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Why The NBA needs esports

The NBA’s meteoric rise into the esports space is both familiar and unfamiliar territory. With the NBA’s growing presence in the esports market, there was a window of opportunity to create with the NBA brand. Instead of investing in teams that play other games, why not invest in their own teams that will expand the NBA market with a video game series that has been around since 1999?

On February 2017, the NBA and Take-Two Interactive made the NBA 2K League. Based on the NBA 2K series, the NBA wanted to take 5 on 5 basketball on a competitive, virtual level. As many as 17 of the NBA’s own teams will participate its inaugural season starting in 2018. The NBA is the first traditional sports company to invest into their own esports league, breaking boundaries of traditional sports and esports.

Esports by the numbers

Esports revenue growth through the years. Courtesy of Newzoo.

Esports is one of the fastest growing industries in the world. Newzoo predicts “esports revenues will reach $696 million this year and grow to $1.5 billion by 2020 as brand investment doubles.” A handful of NBA teams took notice and began buying into esports teams. For example, Washington Wizards owner Ted Leonsis, Golden State Warriors owner Peter Guber and Magic Johnson were part of an investment group to purchase a controlling interest in Team Liquid.

There are many footprints between players displaying interest and investing into the esports space as well. The trend had started as early as 2015. Most noteworthy are Rick Fox, with Echo Fox, as well as Lakers teammate Shaquille O’Neal, with NRG. More players will continue to tell each other to become involved because of the numbers and how new it is.

Marketing to a young demographic

We haven’t seen a traditional sports league acknowledge esports the way the NBA has. Esports is a young industry and video games are a part of today’s culture. Millennials followed by Generation Z are the primary demographic of esports. Marketing for this demographic is changing every day as technology improves and the way we interact with it. Guber talks about the global audience of esports and why it’ll continually be on the rise, below.

According to Neilsen’s 2014 Year in Sports Media Report, 43% of the NBA’s audience is under 35 years old. The NBA has one of the youngest audiences in major sports. Marketing to Millennials and Generation Z is different than through traditional outlets. Data consumed on the internet has created different areas to market by target marketing through heavy traffic websites such as YouTube and Twitch, or through social media such as Instagram and Twitter, to gain that reach.

Future of sports

“The large part of my mission is to grow the game of basketball,” said Adam Silver, Commissioner of the NBA, when announcing the NBA 2K League. Silver and team owners took the opportunity on creating an esports league in order to capitalize on their young audience. Expanding their global audience promotes viewership. In large part, introducing two different markets together would help the fan base of both basketball and esports.

The NBA plans to evolve and innovate with its future in mind by using esports as a vehicle to create a new way to watch sports and interact with their fans. Traditional sports broadcast has remained the same since the beginning. In an interview by Recode, Silver commented on how “ESPN for example, it’s the same way it looked 30 years ago.” He used Twitch as an example where we “see what it’s like to follow those competitions, it’s sort of constant chatter of fan there’s all kinds of other information appearing on the screen.” Silver has taken inspiration from the growth of esports and wants to help two vastly different industries, with the spirit of competition, come together.

 

Watch Recode’s interview with Adam Silver:

 

Featured image courtesy of Engadget.

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