The sporting landscape of 2023 has been a realm of unprecedented transformation, where technological advancements, shifts in athlete culture, and innovations in fan engagement have collectively shaped a pivotal year.
In this newsletter, join us as we revisit industry trends we predicted at the start of the year and delve into the developments that actually transpired, with (as always) an Asian POV.
Get ready for an evaluation of what transpired in 2023 across our predictions:
- Accelerating Adoption of ESG in Sports
- Web3 & Fan Loyalty Integration Accelerating
- NIL (Name, Image, Likeness)
- Faster Adoption of AI for Content Creation, Broadcast & Sports Tech
- The Changing Capital Structure of Leagues & Teams
- Middle East Emerging as a Regional Sporting Powerhouse
- Asia Powers Global Mobile Esports Trends
Accelerating Adoption of ESG in Sports
Far from a niche concern, ESG and purpose principles increasingly became integral to the strategies and operations of leagues, teams, and athletes in 2023.
(Picture: AST Partner: 17Sport)
In PwC’s Global Sports Survey, 49.7% of respondents placed sustainable, long-term usage of sporting venues as their second-most critical sustainability priority for major sports events, indicating its newfound importance in the mind of investors and public alike. The Sarawak Stadium in Malaysia (inaugurated August 2023) boasts of state-of-the-art sustainability features like rainwater harvesting, solar panels, energy-efficient LED lighting systems, and robust waste management.
The 19th Asian Games, held in Hangzhou applied incredible green and sustainable practices across venue construction, green energy supply and event operations – leading to 20% lower kitchen waste generation while achieving 70% recyclable and renewable materials ratio in licensed goods and venue decorations.
It’s not just stadiums that are going green; entire sports ecosystems are actively incorporating ESG principles. The J. League in Japan is leading the pack from using recycled materials to offering public transportation incentives for fans and engaging in educational programs, with the league making significant strides toward becoming a climate leader. Clubs like FC Osaka have even achieved carbon neutrality, demonstrating that sports organizations can indeed champion climate action.
Finally, the rise of purpose-driven marketing has led to CSR and brand values being integrated into agreements, reflecting the industry’s embrace of a more holistic view of return on investment. Partnerships are increasingly being leveraged to increase consumer synergy and highlight brand or company values.
Web3 & Fan Loyalty Integration Accelerating:
Asia has emerged as a hotbed of innovation in the sports and entertainment industry, with a keen embrace of cutting-edge technologies such as Web3 to redefine fan engagement and content creation.
(Picture: Game7)
As per PwC’s Global Sports Survey, more than 50% of respondents acknowledge that Web3 will play a significant role in their future business. However, the survey also highlights that a substantial 74% do not currently have a Web3 strategy in place.
In conclusion, 2023 has not seen the level of integration that was predicted for Web 3 – in sports, and everywhere else. This signals both the recognition of the importance of Web3 and the need for a more concerted effort to align strategies with this evolving technological landscape.
NIL (Name, Image, Likeness)
The NIL landscape has witnessed remarkable growth, with deals increasing by 146% year-over-year. Notably, women’s basketball athletes experienced a 186% YoY increase in sponsorship, surpassing men’s basketball in new deals. The surge in viewership, up 11% on ESPN for college women’s basketball, underscores the increasing popularity and marketability of female athletes.
Gamer Pakistan is spearheading an ambitious initiative in Pakistan, aiming to establish 10 to 20 team franchises with a franchise cost ranging from $50,000 to $75,000. What makes this initiative particularly groundbreaking is its focus on the commercialization of college athletics, introducing an equitable distribution of NIL rights among associated athletes.
Faster Adoption of AI for Content Creation, Broadcast & Sports Tech:
The influence of Artificial Intelligence (AI) on sports has been swift and transformative, touching various facets of the industry.
(Picture: IEC)
The Paris Olympic Games plan to leverage AI algorithms for efficient content tagging, customized content for broadcasters and fans, and motion tracking technology for events like marathon, road cycling, triathlon, and canoe sprint (as we touched on with Kinomap in our previous article.
Wimbledon 2023 partnered with IBM iX by feeding unprocessed ball and player tracking data into AI-driven software, allowing the extraction of a variety of novel data points; automating key insights, business processes and digital operations.
Fujitsu and the International Federation of Gymnastics (IFG) set an illustrative example by adopting a deep learning-based system that assists judges in scoring gymnasts’ routines. The system utilizes computer vision and deep learning to capture and analyze the movements of gymnasts from multiple angles, revolutionizing the scoring process. Additionally, AI has found a place in content creation, with platforms like Wordsmith generating automated summaries of sports events, adding a layer of efficiency and dynamism to sports journalism.
