Take Two Interactive Software (TTWO - Free Report) is expanding its footprint in the burgeoning esports space through the recently announced NBA 2K20 Global Championship.
The video-game giant’s publishing label 2K has partnered with the National Basketball Association (NBA), National Basketball Players Association (NBPA) and ESL to launch the competitive tournament that offers more than $100K in prizes.
From October 2019 to February 2020, players will compete in local online qualifiers in the Americas, Europe and Asia-Pacific regions. The qualifiers will lead to online playoffs and then to the regional finals.
Regional finals are set to be held as live events at the ESL studios in Los Angeles, Paris and Sydney. Each winner will receive $15,000 and other prizes from the NBA and 2K.
The final battle for the championship will be fought between eight finalists. The ESL studio in Los Angeles will host the final on Feb 22, 2020.
Esports’ Space Growing Rapidly
Per Newzoo, global esports revenues are expected to increase 26.7% to $1.1 billion in 2019. By 2022, the esports market will be worth $1.8 billion. Moreover, average revenue per fan is expected to grow to $6.02 by 2022.
According to emarketer, which cited a Goldman Sachs report, total esports revenues are expected to reach $2.96 billion by 2022 from $869 million in 2018.
Moreover, emarketer projects esports viewer-base to see a CAGR of 52.5% to 46.2 million by 2023 from 2019.
The strong prospects open up significant growth opportunities for video-game developers like Take Two, Activision Blizzard (ATVI - Free Report) and Electronic Arts (EA - Free Report) .
Notably, Activision currently enjoys a dominant position in this field, owing to its massively successful Overwatch league. The company’s upcoming Call of Duty esports league is expected to further strengthen its footprint in this space.
Chinese video game giant, Tencent (TCEHY - Free Report) , is another well-established name in the esports space, courtesy of its League of Legends.
However, Take Two has been cautious in its approach in the esports space. Notably, the company has been conducting NBA 2K League esports tournament for the last two years. Per CNBC, the league saw 21 teams competing in 2019, up from the original 17 NBA franchise-owned teams in the inaugural session.
Take Two’s Solid Content Portfolio to Boost Top Line
The upcoming NBA 2K20 Global Championship will surely boost Take Two’s competitive prowess in the esports space.
Moreover, the company’s strong slate of releases, which includes Borderlands 3, Ancestors: The Humankind Odyssey and The Outer Worlds, is a key catalyst.
The company recently launched Borderlands 3 on PlayStation 4, Xbox One and PC via Epic Games Store. Additionally, Ancestors: The Humankind Odyssey launched for PC through Epic Games Store will be available on PlayStation 4 and across Xbox One devices in December 2019.
Moreover, The Outer Worlds, scheduled for launch on Oct 25, is expected to be one of the largest contributors to the company’s second-quarter fiscal 2020 net bookings, projected between $860 million and $910 million. Take Two expects GAAP net revenues between $855 million and $905 million for the said quarter.
Currently, Take Two Interactive has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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