takeaways from Matthew Ball’s ‘Gaming 2025’ Report.

ICYMI: SEG3 London is back, returning for Edition IV on 10 - 11 June, with First Release passes now available here!

As a thank you for putting up with my/our musings, we’re offering readers an additional 20% off your pass until the end of the month with the code: TS3R20

Right, let’s get into it!

Contents: Edition #43

• Tennis Australia launches AI-Driven Tennis League, Beyond Tennis

• Deutsche Fußball Liga announces presence in Roblox

• Matthew Ball’s ‘Gaming 2025’ Report

Tennis Australia launches AI-Driven Tennis League, Beyond Tennis

Tennis Australia has launched Beyond Tennis powered by Infosys, an innovative free gaming app that blends sport, artificial intelligence, social media, and storytelling. Designed to captivate Gen Z, gaming enthusiasts, and tennis fans alike, Beyond Tennis allows users to step into the role of a player's coach or agent, shaping the careers of AI-driven tennis players both on and off the court.

Beyond Tennis brings the digital generation closer to the sport by transforming traditional fan engagement into a futuristic experience. Using advanced AI engines, users can guide their players' training and strategy, while chatting with them in a life-like simulation, while watching their season play out in real-time on social media. The concept reimagines how fans connect with the sport while creating exciting new avenues for partnerships and competition.

Why You Should Care

TL;DR: The AO, as ever, are ahead of the game - animated broadcasts & AI-driven games are both steps in the right direction to diversify their revenue streams and broaden the reach/appeal of the sport & tournament. Building fandom early is crucial to capturing a lifetime of value.

In full: With the Australian Open in full swing (excuse the pun), there’s been a lot of talk about the on-court, but it’s a number of off-the-court innovations that have caught our eye and that of the industry - with both initiatives largely revolving around how the AO is growing the accessibility of the tournament and tennis as a whole to the next-generation of potential fans.

Firstly - an animated feed of games, which was distributed on Youtube at ‘near-live’ speeds, somewhat circumventing the exclusive rights that the AO’s global broadcast partners will have. Machar Reid, Director of Innovation at Tennis Australia, and SEG3 London alumni, shared a little bit more about the behind the scenes here.

Secondly, and what we’re going to cover today in slightly more depth - the launch of a 24/7, 365 day a year game, Beyond Tennis, which allows fans to step into the role of a player's coach or agent, shaping the careers of AI-driven tennis players both on and off the court. Being an agent of an agent if you will.

There have been many a ‘manager’ simulation game - Football Manager perhaps the most widely known - which put you in the shoes of running a club. The difference from those to the proposition from the AO can be seen in the:

1) Interactivity

Users can guide their players through training and strategy, while chatting with them in a life-like simulation, and watching their season play out in real-time on social media (each player even has their own Instagram account - check one out here).

It’s a recurring theme that todays audience want more. More access. More content. More opportunities to engage with their favourite sports, athletes and brands.

The AO’s hands are tied in a lot of those areas by pre-existing rights agreements with players, broadcasters and sponsors – they cannot just provide behind the scenes access to players at the drop of a hat – with this game, they can.

It remains to be seen whether the general population is welcoming to the idea of AI athletes having a presence across socials and whether their journeys can capture a Gen Z/A’s attention over a prolonged period of time (especially post-tournament), but what it certainly does provide the AO is the control around the narrative and flexibility to take the storyline in whichever direction they (or their commercial partners) would like to, which brings me onto…

2) Commercials

Long-term engagement aside, what can’t be argued is that this is now another asset that the AO team has at their disposal. But how will they make it work commercially?

Given they have opted against other monetisation routes (in-game purchases or paid apps), a lot of the slack to move this from an engagement play to a revenue driver will sit with how well they can package it up and present the in-game/app opportunities to existing or new sponsors.

And they’ve made a good start, with Infosys, the AO’s Digital Transformation Partner coming onboard as the title sponsor.

As the game evolves and hopefully proves out its value to the AO, fanbase & sponsors alike, there is obviously a lot of scope for the AO to expand its commercial offering through Team Naming Rights, Players Sponsorship, Tournament Naming Rights and Official Partner Rights etc - all feasible inventory that could be packaged up for partners.

In any case, what both the animated stream and the game signal are a wider change - this being that the traditional processes of discovery & onboarding people into sports has changed for Gen Z & A.

And given 80% of gamers agreeing that sports video games encourage them to read up more about the real sport, it has never been more crucial that sports are leveraging games to grow their reach and have multiple touch points for the next-generation to discover and build an affinity towards their sport in their formative years.

So for Tennis Australia & AO, they’ll be hoping that their focus on innovation & new tech can be the catalyst to grow their audience base, retain and attract sponsors, but also contribute to growing fandom for the sport of tennis globally.

After all - a rising tide lifts all ships!

Deutsche Fußball Liga announces presence in Roblox

The DFL (Deutsche Fußball Liga) has partnered with Build a Rocket and Karta to bring the Bundesliga to Roblox, marking the first European sports league to join the platform. The initiative includes obstacle courses, a free-kick simulator, and the interactive "Bundesliga Clubhouse," where users can collect exclusive items and explore league content. The experience has had over 1.3 million visits in the first four days since launch.

Why you should care?

TL;DR: The Bundesliga are a challenger league, with one of their key differentiators (in my eyes) being their propensity to innovate. Taking ESPN & Topps with them on their UGC journey is a great signal that traditional partners are interested in expanding their partnerships if it means they have more interactive opportunities to tell their stories to target audiences. The challenge? Retaining interest from players (after the UGC snipers leave) if there isn’t a sustained plan to keep players coming back.

