Newzoo's Latest Report Shows The Cross-Section Between The NBA And eSports

At MMOs.com we often discuss eSports and whether or not it's an overhyped bubble or the next big thing to shape the entertainment landscape. Thanks to Newzoo's latest report we can make some headway on our own internal debates.

“The huge interest in esports from sports celebrities, clubs, media companies, and brands alike illustrate how games are leading the media and entertainment business towards a new future that has more in common with games than not,” Newzoo noted in an e-mail sent to GamesBeat. “Games bring innovation in tech and consumer business models, and have a unique ability to engage with and actively involve the younger generations. Traditional and digital media and sports companies bring experience in providing advertisers with an effective communication platform. There clearly is a natural, strategic, and commercial fit.”

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Many money-hungry eyes are shooting eSports seductive looks because eSports is the key to that one buzzword demographic pundits and bloggers love to spout: millennials. Yes, the key to a millennial's heart is through eSports.

Men in the United States between the ages of 21 and 35 are as interested in eSports as they are in both baseball and hockey, with 22% of young males in the same age rage reportedly watching eSports. That's nearly 1 in 5, and my own experience in the wild matches up with the figure.

Here's a statistic that defied my intuition. According to Newzoo 40% of the 200 million eSports viewers do not play the games they watch. That's an astounding number, and a revealing one. I speculated that a particular game's eSport could only appeal to people who play but I was wrong.

eSports is following the same trajectory as traditional sports: my grandpa didn't play soccer but he loved watching matches on Telemundo at 3AM.

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And, as mentioned, there are more than 200 million eSports viewers worldwide—which coincides with SuperData Research's estimations from their July 2016 eSports report. According to Newzoo if eSports could tap into their audience the same way the NBA does it could generate $2.5 billion (which is 5 times more than it currently earns). Newzoo expects eSports to earn $1.1 billion by 2019 (also lining up with SuperData's report).

Here's where the data gets interesting.

There's an overlap between the NBA and eSports. The NBA community with large bank accounts has been eyeing the scene for a while: Philadelphia's 76ers are majroity owners of teams Dignitas and Ape; Magic Johnson, Ted Leonsis, and Peter Gruber purchased Team Liquid; Mark Cuban's purchase of betting startup Unikrn.

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So why is the NBA keen on getting involved with eSports? While not explicitly mentioned in the report the one word answer is merchandise.

The NBA knows how to sell merchandise: jerseys, shoes, hats, watches, license plate frames, key chains, fridge magnets, sweaters. And eSports is ripe for merchandising: gaming is predicated on expensive equipment so why not sell computers with a Team Liquid logo branded on the side? Or keyboards that promise to improve your reaction time?

Newzoo's report found that eSports viewers are more likely to engage brands than gamers or the general online population: more likely to look at Nvidia positively, more likely to own an iPhone, more like to use Instagram, more likely to have played Rocket League in the past 3 months. They engage with trends at higher rates than your typical internet consumer.

They're willing to part with cash, which may just reflect their 21 to 35 year old age bracket: largely young professionals with disposable income. So, creating positive brand loyalty could generate sustainable long-term income if its tied to one team or another, in the same way the area where I live is littered with "Go Broncos" bumper stickers.

I highly suggest taking a look at Newzoo's Sports, Brands, & eSports report, as it is free and catalogs one of the most interesting and explosive aspects of the industry.