How well are Sorare doing and what does the future hold?

How well are Sorare doing and what does the future hold?

Introduction

It’s been a busy few weeks in the Sorare world. After a tournament summer with bespoke competitions for Euro 2020, Copa America and others it’s time to take a step back, take stock and assess where things are ahead of the start of the new European season.

The Game

It isn’t always easy being a Sorare collector or SO5 player. Fundamentally, SO5 is a difficult game to win and has the feeling of only ever being one DNP away from another gameweek write off. Recent months have introduced more complexity and challenge, with shifting gameweek deadlines, new reward structures and confusion around competition eligibility. None of this is meant as any strong criticism of the Sorare team or the platform; what they have built here is nothing short of remarkable in terms of breadth and ambition with a genuine chance for all managers to win prizes each week. The SO5 matrix remains the best effort anyone has yet come up with for rewarding and scoring the efforts of individual footballers in a way which is fair, balanced and consistently reflects their real world contribution to matches.

Is it always fun? No, of course not. Scrabbling to find team news from the J League at 6.30am on a Friday as you set another speculative team into Asia D4 isn’t particularly enjoyable and it’s even less fun when your highly prized South Korean left back is mysteriously dropped from the team. But this exoticism is also what makes Sorare such an attractive proposition to football fans around the world. There is someone sat in his or her bedroom in Changwon right now who knows exactly what’s happening with their local teams and can put that edge to use. It’s hard to think of any other sports ‘gaming’ experience which rewards research quite so extensively; the names of David Ochoa, Jon Tolkin and Nail Umyarov will forever be ingrained in my mind as successful trades made on the back of delving into scouting reports and data driven analytics. 

Prizes and yields continue to be really strong. With threshold payments sticking around longer than most of us expected, it’s possible to grind a double digit percentage return from even a mediocre and small collection of cards in Global All Star Division 4. More cards are now being handed out as prizes each week (certainly as a proportion of playing users) although admittedly many of these cards (Tier 3 in particular) are of extremely limited utility. It’s often possible to find a buyer somewhere however, especially with Pawel “Instant Sell” Trader still making offers for whole galleries. Concerns remain – especially from larger accounts – around the lack of transparency in how prizes are allocated following the conclusion of gameweeks. Even within Tier 0 or Tier 1 there is a persisting high degree of variance between the rewards on offer and the frustration of anyone who has invested considerable sums is legitimately fair when the prize distribution process could (at best) be described as opaque.

We look forward to the new threshold system coming online in the near future as well as some minor tweaks to the SO5 matrix which will hopefully address the relative value of attacking full backs to their other defensive counterparts. Room for improvement remains and we would welcome some exploration of more flexible Gameweek deadlines, a substitute model which mitigates the “all or nothing” risk of DNPs and additional transparency on prize allocation. All of these are relatively minor gripes however and for the majority of Sorare users we go into 2021/22 season in a really strong position.

End of term grade: B+

The Market

It’s been a very unusual period for market volatility, especially when set against the backdrop of significant Ethereum and broader cryptocurrency market decline. Only 3-4 months ago the market in Rare cards appeared to a runaway train, with some single cards such as the £20k M’bappe boom commanding eye-watering sums. Things have undoubtedly settled down since that point with prices falling markedly and then stabilising during the summer months. 

More new teams and leagues being added is always welcome and grows the overall appeal of Sorare to a broader base of football fans. The innovation of signing commercial deals which have allowed national teams to be added is a brilliant example of the agility the Sorare management team bring to this endeavour; giving us the opportunity to own cards in players which otherwise may be out of reach for some time. As card supply grows, there are always concerns that demand may not follow but the evidence is currently to the contrary. The number of collectors who own five rare cards or more is now higher than ever and this metric alone has reflected rapid exponential growth in the userbase over the last six months. 

The implementation of the new scaling solution and the ability this unlocks to complete card and ETH transfers close to instantaneously within the Sorare ecosystem is also a huge boon to market liquidity. Hopes are high that we now have a genuine trading platform in which positions can be quickly built and exited, provided of course that demand continues to grow for the cards themselves.