In full: As we just talked about, introducing your brand to audiences early, or providing opportunities for your current fanbase to interact with your brand in different ways is vital to maintain mindshare in such a busy, attention driven economy.

For the Bundesliga, they’re part of one of the most competitive landscapes on the globe: European Football. Couple that with the fact that many fans have loyalty to their teams as a pose to the league, building a connection can be difficult.

So what is their role, why is a presence like the Bundesliga Clubhouse in Roblox interesting to them & their commercial partners, and where might they encounter some bumps in the road?

Role & Partner Involvement

Taking a very rudimentary view, the role of any league like the Bundesliga is essentially as a collective promoter - they’re responsible for creating an environment for high-level competition, amplifying their clubs messaging and being the missionaries that spread the good word of German football globally.

So in some regard, the Bundesliga Clubhouse makes sense as a hub and discovery tool for non-German, non-football fans to have their first interactions with the league & get the chance to learn the stories of each of the clubs. It’s not too dissimilar to the approach FIFA have taken with ‘FIFA World’ (which we covered in Edition #12), where they had involvement from the DFB (German FA) & the US Soccer Federation - the rationale being that the national federations/association could piggyback on their presence and have a joint up, centralised, more economic approach to activating on the platform.

And in doing so, they could all provide more opportunities for their local and global partners to activate around the tournament or season. This is also the case for the Bundesliga - with ESPN & Topps both being present in the lobby. Avid readers (if that’s a thing!) will know that ESPN themselves already have multiple experiences (which we covered in Edition #7 & Edition #13) with sports partners like the NHL & NFL. It will be interesting to see if there is a plan to cross-promote, for example if they will link to their NHL/NFL experiences from Bundesliga, and vice versa, to help drive acquisition & engagement across their assets.

It is of course long-term engagement that is hard to cultivate…

Potential Bumps in the Road

Bundesliga, like all non-native, non-gaming brands entering the platform, will face the same challenge of acquiring new players & retaining them once the initial furore subsides.

I wrote in last week's edition about the pros and cons of each type of presence, which I think is relevant and will likely apply to the journey Bundesliga is about to embark on, this being:

No matter the approach, it’s super exciting to see a league of the Bundesliga’s stature taking their first steps into UGC games. In my personal dealings with them, I’ve found the team to be innovation driven and ahead of the curve when it comes to manoeuvring the business to be in-line with youth consumption habits (e.g. like broadcasting in 9:16 to suit mobile consumption habits). This is of course the driving force once again, with Peer Naubert, Bundesliga International’s CMO saying:

And when 70% of 8 to 17-year-olds agree that sports games help them increase their knowledge and understanding of the real sport, giving them more opportunities to engage with the Bundesliga & its clubs through platforms like Roblox is vital.

Matthew Ball’s ‘Gaming 2025’ Report

Epyllion & Sensor Tower have released a 223 page report on the State of the Gaming industry in 2025, including analysis on the inhibitors of growth, the mobile games market, the current realities surrounding AR/VR gaming, the contributors to console/PC gaming growth, the impact of emerging markets becoming hubs for new game IP, challenges around marketplaces and the potential levers that can be pulled to return to a growth environment.

Why you should care

TL;DR: According to the report, the global gaming industry is 1) expected to reach $321 billion by 2026, 2) shifting towards smaller, more high-quality games and hybrid business models, 3) continuing to rule the box office, with gaming IP becoming the main source of inspiration for movies & series, 4) despite the challenges faced over the last few years, poised for a resurgence with major releases and new hardware coming in 2025.

In full: It is quite a chunky report - 223 pages to be exact - which I’d recommend having a flick through in full during your morning commute as there are some great nuggets in there.

To highlight some of the key takeaways:

1) The bad news

It initially paints quite a grim picture of the games industry as we know it today.

Reduced growth of the industry. Reduced spending & playtime from consumers. Reduced investment from VC’s. Increased layoffs.

The report alludes to a myriad of challenges that have cumulatively contributed to the current state of the industry:

Combined with the fact that many new growth levers (see below) are still in their infancy and not currently able to drive significant revenue & player acquisition, it’s perhaps not surprising that it has been a challenging few years for incumbents and challengers alike.

2) The good news

Fear not, despite the gloomy start to the report, it does highlight a number of positive trends and opportunities for the industry:

New technologies, consoles, regulation and internationalisation, amongst others, are likely to all be contributors that can restore the industries growth trajectory.

Despite the challenges, gaming and interactive continues to grow in importance culturally, with more sway in complimentary industries like entertainment and more interest from marketeers and advertisers who are beginning to view it as their primary media channel.

With those tailwinds, amongst others, and the lessening of some of the headwinds the industry has been facing over the last few years, it would seem the the omens for the global games industry are fairly positive for 2025 and beyond.

In other news this week…

• FIFA launches Innovation Challenge: read here

• UK Government announces £60m funding package for creative industries: read here

• Juventus enter Kings League with Zebras partnership: read here

• Godzilla roars into Fortnite: read here

• Walmart doubles down on immersive commerce with Zepeto launch: read here

• US Soccer Federation & Bank of America announce long-term partnership: read here

• Donald Trump launched a memecoin on Solana: read here

• Livewire partners with Zynga” read here

• Formules partners with Versace for LensCrafters Eye Odyssey Roblox experience: 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 - thanks again for reading the latest edition of The SEG3 Report and see you next Tuesday for more of the same!