PeterWarman

/in/warman

PJWarman

PETER WARMAN
CEO, NEWZOO

SHAPING THE YEARS TO COME

FEBRUARY 12TH 2019

 HOURS
WATCHED

42M
IN FIRST SIX
DAYS

© Newzoo 2018 2
Back in 1983

TIME

© Newzoo 2018 3
 Back in 1987

MONEY TIME

© Newzoo 2018 4
 And leads innovation in engagement and business across all markets

MONEY $135Bn #1 TIME

Equal to the global Probably the world’s
sports industry most favorite pastime

+$100Bn 2.5Bn+
In only 11 years, +$35Bn People that play or view
in the 30 years before games across the globe

© Newzoo 2018 5
 1

The consequence of success

6
Big changes send waves to the West

© Newzoo 2018 7
In Shanghai, Chengdu and Shenzhen

© Newzoo 2018 8
VSPN center in Chengdu

© Newzoo 2018 9
And watch the CEO cope

© Newzoo 2018 10
Pressure on competitive gaming and monetization but support for offline esports activities

ONLINE. PRESSURE ON GAMES OFFLINE. ROOM FOR ESPORTS

© Newzoo 2018 11
And will have the facilities to match
Hangzhou By 2022, Hangzhou aims to
invest over $2 billion into
Population: 10M developing the city’s esports
activities. The city will host the
2022 Asian Games.
LGD Gaming built its own
esports venue in the city, which
will serve as the home venue for
its LPL matches.
Other projects include an esports
academy, esports-themed hotel,
theme park, business center, and
even a hospital designed for
#10 esports players.
Largest Chinese city by
urban area inhabitants
© Newzoo 2018
Chongqing To boost local esports activity,
Chongqing singed a deal with
Population: 15M Alisports, resulting in Alisports
relocating its business unit to the
city.
The sports affiliate of Alibaba Group
will also work with Chongqing High-
Tech Zone to build an international
esports street in Jiulongpo District.
Alisports will also organize large-
scale sports events and networking
sessions to boost collaborations
between foreign and domestic
#5 companies in the city’s sports
industry.
Largest Chinese city by
urban area inhabitants
SOURCE: NEWZOO GLOBAL ESPORTS MARKET REPORT
Shanghai Shanghai recently held a signing
session with multiple companies
Population: 25M active in esports to put the city on
the path to becoming a world esports
center.
As a result, Tencent Games’ Honor of
Kings Winter Champion Cup took
place in Shanghai, and The
International 9 will happen there in
2019. Also, esports athletes can
register with the city to receive
benefits, and NetEase and Shanghai’s
government reached an agreement to
move NetEase’s esports facilities to
#1 the city. PandaTV and ShihouTV
signed similar agreements.
Largest Chinese city by
urban area inhabitants
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No location stays untouched by esports, new locations are announced daily

© Newzoo 2018 SOURCE: NEWZOO GLOBAL ESPORTS MARKET REPORT 13

As growth in home market is uncertain
$230M
Spent by AliPay to be the preferred
payment partner of the UEFA for 8
years, including the Nations League
and two upcoming Euro
Championships.
© Newzoo 2018
$150M
Invested by Tencent into social
platform Reddit as part of a
$300M round of investment as
Tencent seeks accelerated
growth overseas.
14
 2

More than vice versa

15
What audience fits our brand best and where are opportunities left?

Finance &
Apparel Payment Food & Gaming
& Retail Hardware Peripheral Automotive Telecom Provider Beverage Furniture Music Oil & Gas Electronics Cosmetics Social Media

