The Barclays Center is the home of many professional sports teams in New York City like the National Basketball Association (NBA) team Brooklyn Nets and the National Hockey League (NHL) squad New York Islanders, as well as multiple collegiate basketball tournaments. A different form of competition, however, took place in the sports arena this week.
Seventy-four men and one woman became professional gamers after the second season draft of the NBA 2K League, an e-sports competition of the NBA 2k sports franchise sponsored by gaming giant Take-Two. Strauss Zelnick, Take-Two’s CEO, believes that the hype around the second season of the NBA 2k League is positive progress on the e-sports industry.
Zelnick believes that the first season of the NBA 2K League netted positive results, with a lot of fans craving for a second season in April. Zelnick also shares that about 250 million people play esports as entertainment, with half being spectators as well.
Research company Newzoo predicts that e-sports will generate total revenue of $1.1 billion in 2019, making it the first year in history that the industry went over the billion-dollar mark.
The NBA 2K League is already starting to have big companies following its footsteps. Communications giant AT&T is partnering with Intel and Dell to launch their own basketball video game league, which is expanding from the original 17 NBA teams that took the virtual court last season to 21.
The 2019 NBA 2K League draft pool consists of 22 players from different countries apart from the US, showing that the industry is gaining steam in global expansion. The inclusion of Chiquita Evans, an e-sports gamer from Chicago and the first female player of the league, provides a platform for the e-sports industry to share its advocacy regarding diversity and equality.
Zelnick believes that e-sports leagues like the NBA 2K League will be beneficial for the video gaming industry as well. The Take-Two CEO states that the market is growing when people are participating or tuning into the basketball video game, which is currently enjoying a record year. People will desire to buy NBA 2K units because of the e-sports league’s popularity.
Take-Two’s NBA 2K League, however, faces stiff competition in the industry. Activision Blizzard invested in video gaming with its Overwatch League. Other publishers before Take-Two and Blizzard have also been existing and dominating within the industry. The League of Legends event by Tencent-owned Riot Games continues to draw over 100 million viewers in its matches, more than what the 2019 Super Bowl figures in viewers have brought. Epic Games’ Fortnite event also remains a top contender in online viewership, both in competitive and recreational use.
While the League of Legends and Fortnite events are competing the NBA 2K League, Zelnick believes that both e-sports competitions have provided the platform for other online sports leagues to surface. He finds that while the big e-sports competitions are hurting Take-Two’s NBA 2K League, the market is continuing to grow in numbers that will benefit all e-sports events.
The Importance of In-Game Purchases
Despite the rise in e-sports gaming, some analysts have yet to believe in the video gaming industry. Pelham Smithers, an owner of a research firm in London, predicts that revenue will decline because of the shortage of console creations, strict China regulations, and waning player interest in games like Fortnite. The forecasted decline in 2019 may be the first to hit the gaming industry since 1995.
Smithers, however, revealed his predictions before EA released the video game, Apex Legends. The game is starting to take over the gaming world after garnering over 50 million players in one month. Apex Legends follows the wave of battle royale games that are revolutionizing the video game industry. While the game is free to download, Apex Legends gets its revenue from microtransactions and in-game purchases like other games in this segment.
Video game industries are currently exploring more ways to use in-game purchases to their advantage. Zelnick shares that microtransactions in video games are the best ways for users to stay interested in the game while being the measure of its success.
According to Zelnick, microtransactions is user engagement through spending. It allows the industry to earn revenue while receiving data of what its customers want out of the games they play. Zelnick shares that if companies can utilize in-game purchases well, monetization and revenue will follow. Companies will soon gain profit to keep the gaming industry alive.
After prohibiting games for months during a crackdown on gaming firms, the Chinese government eased up on its game approval regulations. In January, China approved over 80 games. Despite the growth of the gaming industry, Take-Two Interactive and Activision Blizzard are struggling as both of their stocks went down during the start of 2019. Electronic Arts, meanwhile, saw its stock rise to about 25 percent after the release of Apex Legends.