How can AI shape the sports tech industry?

As per an industry report, the Indian sports tech market is expected to grow from USD 1.2 billion in 2022 to USD 3.5 billion in 2027. In the past, the sports industry's hesitance towards technology likely stemmed from a more conservative, risk-averse culture and reliance on traditional methods. With the integration of technology and AI, the sports tech industry is experiencing a seismic shift. From performance analytics to fan engagement, technology is set to revolutionize every facet of the sports ecosystem. Creation of cutting edge technology requires high investment and the money flow has always been first towards deep markets first.

Sports industry has had its evolution. It is now that we are seeing the sports market being deep enough to support the additional investment towards technology investment. We see some world class technology at play in top pro sports competitions - IPL, ATP, Premier League (football) and across broadcast sports in the US. In most tournaments just a level below these the adoption of world class technology is lesser.

"But as we trickle down to grassroots sports, especially in India, there’s little capacity for grassroots academies to spend such amounts of money towards technology. Things however are getting better. Gradually, with awareness towards sports, the income and hence the capital available for these academies to make investments in technology is growing. There’s hope and progress, says Sudeep Kulkarni, Founder and CEO Game Theory.

"Whenever technology becomes cheaper, it gets democratized - resulting in it being available to amateur and recreational sports. We will see the future sports companies using this to build products for the recreational sports player and the current ones to stretch the boundaries of what is possible - imagine if every decision is accurate in live sports in real time: no VAR delays, no bad line calls, can an AI coach tell me what I should do to win against my opponent tomorrow, can all pickups be auto scheduled like online video games, can people be more engaged unique insights about their game and get them to compete more?, asks Kulkarni.

According to Megha Gambhir, CEO and Co-Founder, Stupa Sports Analytics, "It is essential to recognize the transformative impact data & analytics can have on amateur and grassroots sports. While much attention is often given to professional leagues and elite athletes, the potential for analytics to revolutionize the grassroots level should not be overlooked. Advancements in VR technology offer immersive training experiences and personalized coaching, making sports training more accessible and engaging for amateur players."

Role of venture capitalists and tech startups

"The current sports technology industry is geared towards broadcast of pro sports and data for pro athletes. Most of these happen via data annotation and sensor based input. The underlying technology is moving towards automation with computer vision and AI. "The shift has already begun in certain critical sports elements such as DRS for cricket and Goal-Line tech for Football. Moore’s law will eventually work here and the vision + AI technology will become better and cheaper. That’s when we will see this being applied to all sports analytics and broadcasting, says Kulkarni.

As the products get better, business can build a path to successful large profitable businesses. This is bound to attract institutional investors. We currently see a large number of companies vying for venture capital and the institutions are now getting aware of the promise of the untapped potential of sports. In the near future, there will be a large pool of capital to sports companies, because sports is one of those sectors which hasn’t had its modernization which lends itself really well to “category creating” companies. And venture capitalists have historically capitalized heavily from category creators.

Venture capitalists are attracted to sports tech startups for their potential to disrupt a lucrative industry. They recognize the value of scalable solutions that address unmet needs and drive efficiency. Sports and fitness tech startups with innovative products and a clear market fit are able to attract investment by demonstrating their ability to solve real problems and capture market share. Additionally, the growing convergence of sports, fitness, wellness, and gaming presents vast opportunities for startups to create integrated solutions that resonate with large consumer bases, and drive revenue growth, says Mustafa Ghouse, Founder and General Partner of Centre Court Capital, a gaming and Sports tech VC fund.

According to Ghouse, venture capitalists see these startups as the future of sports, and they help these companies by fostering an ecosystem where they can flourish and reach their full potential. They evaluate sports tech startups by assessing the market size and growth potential. Sizeable, expanding segments within the sports industry are the key areas they focus on, while their technology itself is assessed for its innovativeness, scalability, and ability to solve a specific problem or enhance a current process. The founding team's expertise in sports and technology, along with the startup's go-to-market strategy, sustainable revenue model, and potential for a clear path to profitability, are all key factors behind securing a VC investment, which helps in their long-term growth and success.

Trends in the sports tech startup landscape

"As the amount of data collected over time only increases, AI systems will keep becoming more intelligent and accurate with their predictions. Hence teams and coaches can create more successful strategies by analyzing opponent data. Moreover, teams can also implement tactical adjustments in real-time depending on the playing patterns of the opponent during the match. This makes a compelling case for players to keep reinventing themselves so that their patterns become more difficult to predict. This will only make sports more exciting with time to come," says Gambhir

With major players in the tech industry such as Amazon and Apple securing rights to the NBA and MLS respectively, the sports technology industry will aim to bring audiences closer to the game than ever before.

Additionally, the advent of technology like the Apple Vision Pro looks to bring revolutionary spatial computing to seamlessly blend digital content with the physical world. Cutting-edge apps like PGA Tour Vision and initiatives like Apple TV's immersive 3D video recap of the 2023 MLS Playoffs are revolutionizing fan engagement by offering unparalleled proximity to the action. With PGA Tour Vision, golf enthusiasts can transform their surroundings into an immersive golf experience, while Apple TV's venture introduces viewers to a 180-degree 3D video with Spatial Audio, providing an unprecedented level of immersion. These innovations are redefining the boundaries between fans and the sports they love, bringing them closer to the excitement than ever before.

Wearable technology and data analytics are emerging as another key area poised to reshape the sports industry. These sophisticated tools offer a multitude of benefits for athletes. Real-time performance insights gleaned from smartwatches, GPS trackers, and biosensors (capturing data on heart rate, muscle activity, sleep, and hydration) empower coaches and athletes to tailor training regimens for peak performance and minimize overtraining.

Additionally, wearables can detect subtle movement shifts, acting as early warning signs for potential injuries, allowing for preventative measures. For fans, data analytics personalizes the viewing experience. Broadcasters can leverage augmented reality (AR) overlays to showcase customized player statistics or offer varied camera angles based on individual preferences.