i3 | March 08, 2019

Esports: A New Ecosystem Emerges

Susan Schreiner
People playing video games

Esports has opened a new world of sponsorships, with NBA teams being particularly prominent. NBA Commissioner Adam Silver is a pioneer among traditional sports executives, pursuing the revenue potential of esports and the NBA for the competitive basketball video game, NBA 2K19.

The professional league behind that game, the NBA 2K League, will return for its second season next spring with four new NBA teams attached to the Lakers, Timberwolves, Nets and Hawks. With 21 teams total, the league is aiming to have all 30 NBA franchises on board within a few years. Every NBA 2K League game next season will be streamed on Twitch as part of a new multi-year partnership. NBA 2K is likely a model for other North American professional sports leagues.

NBA, NFL and MLB players and owners are also getting involved in esports. Shaquille O’Neal and Alex Rodriguez invested in NRG Esports. Franchise owners such as Fred Wilpon, Robert Kraft and Stan Kroenke invested in the popular Overwatch League; and Magic Johnson, Ted Leonosis and Peter Guber are investors in the early esports organization, Team Liquid.

Brand sponsorships that tap into esports are ramping up, with more than 600 sponsorship agreements made between 2016-2017. Esports are alluring for brands that want to tap into an engaged and young audience. While fans are mostly millennial males, it is growing more diverse each year, according to Nielsen.

Gaming and technology brand sponsors tell us more about the “tech” allure, since they include companies like: Acer, Asus, Best Buy, CenturyLink, Corsair, Dell, DirecTV, Dolby, IGN, Intel, Logitech, NVIDIA, Razer, Samsung, Seagate and Xfinity. Brand sponsors for consumer-packaged goods include Coke and Pepsi, Snickers, Nestle, General Foods, Red Bull, McDonalds, Taco Bell, Adidas and Gillette — with companies like Visa, FedEx, Geico and Audi falling into the aspirational brand sponsorship category.

In-Game Experiences

Augmented reality (AR) and artificial intelligence (AI) are two of the hottest elements in sports. Computer-generated worlds and 3D and volumetric video, together with data and graphic overlays, are providing sports fans with new immersive experiences. For example, Fan AI is an audience monetization platform that uses AI and machine learning to optimize fan and brand engagement in esports.

Tel Aviv-based software design company Vivala Technologies announced the launch of Hoopit, a mobile game in which users can make real-time predictions for NBA and NCAA games. Users can download the free app and make predictions such as selecting the team that scores next or choosing the player next to score. Hoopit’s algorithms then determine the probability of each eligible prediction and reward users with game coins and in-app rewards.

Predicting the outcome of plays as they happen was the next natural progression in the daily fantasy sports ecosystem. Although Hoopit only offers in-game tokens as prizes, offering real money to players who make successful predictions could evolve as the legalization of sports betting spreads across the U.S. Hoopit is available on the Google Play and Apple App Store.

Sports tech innovation at CES has evolved from gaming to tech that enhances athletic performance and immersive experiences to smart sports arenas. Esports has captivated the imagination and wallets of investors, traditional sports rights holders, major leagues, teams, brands, entertainment and media — and consumers on a global basis.

January/February 2019 i3 Cover Issue

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