This article first appeared in Digital Edge, The Edge Malaysia Weekly on May 22, 2023 - May 28, 2023

As the Premier League (PL) season draws to an end, football fans are waiting to see who will lift the coveted trophy. While the teams are fighting it out on the field, fans have taken to showcasing their strategic prowess in video games such as the Fifa football simulation series, which is played on the PlayStation and developed by Sony Interactive Entertainment. Another game played on mobile devices is Fantasy Premier League (FPL), where you are tasked with managing a team of players and score points based on their performance during the football matches they play in.

Wanting to give Malaysian football enthusiasts — rated the seventh most fanatic fans in Asia in the Nielsen World Football Report 2022 — a virtual community of their own, local tech start-up Playpal Global Sdn Bhd conceptualised FantasyXchange in 2020.

Spearheaded by CEO Irina Ais, the home-grown fantasy sports (FS) platform will be officially launched in August at the beginning of the 32nd season of the PL after a year-long open beta testing. Ais claims it is  the first in the world to incorporate trading cards, virtual football management gameplay in the realm of FS and a live transfer market, all in a single programme.

The population of Malaysia and the wider Southeast Asia, despite being football mad for decades, has not been a sought-after market for FS, which have been gaining momentum since 1995 when ESPN launched an entirely internet-based fantasy baseball game.

It was this observation that led Ais and her team to explore the digital gaming opportunity — one that could set Playpal Global on the path to becoming the first unicorn in the Southeast Asian FS industry within five years, if all goes as planned.

“Southeast Asia has a 700 million-strong population who are passionate about football. Moreover, 32% of the global PL viewership is from Asia. In Malaysia, there are more than 13 million football fans. But all these years, there hasn’t been a proper local product for them,” Ais observes.

“The football games that are available are mostly from the UK. And now the Middle East is also very aggressive in coming up with localised sports products for their market. In India, fantasy cricket is huge.

“There are no local FS offerings despite badminton and Formula 1 being widely popular. Some 92% of the existing fantasy football users play on platforms that are based on the PL. Malaysia ranks third in the most number of FPL players in the world,” she adds.

FS are, in essence, digital sports engagement platforms. The games are based entirely on real-life sports matches, where users build virtual teams with proxies of real players participating in an upcoming match — or match day — and compete on real-world statistical performances of these players, based on one complete officially sanctioned sports match, explains Deloitte in its Fantasy Sports: Creating a Virtuous Cycle of Sports Development report, in collaboration with the Federation of Indian Fantasy Sports, released in February last year.

Some of the most renowned fantasy games other than football are cricket, basketball, golf and Formula 1.

The global FS market was valued at US$21.39 billion in 2021 and is expected to reach US$44.07 billion, with an estimated compound annual growth rate (CAGR) of 12.92%, between 2022 and 2027, according to Hyderabad-based Mordor Intelligence.

The global growth of the industry is mainly driven by consumers in Asia-Pacific, says Ais. The region is forecast to register a CAGR of 18.3%, outpacing the growth of North America at 10.7% and the global average of 12.92%. She adds: “However, North America remains the biggest FS market in the world, commanding 41% of the global market [share].”

The steady development of the segment has much to do with the increasing popularity of professional players, the emergence of sports leagues, growing investment in digital and internet infrastructure and the launch of FS applications as a means to connect users with their favourite sports, says the market research firm.

“In the case of football fans, they are really passionate about strategies and that’s all they talk, discuss or argue about when they get together,” says Ais, adding that FS are an extension of that real-life sporting event, extending the reach and deeper appreciation of a sport.

Building an FS platform wasn’t quite what Ais had set out to do when she began her entrepreneurial journey in 2020.

The 36-year-old Penangite, whose expertise lies in payments and transaction solutions — the sector she worked in for more than 14 years in various capacities — was developing a fintech solution for airlines and hotels under Paytech Asia Sdn Bhd when the Covid-19 pandemic hit, bringing the travel and tourism industry to a standstill.

“We were in the middle of designing and testing the product which, at that point, we had been working on for two years. All of a sudden, the Movement Control Order was enforced and we could not proceed.

“That was when the nephew of one of my company’s (Paytech’s) partners proposed FS. The nephew, Dileep Kumar, was then reading law in the UK and had noticed that there were many products for sports fans to consume, and shared the idea with his uncle, who then shared it with me and I started researching the market, legalities and licensing issues.

