The WNBA held its 15th All-Star Game on Saturday June 28th (in Minnesota) and unlike the 2018 MLB (-6% YoY), NBA (-1% YoY) and NHL (-10% YoY) All-Star Games, viewership increased +17% YoY (to 709,000 viewers); making it the league’s 2nd most watched ASG since ’13. The viewership increase for the midsummer game follows the first half of a season that saw the number of viewers tuning in per game rise +35% YoY across ESPN2 & NBATV and +38% YoY (to 247,000) on ESPN. It’s not just increasing television viewership numbers that indicate the league is on an uptick though, merchandise sales on the league’s website are up 50% YoY and Puma recently announced a league-wide footwear partnership with the WNBA; the company’s first deal with a pro sports league. Atlanta Dream forward Angel McCoughtry took notice of all the progress, calling 2018 “the year of the woman.”
Howie Long-Short: While the partnership deal with Puma is significant and the merchandise sales growth has been impressive, WNBA bulls might want to temper their excitement surrounding the ASG. Even with a +17% YoY increase, the 709,000 viewers that tuned in represented just the 9th largest audience in WNBA ASG history.
As for Puma SE (PMMAF), the company reported a +42% YoY increase in profits (to +/- $36 million) on revenues that rose a currency adjusted +15% YoY (to $1.2 billion) during Q2 ’18, as all regions and product segments reported double digit growth. Quarterly financials would have looked best had the euro been stronger, the national teams they sponsor performed better and if they were seeing returns (not just marketing expenditures) on their basketball business. Shares dropped -5.5% on the news and have continued decline since, closing on Friday at $487.00.
Fan Marino: EA Sports (EA) has taken notice of the rising popularity of the WNBA and acted accordingly. The company announced that gamers will have the option to create female players, in career mode, in NBA Live ’19 (launches 9/7) and that female player “abilities and perks” will be modeled after WNBA stars like Candace Parker. The announcement comes just one year after all 12 WNBA teams were included in the game for the first time. This isn’t the first-time EA Sports has included female players in its games, the company’s hockey series first included women in “Be a Pro” mode back in ’11. In that game, females and males competed against each other; all EA Sports UFC and FIFA games since have featured single-sex matches.
Fun Fact: 68% of the WNBA audience on ESPN 2 is male.
Fun Fact 2.0: Just 7% of the WNBA’s audience on ESPN 2/NBA TV is female and under the age of 35.
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EA Sports (EA), the NFL and ESPN have partnered to bring exclusive broadcasts of the Madden ‘18 NFL Ultimate League to the ESPN App and Disney XD; a channel geared towards teen and pre-teen males. The deal is being marketed as ESPN’s first long-term multi-event competitive gaming partnership and the “first U.S. professional league for competitive sports gaming”. The e-sports competition will include 16 gamers (qualified from a circuit of events) competing head-to-head (starts Friday 2/2) for a chance to play for the Madden Bowl title, live from the ’18 NFL draft on ESPN2. ESPN2 will also be the home for a weekly episodic series (beginning in April) focused on the best players (and storylines) within the Ultimate League.
Howie Long-Short: Video game industry sales rose 11% in 2017 (to $14.6 billion), including $6.7 billion on video game software. The best-selling competitive sports game of 2017 was NBA 2K (2nd overall), with Madden NFL ’18 (4th overall) the only other sports game in the Top 10. EA will release their Q4 ’17 and full-year ’17 earnings report following today’s close. Look for growth in digital revenue; the category up 19% in Q3, helping EA set company records for profitability.
Fan Marino: This isn’t your daily “Pro Sports Launches eSports League” announcement; though, I have a few of those as well (MLS launches eMLS Fifa ’18, NHL to debut esports league by end of season). Competitive sports gaming coming to mainstream cable television is another milestone for the burgeoning industry, as is the $500,000 prize pool; the largest in Madden history. What kind of audience can ESPN expect? For reference purposes, the CW received 670,000 viewers for a one-hour Madden primetime special.
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Qualifying tournaments for EA Sports’ (EA) FIFA eWorld Cup 2018 are underway and will run through July ’18, narrowing the field down to 128 participants (64 PS4 (SNE), 64 Xbox One (MSFT)) who will compete in the FIFA ’18 Global Series Playoffs. The tournament will include both players signed to professional teams as well as amateur tournament winners. Those who advance will play in in the FIFA eWorld Cup Grand Final, with the winner of each playoff (PS4, Xbox One) receiving a $35,000 prize.