© Newzoo 2018 SOURCE: NEWZOO GLOBAL ESPORTS MARKET REPORT 16

 Following sports too much

MONEY TIME

© Newzoo 2018
 NEW PLAYERS IN SPORTS
More like gaming

INDIRECT

RESEARCH

SPORTS B2B REVENUES

Media Rights
Sponsorship
Advertising

ESPORTS

GAMING B2C REVENUES

Micro Payments
DIRECT Additional Content
Subscriptions
ANALYTICS

© Newzoo 2018 SOURCE: NEWZOO GLOBAL ESPORTS MARKET REPORT

 STREAM MONETIZATION
More like gaming

INDIRECT

RESEARCH

SPORTS B2B REVENUES

Media Rights
Sponsorship
Advertising

ESPORTS

GAMING B2C REVENUES

Micro Payments
DIRECT Additional Content
Subscriptions
ANALYTICS

© Newzoo 2018 SOURCE: NEWZOO GLOBAL ESPORTS MARKET REPORT

The market wants to know: what is the bottom-line impact of my esports campaigns (per game)?

$3.8Bn
In revenues generated by
gaming peripherals in 2018.
Keyboards, mice, headsets
alone….. +$1Bn in a single year
because of Battle Royale.

© Newzoo 2018 SOURCE: NEWZOO PC GAMING PERIPHERAL TRACKER (BETA) 20

The market wants to know: what is the bottom-line impact of my esports campaigns (per game)?

© Newzoo 2018 SOURCE: NEWZOO PC GAMING PERIPHERAL TRACKER (BETA) 21

The market wants to know: what is the bottom-line impact of my esports campaigns (per game)?

OTHER GAMES

OTHER GAMES

© Newzoo 2018 SOURCE: NEWZOO PC GAMING PERIPHERAL TRACKER (BETA) 22

 Game enthusiasts are are fragmented in the way they enjoy gaming and what they spend on

Newzoo’s Game Enthusiast

Segmentation “TETRIS”
PLAYING
Just like the iconic game, the aim of
this segmentation is to make all pieces VIEWING
fit together, helping our clients’
strategic decisions and marketing effort OWNING
line up with the market needs. Available
standard in our Consumer Insights Three main axes: playing, viewing, owning
dashboard. Four categories per axes, Three variables per category

NL VN NL PH BE CN RU CN JP IND NL CN BE VN VN CA VN JP
1% 4% 12% 3% 13% 26% 2% 5% 14% 2% 5% 9% 2% 5% 13% 2% 4% 6% 8% 16% 29% 6% 21% 31% 6% 28% 49%

© Newzoo 2018 SOURCE: NEWZOO CONSUMER INSIGHTS | GLOBAL GAMERS PANEL 23

Newzoo’s Global Gamers Panel gives direct access to 2.1 million gamers across the world

28 FOCUS COUNTRIES CORE VARIABLES

AMERICAS
DEMOGRAPHICS
EMEA
TIME SPENT
PLATFORM

2.1M
Game enthusiasts in
APAC
GENRE
MONEY SPENT
ETC.
Newzoo’s Global Gamers
Panel profiled on game, CONTINUOUS
viewing, buying behavior and DEEP
prefrences PROFILING
MEDIA/BRANDS/BUYING PERSONA SEGMENTATION

BUYING BEHAVIOR VIEWING

GENERAL INTERESTS STREAMING
SPORTS VIEWERSHIP GAMING
SPORTS ATENDANCE OWNING
DIGITAL MEDIA COMMUNITY
SUBSCRIPTIONS SUBSCRIPTIONS
BRAND AFFINITY DONATIONS
ETC. ETC.

© Newzoo 2018 SOURCE: CONSUMER INSIGHTS | GLOBAL GAMERS PANEL 24

 3

For all live entertainment content

25
And viewers will choose who they want to comment on the matches

NA FORTNITE SUMMER SKIRMISH NINJA

WEEK 2

832K

52%
The amount of viewing hours 436K
generated by Ninja was over
half that of the official
256K
channel
107K
65K
#1
34K Fortnite streamer
on Twitch in 2018
Fortnite Ninja TSM_Myth

Viewing Hours 231M

Live hours watched
Average Concurrent Viewers
on Twitch in 2018

© Newzoo 2018 SOURCE: NEWZOO GLOBAL ESPORTS MARKET REPORT 26

 The market wants to know: how loyal are viewers of a specific streamer?