“I had to study all this for quite a while. It took me a good six months to figure out the legal implications, if the game model would suit our laws and regulations in Malaysia and also make sure that it did not involve gambling. After getting a legal opinion that it’s within the law and FS do not fall under gambling or wagering, I realised that it could be done and that it is probably something that the Malaysian fans would like,” shares Ais.

With the due diligence and market viability groundwork done, Ais pivoted the business with the support of Paytech’s founding members — Antah Healthcare Group executive chairman and managing director Tunku Laksamana Negeri Sembilan Tunku Naquiyuddin Tuanku Ja’afar, and investment holding firm Lambang Ekuiti Sdn Bhd founder Marcus Francis — and Dileep to form Playpal Global as a subsidiary.

“Everybody always talked about how they were too busy to look into hobbies and opportunities [before the pandemic], and since we had the time [following the stringent physical distancing requirements], we wanted to do something [instead of languishing],” says Ais.

“We started looking into the football market, and we saw how far ahead people in the US, UK and other countries were in coming up with football games and platforms. We realised that we don’t have a lot of products catering for Malaysians, or Southeast Asians, for that matter.

“Malaysians love and are passionate about football. We decided to go into what football fans love. They love having a community and discussing the strategy of football.”

Ais engaged local game developers to build the FS platform but the initial attempt failed due to inexperience. The start-up then reached out to developers in India, whose FS industry is now the largest in the world with over 130 million registered users.

Finding the requisite talents to build the platform locally was the greatest challenge Playpal Global faced, she adds.

“We sorted out the commercial agreement required to use the live football data — which is from Stat’s Perform’s OPTA Data, the official Fifa World Cup and Premier League data partner — that comes in codes and is fed into FantasyXchange. 

“We have exclusivity with them for Malaysia and first rights of refusal for the rest of Southeast Asia. This prevents competition from anyone trying to do the same type of game model. So, that was quite a big achievement because nobody had ever gone to them for exclusivity before and we managed to convince them.

“The toughest part in this entire journey has been finding the right local talents. It’s not that we don’t have talented people, just that this industry has not taken off here just yet. It was very hard to fill the gap and we had to rely on those from overseas.

“Which is why I hope that once we go full steam ahead and the local FS [industry] becomes more mainstream, we have an avenue to develop local talents,” says Ais.

To ensure that no legal lines are crossed, Playpal Global engaged the Malaysia Digital Economy Corporation (MDEC) to scrutinise FantasyXchange’s game model to pinpoint if any aspect of it would fall into a grey area. The goal is to establish FantasyXchange as a game of strategy and skill, and not of chance and luck, stresses Ais.

In August last year — after a year of thorough examination to ensure the game is free of bugs, glitches and other errors — the beta version of the FantasyXchange platform was released at the start of the PL and has since organically amassed over 2,000 local users.

Given the nascent expansion of FS in Southeast Asia, the creators of FantasyXchange hope that the platform’s Malaysia launch will serve as a stepping stone for further developing Playpal Global’s FS ecosystem to include creator content, commerce to enable users to buy official merchandise, competitions, a talent academy and a fintech arm to support the FS platform. Eventually, the plan is to expand regionally as well as into different sports, including cricket, rugby and basketball.

Playpal Global is already gearing up to export FantasyXchange to Indonesia, which has an equally vibrant fantasy football culture and intense rivalries with over 10 million users. Thailand and Vietnam are the next biggest markets with a tremendous following of European leagues and PL.

“We are working with MDEC’s digital exports department to identify the kinds of registration and licences we would need to enter Indonesia. They’re helping us bridge that gap,” Ais shares.

The start-up has already started its fundraising exercise to raise the capital it needs to put its many plans into action. According to Ais, the team is in talks with angel investors, venture capitalists and private equity firms to raise S$3 million (RM10 million). 

The funds will be used for game platform enhancements, to expand user engagement and commercialisation streams,  for regional registrations such as regulatory, legal and licences as well as local and regional expansion until the end of 2024.

Malaysia is FantasyXchange’s entry market for Playpal Global’s football offering. A unique integration into FantasyXchange is the use of trading cards, which differentiates the platform from its global rival FPL.