In reality, the Sorare market is still in absolutely embryonic form. Active users are measured in the thousands rather than anything higher and with an untapped global audience which is unconstrained by any kind of meaningful local regulatory limitations, the growth potential is virtually limitless for the Sorare platform. It would be no surprise whatsoever if the exponential growth we have witnessed this year continues into 2022, with active users in the hundreds of thousands by the time next year’s end of term report is written. This should make anyone involved with the Sorare ecosystem incredibly excited about what the future may hold for the market as a whole. 

We learned this week that the new scarcity will be a 1/1000 card to add to the existing hierarchy of 1, 10 and 100. This is logical of course and was widely expected, but without a doubt represents both significant threat and opportunity for Sorare as a platform. Whilst this may seem something of a dichotomy, the logic is real – the opportunity of reducing the cost of entry to the Sorare world is huge. The number of people who either have the means or motivation to spend 1 ETH assembling a pretty average card gallery is naturally relatively limited, even on a global scale. With 1000 cards per licensed player, there is huge potential to make this game accessible to the masses, where genuinely useful cards can be picked up for the price of a cup of a coffee rather than the price of a coffee machine. But what impact will this have on the Rare tier? To date, Rare cards have been the default point of entry and if seemingly expensive this has been explained away by simply being the price required to play the game. If the game can be played for a fraction of the cost, will there still be casual users willing to buy Rare tier cards? Nobody can know exactly how this transition will change the long term economics of the Sorare marketplace but it will be a fascinating road ahead as we find out.

End of term grade: B

The User Experience

One of the biggest gripes we hear from people who stop by in the Discord or reach out as prospective new sign ups is – “Why isn’t there a Sorare app?”. This seems therefore like an obvious place to start in critiquing the user experience of the Sorare platform. There is no doubt that the lack of a mobile / tablet app is a constraining factor on the platform’s credibility to prospective new users and usability for existing players. The potential in this space is enormous, with a new front end, social integration and the introduction of scouting tools. The reality of this situation is obvious, the Sorare management team remains tiny and bandwidth to progress new ideas and solutions is obviously constrained. The introduction of an App during the 2021/22 season really has to be moving up the list however if the platform has any hope of capturing that global audience.

App aside, things haven’t moved on significantly from where Sorare was a year ago. The site is functional and new additions such as custom badges and banners have been a nice way to add a splash of colour. The lack of a transaction history is still desperately missing for those of us who like to bring a level of scientific precision to our collections and conducting simple tasks such as tweaking the asking price for a card or automatically relisting unsold players remain frustratingly absent.

There remains much to do in this space but this is a huge opportunity for Sorare to generate significant goodwill and customer loyalty by demonstrating meaningful progress.

End of term grade: D

The Future

There is so much planned for the months ahead that its not immediately obvious where to begin. We’ve already touched on the new scarcity and the risks and opportunities that this development may bring to the marketplace. But with the new scarcity also comes new leagues, with the Academy expected to join the existing SO5 gameworld and provide a new route for managers to use their cards in a way which generates a return. If that wasn’t enough change for SO5, we are also expecting the introduction of the new threshold system, with some new ‘gamification’ of threshold reward accrual and the opportunity to rack up larger prizes from consistent performers rather than than having to finish on the podium in the divisions, an ask which gets ever more difficult.

New clubs and leagues are a certainty and we will never be disappointed by the ability to grow our card collections with players from an ever growing roster of clubs, leagues and nations. As more of the established professional football leagues become more familiar with the commercial opportunities generated by NFTs, the attraction of a link up with Sorare as an established operation will be difficult to refuse. Watch this space with interest.

In conclusion, the future seems incredibly bright for Sorare. 2020/21 was the year in which the platform came of age and demonstrated that it has the recipe for bringing football fans, speculators, fantasy players and collectors together into a unique ecosystem. If the last twelve months was an exciting and rapid rise however, it could be nothing when compared with the year ahead.