Globally, Panini is the biggest name in the sports trading card business – a household name in its own right, with partnerships in place with global brands, including FIFA, Disney, and NASCAR.
In the last year, the company has started to move into the space of digital collectibles – in particular, experimenting with NFT technology in order to create scarcity and value with its digital cards in the same way it does with its physical collectibles.
While the timing of this move may have coincided with a dramatic crash in the global marketplace for NFTs, Panini is pushing ahead with its plans. As Jason Howarth, VP of marketing and digital at Panini USA, told me, the main effect of this collapse will be to “weed out” those who simply moved into the market to make a quick buck and those who see long-term value in the technology.
He said, “We’ve focused on building a sustainable blockchain marketplace that’s private and controlled, so we don’t have to worry about fake items coming onto our marketplace … and the only way you can consume our NFT products at this time is within our private blockchain.”
One reason that NFTs make a lot of sense for the business is that it allows it to take a cut of the valuable resale market. With cards in the company’s best-loved series, such as FIFA and NBA, often trading hands for tens of thousands of dollars, this could create a lucrative secondary revenue stream.
Crypto Collapse
Of course, the NFT and wider crypto space has been rocked recently by both a dramatic collapse in the trading value of the assets as well as a number of scams and business failures. Most notable among these are the collapse of crypto exchange FTX and Silicon Valley Bank, which banked a number of prominent players and startups in the industry.
Do these failures suggest we have reached the end of the great Web3 experiment before it has even taken off? Well, Panini doesn’t think so. Some believe what we’ve seen is simply the equivalent of the dot com stock market bubble crash in 2000. The technology itself is sound, but there are simply not yet enough truly valuable use cases to support the industry that’s emerged around it.
Panini USA has retained centralized control over its own marketplace rather than jumping head-first into big web3 ideas like decentralization and user-owned online communities. Its aim is to generate value in the market via interaction with customers and collectors rather than pumped-up valuations thanks to investment from venture capitalists.
Howarth describes this as building a “sustainable” market for NFT collectibles.
“I think that’s helped us weather the crypto storm,” Howarth tells me.
“We’ve got a lot of exciting elements coming into the blockchain marketplace; it’s going to be a lot more user-friendly and more user-focused, giving users the ability to see individual card sales data, pack data, collector-by-collector collection data … so they really understand what’s happening in the marketplace.”
So part of the philosophy is that while the move into digital collectibles may not provide the same tactile experience, collectors can instead immerse themselves in the stats and data that can be created by using a digital platform.
“We have a showcase where users can show off their favorite NFTS; you also have the ability to see that if there’s an existing NFT that’s for sale, you can see the value of it and purchase it with a single click.”
Unlike the vast majority of NFT marketplaces that currently operate, users of Panini’s marketplace buy and sell collectibles using US dollars rather than having to go and obtain cryptocurrencies. This is a process that can be technically tricky for some and can also leave less wary users vulnerable to fraud and scams.
Howarth says, “There was a lot of uncertainty … and people not understanding how to go out and get a crypto wallet, and buy crypto, we wanted to let people just go and buy our product, and the best way was to just let the transactions take place in US dollars.”
Hybrid Collectibles
One innovation that’s driving engagement is the bundling of physical trading cards together with digital NFT versions.
Howarth says, “There’s pluses and minuses to both. Physical is never going to disappear; there’s that tangible element of having the product in your hand and being able to hold it and display it … it’s something that’s never going to change. In fact, we continue to see growth in the physical trading card category globally in places like Asia, Australia, New Zealand, and Europe.
“I think you’re going to have these tracks where both [physical and digital collectibles] co-exist.”
According to data from the NFT sales tracking website cryptoslam.io, sales of…
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