The growth of AI in sports is not without its challenges, however we’ve seen incredible traction this year with no signs of a reversal, showcased in our infographic below.
The Changing Capital Structure of Leagues & Teams
The financial foundations of leagues and teams have undergone a seismic shift, embracing diverse investment sources and innovative capital structures.
(Picture: Yieldstreet)
Sovereign wealth funds have emerged as influential players in the APAC sports market. A notable example is the Public Investment Fund (PIF) of Saudi Arabia, which reached a framework agreement with the PGA Tour and DP World Tour in June 2023, merging their commercial operations into a new entity.
They have also invested in the Asian Tour and have planned on staging more LIV golf events in the region in 2024. Subsequent high-profile acquisitions, such as Jon Rahm joining LIV Golf for over $300 million, underscore Saudi Arabia’s commitment to reshaping the global sports landscape.
Venture capital firms are increasingly recognizing the potential of sports tech startups in APAC. India, in particular, has experienced a boom in the sports tech industry, with startups securing accelerated funding. Sports tech industry investments reach US$10.1 billion during Q3 2023 (Drake Star), fueled by factors such as rising sports popularity, increased smartphone adoption, deeper fan engagement and growing awareness of fitness benefits.
Middle East Emerging as a Regional Sporting Powerhouse
Contrary to conventional perceptions, in just over 2 years since the PIF’s takeover of PL Club Newcastle United, the Middle East has cemented it’s place as a significant sporting powerhouse in Asia.
(Picture: Washington Post)
The sports sector in the Middle East, valued between $10-15 billion, is projected to reach $25-30 billion by 2030. The World Economic Forum anticipates a 8.7% growth in the Middle East’s sports industry by 2026, outpacing the global sector’s 3.3% growth.
In Saudi Arabia, women’s participation in sports has skyrocketed by over 150% in recent years. This surge is not just about breaking records on the field but is a critical component of national health and wellness agendas. Initiatives like Saudi Arabia’s Vision 2030 program and the Dubai Sports Council’s Women’s Sports Committee have been instrumental in fostering this positive change.
The Saudi Pro League (SPL) has witnessed transformative signings, including Cristiano Ronaldo’s move to Al-Nassr, Karim Benzema to Al-Ittihad, and Neymar to Al Hilal. These moves have not only attracted significant sponsorship and broadcast deals but have propelled the SPL towards its goal of increasing annual revenue from $120 million to $480 million by 2030.
Saudi Arabia currently boasts over 300 sports sponsorships. The Middle East is not only making waves in traditional sports but is also targeting a $5 billion investment in the Indian Premier League (IPL). Additionally, it is set to host an inaugural esports world cup starting in 2024, further solidifying its status as a global sporting hub.
Asia Powers Global Mobile Esports Trends
APAC stands as the uncontested powerhouse of mobile esports, driving global industry trends to new heights in 2023.
The mobile games market in Southeast Asia is projected to surpass $2.8 billion in 2023, offering significant growth opportunities for the region. The percentage of the population using mobile games is projected to increase from 19.1% in 2023 to 22.9% by 2028, indicating a growing market and a higher level of engagement with mobile games in the region.
Esports has been a major driver for gaming in the region, and its inclusion as an official medal sport in the Asian Games highlights its growing mainstream acceptance. Thailand’s historic win in the mobile phone game Arena of Valor at the Asian Games reinforces the region’s dominance in esports.
With tournaments such as the PUBG Mobile Global Championship (PMGC) attracting over 3.8 million concurrent viewers in 2023, while Mobile Legends Bang Bang (MLBB) recorded over 5 million peak viewers at M5 World Championship Grand Final. The event also broke the TikTok esports viewership record, with 1.1 million viewers tuning in through the platform.
The Lumikai Gaming Report 2023 reveals China’s leadership in mobile game downloads, with a staggering 25.9 billion downloads. India follows closely with 15.4 billion, while the USA, Brazil, and Indonesia boast 4.7 billion, 4.7 billion, and 4.4 billion downloads, respectively. As a result there will be increased investment both from governments and private investors in this sector in Asia.
CONCLUSION
In summary, the Asian sports and sports tech landscape in 2023 has been a mosaic of sustainability, technological innovation, and strategic investments.
From the embrace of ESG principles to the surge of mobile esports in Asia, the region has showcased its adaptability and forward-thinking approach.
As we step into 2024, the integration of technology, social responsibility, and diverse investments will continue to be the driving forces shaping the future of sports in Asia.
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