Magic Johnson Invests, Buys Two ‘Virtual Teams’ In New NFT Sports League
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Los Angeles Lakers legend Earvin “Magic” Johnson has just bought two new sports franchises—in the metaverse.
Johnson is investing in Beverly Hills-based SimWin Sports, a digital sports league where virtual teams and athletes backed by non-fungible tokens (NFTs) compete in simulated games. In addition to taking an ownership stake in the startup, Johnson has acquired a yet-to-be named basketball team and football franchise called the Los Angeles Magic. Financial terms of the deal were not disclosed.
Founded in 2019, SimWin Sports is among a crop of startups merging fantasy sports with blockchain technology. The league’s NFT teams are owned by well-known athletes and celebrities, from Hall of Fame NFL wide receiver Jerry Rice to former Backstreet Boys singer Nick Carter. SimWin fans, meanwhile, can buy, sell and trade NFTs representing fictional players who can be drafted by the league’s team owners. Those NFT holders can potentially earn money, too, when team owners like Johnson pay their players salaries and performance bonuses.
“This multibillion-dollar business is about to take off and the SimWin model is an excellent way for sports fans to get involved in this groundbreaking opportunity,” Johnson, who will also serve as an advisor to SimWin, said in a statement.
SimWin’s virtual sports contests are largely games of chance. Team owners can pre-set their game strategies and rosters, while player NFT holders may “train” their players to improve their attributes—but player performance itself is simulated through what SimWin calls an “innovative AI performance model.” The digital athletes, in turn, develop over the course of their careers and can go through hot and cold streaks, much like real athletes.
“From a fantasy perspective, for all those people who wanted to own a team—whoever wanted to be a player, manager or player agent—they'll have an opportunity to do that,” Andre Johnson, SimWin’s executive vice president of business development, told dot.LA. (Andre Johnson, a former gaming executive at Sherman Oaks-based Mythical Games and L.A.-based Virtual Reality Company, is Magic Johnson’s son).
The company has sold “dozens” of teams so far, including some for a seven-figure price, Andre Johnson said, while NFTs for players are expected to run between $300 to $600 for fans to purchase. SimWin also plans to generate revenue through merchandise and TV distribution deals, and aims to integrate sports betting through licensing deals with third-party sportsbooks, he added.
The 22-person startup expects to launch its first virtual football season by late summer or early fall, according to Andre Johnson. SimWin has raised $13.25 million in funding to date, according to PitchBook Data, from investors including 1UP Ventures, Animoca Brands, Infinity Ventures Crypto, Bron Studios, Kingsway Capital and YOLO Investment. The firm’s CEO is David Ortiz, a former senior producer on EA Sports’ popular Madden football video game franchise who’s also worked at the gaming studios of Sony and Microsoft.
Other companies are attempting NFT-based sports leagues of their own, including Hermosa Beach-based Fan Controlled Football, which lets crypto owners call the plays in real-life games. Andre Johnson called sports the “biggest form of entertainment,” but noted that most American pro sports leagues only run for a few months each year. SimWin—which says it will run games 24 hours a day, every day—is betting that die-hard fans will engage all year long with its more than 5,000 contests annually.
“We want everything that you would see from a traditional sports franchise,” Andre Johnson said. “All the ways you can generate money, all the things you can do, we're just doing it from a digital perspective.”
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Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
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