29.1%
Of Shroud viewers only
watches Shroud on Twitch
(on a certain day)

shroud

© Newzoo 2018 SOURCE: NEWZOO GAME STREAMING TRACKER 27

 4

For all live entertainment content

28
Battle Royale studios pop up all over the world

PUBG Global Invitational

>600M
Hours were spent watching
uploaded Fortnite videos on
Youtube, Instgram and
Facebook in 3 months time:
September to November
2018. More than live on
Twitch and Youtube Gaming

© Newzoo 2018 SOURCE: NEWZOO GLOBAL ESPORTS MARKET REPORT 29

The quest for new entertainment formats

MARSHMELLOW IN FORTNITE NINJA ON TIMES SQUARE

10M Reportedly, 10 million people watched Marshmellow

perform a concert within Fortnite 250K Sponsored by RedBull, Ninja streamed from Times Square
on NYE. He had a peak of 250K concurrent viewers.

© Newzoo 2018 SOURCE: NEWZOO GLOBAL ESPORTS MARKET REPORT

 5

For the loyalty of fans

31
 Among publishers, games, leagues, players, teams, organizers and more….

BRAND AFFINITY OF FANS

PUBLISHER
NOW
FUTURE?

TEAM GAME

PLAYER

© Newzoo 2018 SOURCE: NEWZOO GLOBAL ESPORTS MARKET REPORT

Growing their personal fanbase
Nike featured Jian “Uzi” Zihao.
Uzi in a recent marketing
campaign. Zihao is commonly
described as the world’s best
League of Legends player and
was featured in NIKE’s “Dribble &”
campaign, alongside basketball
superstar Lebron James.
The campaign that featured Uzi
was mostly used in China, the
player’s home country. It also
marked Nike’s first major esports
inclusion.
© Newzoo 2018
In Russia, Head & Shoulders
used esports athletes in one of
its latest campaigns, aiming to
appeal to the market’s esports
fanbase. The shampoo brand
assigned the Virtus.pro Dota 2
star Roman "RAMZES666"
Kushnarev as its ambassador in
Russia. At only 19 years of age,
RAMZES666 is now one of the
brand’s main figures among CIS’
young demographics.
SOURCE: NEWZOO GLOBAL ESPORTS MARKET REPORT
Gillette is another Proctor &
Gamble-owned brand that used a
Russian esports player in a
campaign. “Solo”, RAMZES666’s
Virtus.pro teammate was featured
in one of the company’s Russian
digital marketing campaigns. With
this appearance, the player joins
a roster of athletes including
Roger Federer, Tiger Woods, and
Neymar Jr.
33
 5

Esports is just the eye opener

34
To gaming as a whole……

© Newzoo 2018
 And finding new ways to connect both…

MONEY TIME

© Newzoo 2018 36
 Such as in-game economies serving free riders, dedicated players and big spenders

MONEY TIME
HARD CURRENCY SOFT CURRENCY

MONEY TIME

© Newzoo 2018 37
 Of how markets and business can or will operate….

MONEY TIME
HARD CURRENCY SOFT CURRENCY SMART SOFT LINKS
▪ KEY MECHANICS
▪ NO PAY TO WIN
▪ NO FARMING

MONEY TIME

SOFT CURRENCY

LOYALTY PROGRAMS Learnings from game mechanics “TIME” CURRENCY

BANKS AND CORPORATES BLOCKCHAIN
HARD CURRENCY

CASH/DIGITAL More power to the people “MONEY” CURRENCY

© Newzoo 2018 38
 And boost your direct-to-consumer business along the way…

MONEY TIME
MONEY TIME

© Newzoo 2018 39
MONEY TIME
MONEY TIME

peter@newzoo.com

© Newzoo 2018
OUT TODAY HAVE FUN AT
 PeterWarman

/in/warman

PJWarman

PETER WARMAN
CEO, NEWZOO

OUT TODAY SHAPING THE YEARS TO COME

FEBRUARY 12TH 2019