Batter up! Major League Baseball (MLB) is stepping back up to the digital plate, launching a fresh lineup of digital collectibles for the 2023 season. This exciting venture marks the third season of collaboration between MLB and Candy Digital, an NFT business determined to redefine fan engagement in the digital age. In a world where digital ownership is becoming increasingly significant, are MLB NFTs the next home run for sports collectibles?
Candy Digital: From Rookie Sensation to Seasoned Player
Candy Digital burst onto the scene in 2021, riding the crest of the NFT wave. Founded by a power trio of entrepreneurial heavyweights – Gary Vaynerchuk (VeeFriends creator), Michael Rubin (Fanatics CEO), and Mike Novogratz (Galaxy Digital CEO) – Candy Digital aimed to revolutionize how fans connect with their favorite sports and entertainment properties. The initial buzz was palpable, but like many in the burgeoning NFT space, Candy Digital faced a period of recalibration in late 2022 and early 2023.
Let’s break down the key moments in Candy Digital’s journey:
- Rapid Ascent: Launched in June 2021, quickly gaining traction as an official MLB partner.
- Funding Milestone: Secured a whopping $100 million in October 2021, catapulting its valuation to a staggering $1.5 billion. Investors included Insight Partners, Softbank’s Vision Fund, Peyton Manning, and more.
- Market Headwinds: Faced industry-wide challenges as the initial NFT hype cooled down.
- Workforce Adjustment: Like many tech companies, Candy Digital made the difficult decision to lay off over a third of its staff in November 2022 to adapt to changing market conditions.
- Ownership Shift: Fanatics, initially holding a near 60% controlling stake, sold its ownership to a consortium led by Galaxy Digital in January 2023.
Fanatics Steps Back, Galaxy Digital Steps Up: What Does It Mean?
The shift in ownership raises some interesting questions. Michael Rubin, in an email to Fanatics personnel, acknowledged the evolving landscape, stating, “NFTs are unlikely to be sustainable or lucrative as a standalone business.” This might sound like a complete exit, but Candy Digital CEO Scott Lawin clarifies that Fanatics remains invested, albeit at a reduced level.
“Fanatics was a terrific partner and investor to get started with—they’re still an investment in Candy, albeit on a lower scale,” Lawin explained in an interview with Decrypt. He further elaborated on the strategic divergence:
“Fanatics is a physical-first firm, they manufacture physical sports memorabilia. Fanatics just purchased legendary trading card brand Topps, which also has its own NFT project. Candy was and continues to be a digital-first business.”
This distinction is crucial. Fanatics, with its acquisition of Topps, is doubling down on the physical sports memorabilia market, while Candy Digital is doubling down on the digital frontier. Galaxy Digital, with its deep roots in the digital asset space, seems like a natural fit to lead Candy Digital into the next phase of NFT evolution.
MLB 2023 Digital Collectibles: What’s on Deck?
Despite the industry shifts, Candy Digital is charging ahead with its MLB partnership. So, what can fans expect for the 2023 season?
- Showstopper ICON Series: Launched just ahead of Opening Day, this NFT collection features 43 MLB stars. Priced at $43 per pack, each pack contains three player collectibles. Demand is high – Lawin reported the initial drop sold out in a mere three minutes!
- Commemorative Game Tickets: Back for another season, these NFT collectible tickets offer a unique digital memento for game attendees. Last season saw approximately 200,000 NFT tickets redeemed. For context, a #1 edition of 451 2022 Pittsburgh Pirates Season Ticket Collectibles fetched $400 on Candy’s secondary market.
These collectibles are built on Palm, an Ethereum sidechain optimized for NFTs, ensuring efficient and eco-friendly transactions.
Beyond Collectibles: The Future of NFT Ticketing and Fan Engagement
While currently, MLB fans still need a separate regular ticket for ballpark entry, Lawin envisions a future where NFT tickets evolve beyond just collectibles. Imagine a single digital asset serving as both a collectible and your ticket to the game!
According to Lawin, the potential is immense:
“I believe it’s unavoidable that the collectible ticket and the entrance ticket will merge over time. Being able to produce a dynamic digital asset that’s a collectible and contains information—possibly updated box scores, video content, and so on—and then being able to monitor that fan journey on chain and having that information available to teams so they can determine who their actual fans are… That excites us tremendously.”
This vision extends beyond just ticketing. NFTs can unlock new avenues for fan engagement, offering:
- Dynamic Content: NFTs can be updated with real-time game stats, video highlights, and exclusive content, enhancing the collector experience.
- Fan Journey Tracking: Blockchain technology allows teams to understand fan behavior and preferences, leading to more personalized experiences.
- Enhanced Access: NFT tickets could eventually grant access to exclusive events, merchandise, and other perks.
Candy Digital is also exploring innovative technologies like 3D volumetric scanning and augmented reality (AR) to enrich its digital collectibles. Their past collaboration with Netflix for Stranger Things NFTs showcased the potential of this approach, and Lawin plans to integrate these technologies into future sports collectibles.
Navigating the NFT Landscape: Settlers vs. Tourists
Scott Lawin offered a candid perspective on the broader NFT market, distinguishing between “tourists” and “settlers.” The “tourists,” who were in it for a quick profit during the peak hype, have largely exited the space as the market cooled. However, the “settlers,” those with a long-term vision and commitment to building valuable experiences, remain.
“I suppose those people are mostly gone,” Lawin said, referring to the tourists. “The tourists are gone, and the settlers are here to keep building.”
This sentiment reflects a maturing NFT industry. The focus is shifting from fleeting hype to sustainable value creation and real-world utility.
The Competition and Collaboration Landscape
Candy Digital isn’t alone in the sports NFT arena. Key competitors include:
- Dapper Labs: Creators of NBA Top Shot, NFL All Day, and other popular sports NFT marketplaces.
- Sorare: A fantasy sports NFT platform with partnerships across MLB, NBA, MLS, and European soccer leagues.
While these companies operate in the same space, Lawin sees potential for collaboration, particularly with Sorare, which is MLB’s “official NFT baseball game partner.”
“I’d want to find a way to collaborate with Sorare to offer benefit to both their and our clients,” Lawin stated, highlighting the potential to create a more interconnected and rewarding experience for collectors and fans across different platforms.
Conclusion: Is Candy Digital Still Sweet on NFTs?
Despite the challenges and market corrections, Candy Digital remains firmly committed to the NFT space. With a renewed focus, strategic backing from Galaxy Digital, and a continued partnership with MLB, Candy Digital is betting on the long-term potential of digital collectibles to transform fan engagement. As the lines between the physical and digital worlds blur, MLB NFTs, powered by Candy Digital, are poised to play a significant role in shaping the future of sports fandom. Keep your eye on the ball – the digital game is just getting started.
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