Howie Long-Short: EA Sports announced fiscal Q2 revenues rose 7.4% YOY on an adjusted basis (to $1.18 billion), reducing the company’s net loss to $22 million (from $38 million in ’16). CEO Andrew Wilson called it a “strong quarter”, writing that “the company benefited from the customer’s response to EA Sports games (Madden NFL, FIFA), and its mobile games”. CFO Blake Jorgensen said that the company had experienced notable growth in its high-margin digital business (+21.7% to $689 million) during the quarter. As of the close on Wednesday, the stock is up more than 45% on the year.
Fan Marino: More of an NBA 2K (TTWO) gamer than a FIFA one? 2K Sports has announced that the latest release of NBA 2K18 features verified users. That means gamers will know if they’re playing against NBA players, celebrities or members of the 2K development team. Fans are going to flip when they realize they’re playing as LeBron, against LeBron.
FIFA and EA announce the first eWorld Cup
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The NBA and Take-Two Interactive (TTWO) will be launching an “NBA2K” esports league in the spring of 2018. Teams representing NBA organizations will be comprised of 5 digital athletes, each competing for contracts and endorsement deals in addition to the league championship. The idea is for the league to mirror the NBA as closely as possible, with players treating the season as a full-time job. 17 teams will compete in the inaugural season, though important details including; how to draft players, the set-up for broadcasting/streaming and the implementation of a salary cap are still to be worked out.
Howie Long-Short: Amazon (AMZN) owned Twitch publishes rankings reflecting esports games with the most viewers, hours watched etc. While “League of Legends” (HKG: 0700) drew 43 million viewers to their final, “NBA2K” drew less than 4,000 over the last week. The game also sits behind both “FIFA” (EA) and “Madden” (EA) in the viewership rankings. This partnership has a long way to go before it becomes a profitable venture.
Fan Marino: A big issue that is often overlooked when discussing a sports game as a viable esport, is that sports games are designed as a simulation. Since the games are meant to reflect real life as closely as possible, some players/teams are better than others. That causes a competitive balance problem. If you fix the stats to create parity, the game no longer provides a realistic simulation of the sport.
The NBA 2K League: What We Know So Far, And Can It Succeed As An Esport?
Electronic Arts (EA) has released the newest edition of their Madden franchise (Madden ’18) and the football simulation game is receiving tremendous reviews. The most recent iteration of the game includes a story mode known as “long shot”, which puts the player in the shoes of a rookie as he embarks on a journey to become an NFL star. EA hopes that focusing on the more personal side of football (sacrifices, stress, celebrity) will increase immersion for players of the game. Other notable changes from Madden ‘17 include an improved graphics engine, updated stats and rosters and new broadcast commentary.
Latest ‘Madden’ video game rolls out some of its biggest changes ever
Howie Long-Short: Take-Two Interactive (TTWO) has the dominant NBA game (2K), so how come they no longer make an NFL version? EA smartly signed an exclusive licensing deal with the NFL and the NFLPA back in 2004. Without player and team names, 2K simply can’t compete.
Fan Marino: It’s remarkable the game has maintained its cultural relevance for over 25 years, but you must remember that 1994-2016 was a period of astronomical growth for the NFL. I believe the popularity of the game is a direct byproduct of the league’s success. Should league interest continue to wane, so too will interest in the Madden franchise.
Electronic Arts (EA) has introduced the Madden NFL Club Championship, a new esports football competition that will enable players to compete on behalf of their favorite team. Through live and online elimination events, winners will qualify to represent each of the 32 NFL franchises in the finals during Super Bowl week in Minneapolis. EA is actively seeking corporate sponsors and broadcast TV partners for the event, while the NFL is funding the competition’s $400,000 prize pool. Registration is now open.
Armchair QBs Compete to Represent NFL Teams in Esports Tourney
Howie Long-Short: EA stock is up 500% over the last 5 years, but it has nothing to do with the success of the Madden or FIFA franchises. The transition from the physical sale of game discs to digital distribution has sent gross margins from 61.4% in 2012 to an expected 72.1% in 2017.
Fan Marino: The big innovation in Madden ’18 is “longshot” story mode, which places a college QB into a reality show with the end goal of making the NFL. Check out the trailer. Certainly looks intriguing enough to get me to buy the game for the 25th year in a row.