Although crypto prices have fallen, the Premier League signs a deal with an NFT-based fantasy soccer game

As part of a multi-year agreement, Sorare has licensed official player cards from the Premier League, the world's top soccer league.

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According to the exclusive multi-year agreement, Premier League-licensed NFTs will be available to players.

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People can compete in fantasy soccer games of five a side on Sorare, a Paris-based startup with 3 million users. Real-time performance on the pitch determines a player's chances of success.

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Two new features are also being added to the game by Sorare. Players can compete with league-specific player cards, and all-star teams cannot be selected because of the financial fair play feature.

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The Premier League - England's top men's soccer league - was rumored to be negotiating a licensing agreement with Sorare in October 2022. Due to an existing NFT licensing agreement between the Premier League and another company, it took longer than expected for the deal to be finalized.

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The deal is valued at £30 million, according to Sky News. Financial terms and the length of the contract were not disclosed by CEO Nicolas Julia.

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Although NFT trading activity has fallen sharply, the news comes nonetheless.

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With cryptocurrency prices down during the "crypto winter" and major exchange FTX going bankrupt, NFTs - or non-fungible tokens - have plummeted in value.

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NFT prices dropped 63% from $383.73 to $143.22 in Dec. 2022, according to data site CryptoSlam.

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There is also a significant decline in trading volumes. From $3.1 billion a year earlier, NFT sales dropped 78% to $678.2 million in December.

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According to Julia, Sorare has "trended very differently than the other players." Last year, the platform exchanged $500 million in cards, nearly doubling from $270 million in 2021.

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In spite of that, players are increasingly opting for the “free-to-play” mode since they can compete without having to pay.

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In Julia's opinion, 87% of Sorare players aren't spending money on it.

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In this context, Sorare's business model raises an obvious question: how does it generate revenue when most users aren't interacting with it?

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Julia said big-spenders anchor income generation, and they were enough. Every transaction via Sorare is subject to an unspecified fee.

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According to CryptoSlam data, Sorare has the third largest collection of NFTs worldwide. According to CryptoSlam, the firm processes an average of $1 million of transactions per day.

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Several sports leagues have partnered with crypto platforms, including the Premier League.

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There have been previous deals between Sorare and the MLB and the NBA.

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Crypto.com's deal to name Los Angeles' Staples Center arena and FTX's now-defunct sponsorship of Miami-Dade Arena are two agreements that have soured as cryptocurrency prices have tumbled.

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Because Sorare focuses on licensing of intellectual property rather than sponsorship, his firm was insulated from the effects of the crypto crash.

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The startup's last valuation by investors was $4.3 billion in September 2021. A number of top companies are backing Sorare, including Japan's SoftBank and venture capital firms Accel and Benchmark. In addition to Messi, Williams, and Mbappe, this company has also been backed by sports stars such as Lionel Messi and Cristiano Ronaldo.

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There have been controversies surrounding Sorare, and the company has been accused of encouraging gambling.

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According to a notice dated Oct. 8, 2021, the U.K. Gambling Commission is investigating Sorare.com to determine whether the company needs an operating license or whether its services do not constitute gambling.

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As far as the U.K. inquiry is concerned, Julia was unable to provide an update.

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French National Gambling Authority action led the startup to change its platform in November. In addition, the game's free-to-play components were strengthened. These measures must be enforced by March 31.

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