GM Legends,
Around a month ago we launched Rep. Has it worked?
Partially. Rep plus our market health spending has slowed the cash exiting market significantly, but not yet enough:
| Market | Cash exit — 25 days before Rep | Cash exit — 25 days after Rep |
|---|---|---|
| ⚽ Football | −14.1% | −5.4% |
| 🏈 NFL | −16.8% | −12.1% |
A small group. A big impact.
What stands out in the data is how much of the sell pressure comes from a very small group. From 10 September to 10 October, just under 5% of active trading accounts accounted for 61.4% of net direct selling. That's 50 accounts out of 1,012 trading across Football and NFL.
Of those 50 accounts, 43 of them - 86% - were net sellers both before and after Reputation launched. Most of the selling comes from the same people. Month after month.
You may recall when we launched Rep we held something of an amnesty. We gave almost everyone who had been playing higher Rep tiers even when we knew they had not earned them. We'd hoped that if we showed them they were valued and offered them benefits they might change their behaviour.
But they didn't.
I want to turn the page now to an era focused on growth. I know our managers do too.
I am done with spending half of our development time on infrastructure to manage the same handful of accounts when we could be focused 100% on building things that make the actual game better. I'm done with watching our marketing team run good campaigns on events like the World Cup and new seasons only to see the same people use it as exit liquidity. And I'm done with watching our Community team get daily abuse and grief about number go down - most often from the very same people who are always causing the drops.
Protecting the managers who play
We are 100% determined to build a healthy, orderly market for managers to play in. When we launched Rep we created the tools to govern it. We're going to start using them.
We are beginning with a small number of long term drawdown accounts. For these 6 accounts we're introducing two-week timeouts on cheap selling: zero usable reward protection and a minimum 20% direct-selling fee, with higher applicable tiers still applying. They can continue to play, buy and swap. If they want to draw down they do so into the applicable exit fees, not cheaply.
That's just 6 accounts out of over 1,000 active traders. If you're playing the game, taking rewards and selling now and then - nothing here changes for you. Keep doing it without worry. The vast majority of managers have not been impacted by any of these changes. This is targeted surgical action, not blanket. We want our long term managers to win and we want them to have a healthy market to trade in.
I am also giving one more notice to the accounts that have continuously been net selling for months that we gave generously high Rep levels to at launch. High reputation and low fees is a perk for managers who contribute as well as take, not something to be taken for granted or used as a forever cheap exit facility. This week's reviews will look at those patterns, and where it carries on, those accounts will be set to the Reputation level actually warranted by their account history, not the generous interpretation given at launch. This can result in loss of privileges including allowances for cheap selling and lower fees.
With the above changes, the message is clear. We will not allow the market and the valued 95% of our managers to be continuously drained by the same small number of people week on week.
We are on the side of our long term managers who love the game and want to be here. Always have been. The decision to manage our market is unique and I am aware controversial - but I believe it will ultimately be the reason Sport.fun is different from previous completely open markets that just have not worked.
Reputation matters
I am acutely aware that we need to do more work on the Rep system.
It is currently not clear enough in the UI what a clean fast exit is, leading to scare stories about "5 month exits" and the like. This is obviously not the intent - dragging it out is bad for everyone and it is not an efficient path - bleeding out slowly every week will start to reduce Rep - e.g you won't be able to be a net seller every week and expect to keep the highest Rep level.
The "persistent net drainer" likely falls into two categories - the people who are just going to do it all the time because that is their objective - selling into any events like World Cups/new seasons and then maximising weekly extraction (Let's call them Manager A). Another is the person who has been playing legitimately and decided they want to downsize or leave and sells weekly to meet a target (Manager B). B isn't doing anything wrong - but even B's weekly drip weighs on the market. Our job is to find ways to manage A to prevent them harming legitimate players and give B a better option. (It is also often hard to tell them apart, so we'll work on it and be fair as we go).
The best route is to allow managers to exit cleanly - for a fee the ecosystem can take. I want the Rep system to become sophisticated enough to tell the difference between A and B so that we can offer them different exit prices. When you are done playing and are in good Rep standing - leaving immediately with around ~80% is what we're aiming for (when compared to other comparable games). For managers in poor standing it could be less, and we likely have to deal with very large accounts a bit differently, perhaps through Manager Swaps (more on that below), at least until liquidity improves in the market.
So next on Rep our priorities are a simple single "exit button" at a reasonable rate for managers in good standing - we're targeting November for the first version - and Manager Swaps for those moving in size to follow this year. The latter is the best possible exit mechanism when it's time, but it needs willing buyers and a stable market to work effectively. We don't have that yet, but we will keep working until we do.
We are also working on ways to give extra room to manoeuvre on sells to managers who genuinely deserve their high Rep tier, including priority access to that facility - making high Rep even more valuable.
My hope is that our managers take away from this that there is a better way to exit when needed coming than slow bleeding every week which harms everyone, and is also a pain in the ass for the manager). And that is not inevitable that you have to sell before "Manager A" - we are on the case.
Standing behind the market
As Rep rolls out we expect some managers to sell into the exit fees which is fine, and the Market Health Bot is on duty when that happens. We have already put around $150k of liquidity behind the market in the previous 4 weeks, and will increase spending if needed. The Market Health Bot will return purchased shares to the reward pool for the lads.
We stand behind our market with real cash. That's active management, not a guaranteed price floor.
It should feel good to be big
We also want to address something else - it should feel good to be big. The larger managers I’ve spoken to understand and back these changes. They get more rewards but we also ask more of them as it is difficult to operate in size in a player market.
Larger managers in good standing should have stronger reasons to play through one account. We're developing a benefits package aimed at "Major League" players, starting with our top 25 managers. This includes dedicated support and a VIP chat, unique prizes and priority access to Manager Swaps when we bring them in to facilitate moving in size.
Back to building the game
Which brings me to what we all really want to be focusing on - how we make the game more fun, more intuitive - a place you want to invite your friends. Market health is a foundation of that - as the chief reason we are told people are reluctant to invite friends is the market being drained. But we want to focus on making the game better and easier to play for veteran and new managers.
Speaking of which, we've had a major September improvement in onboarding paying new managers. In August, 36 of 1,085 new managers became paying managers - 3.3%. In September it was 138 of 1,158 - 11.9%. That's more than 3.5x better conversion in a single month.
Next: Sport.fun Forever
In the very near future I'll share a what's next post called Sport.fun Forever: our ambition to make this a game with reasons to play and be rewarded all year. I think we've already tackled one big part of this well: your squad carries over. When this season started, you weren't scrambling to rebuy everything all over again like in most games.
Next is making this fun and valuable all year round and a market game is perhaps uniquely positioned to offer exciting off-season play. I see off-season as a great recruitment window for new managers precisely because other games go quiet. I will also cover some other exciting updates to the game including often requested UX features and a very cool interactive tutorial experience to help your friends get onboard.
To the loyal managers building this experiment with us: thank you. You're the early adopters of something unique that I believe can become one of the biggest games in sport. That's the opportunity in front of us.
Thank you, as always, for your attention to this matter.