Another difference is the scoring matrix. In FPL, players win points based on goals and assists, while their performance is neglected. With FantasyXchange, this is rectified with players receiving points based on the Opta Player Rating.

And then there is the selection of players. Users are not limited to three players per team, like in the FPL. In FantasyXchange, there is no limit to the number of players that can be selected from any one team. For example, a Liverpool FC fan can select a team composed exclusively of Liverpool players.

FantasyXchange offers a season-long league that lasts for the entirety of the 38 game weeks of the PL football season, where users compete seasonally for their chance at winning the grand prize at the end of the season.

The platform also provides users with the chance to build their strongest fantasy football team and compete with each other through its all-new weekly leagues, offering users the chance to win weekly cash and prizes based on their FS skills.

Gamers are given a draft pack of 35 random players in the form of cards upon registration. From the initial 35 players, gamers can build their team to begin competing in the season-long showcase team or the weekly leagues. More players can be acquired through a daily reward pack or purchased in the in-game store.

The players who are used in the game are those from the PL. Users can pick the likes of Harry Kane, Raheem Sterling or Erling Haaland for their weekly selection. FantasyXchange works with Opta Sports to use the players’ likeness for the game. Moreover, Opta provides accurate and real-time data of the PL.

In FantasyXchange, users can play the game as a marathon, a sprint or both. Marathon is when users play from the beginning of the season and strategise weekly by making the right choice of players until the end of the season. The accumulation of points would be an indicator of how well the user has performed.

Sprint is played weekly. Weekly leagues are broken down into 30-team mini-leagues, where 30 participating entries are grouped and compete against each other. Each weekly league requires a minimum of 25 teams to qualify.

Once a mini-league has 30 teams, a second mini-league with another 30 teams would be initiated for participation. “This is to ensure that there is no competitive bias or disadvantages,” states the FAQ on the FantasyXchange platform.

The weekly leagues will run on a one-in-30-entry win basis, and the platform may occasionally hold seasonal or promotional multiple-winner weekly leagues. Winners will be announced after every game week.

The Season Long League will last from the start to the end of the season, just like traditional fantasy football leagues where users compete against all participants for the Season Long League grand prizes.

“We have the Season Long League, which is free to play and you can win cash prizes; we have a weekly community league that is also free to play where you can win in-game prizes in the form of card packs; and we also have leagues that allow you to win cash on a weekly basis,” says Ais.

All in-game purchases will be made using the FantasyXchange in-game currency, FXCoins, which can be purchased from the in-game shop using real money. All payments within the FantasyXchange platform are facilitated using Visa, Mastercard, FPX or participating e-wallets.

Prizes include Petronas fuel credits that are deposited into the winner’s Petronas Setel e-wallet, cash prizes that are directly deposited into the winner’s GoPayz e-wallet by UMobile, Guardian and Shopee e-vouchers as well as in-game items such as FXCoins and/or player packs and cash.

“It’s like Candy Crush. When you finish your five daily free lives and want to buy extra lives to play some more, you buy the in-game currency to get more lives. That is our model,” explains Ais.

“We did explore the idea of tokenising this and moving in the direction of blockchain, but did not want to do it just yet because there is some instability regarding the regulations and market. We just saw a very big crash with Luna and Bitcoin. Luna is the native token of the Terra blockchain developed by the South Korean firm Terraform Labs.

“To go in that direction, we must offer strong values and growth. We have that for our game, but in terms of giving a secure plan for customers to buy a token, we are not ready yet.”

Similarly, Ais is careful about setting up FantasyXchange non-fungible tokens to prevent the brand from falling into the fad before the function of NFTs for the game is properly assessed.

Moving forward, FantasyXchange will be introducing an interactive transfer market to bring realistic elements to the game, shares Ais.

With a transfer market in the game, users will be able to sell and purchase players, akin to their real-world counterparts. Another feature would be an insurance module. Like it or not, players often get injured. With insurance, users will be reimbursed in the form of in-game currency for players who are unable to play.

In the fantasy football landscape, the focus will be solely on the game and the players who run it. Ultimately, what matters is that the user selects a team that accrues the most points.

As the late Johan Cruyff, legendary manager and player at Barcelona FC, famously said, “Choose the best player for every position, and you’ll end up not with a strong 11, but with 11 strong ones.”

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