China's esports sector set to thrive, but industry standardization essential: experts

Updated 2018-03-22 10:59:01

With more capital flowing in and its targeted audience base expanding, the esports industry in China has become more accepted by the market in recent years. Rising as a prospective industry welcomed by youth, esports has formed a complete industrial chain despite the fact that most of its niche markets are still burning money. As such, experts said there are still problems to be tackled, such as industry standardization and guaranteeing esports incorporate mainstream sports values so as to not be perceived as a self-indulgent event.

Wen Wen, a Chinese student living in Italy, sits in front of his computer ready to battle it out in the semifinal of the League of Legends tournament with other Chinese students based in the UK, a contest that unfolds in the online world.

Representing the University of Manchester, team SSM, which Wen stands for, later entered the final held in London on March 4 and defeated a team representing the University of Cambridge, winning themselves the championship title, though this time, Wen could not actually participate.

"I've played single competitions, group games and semifinals online for SSM, but for the final, it was required of me to actually be present at the gaming spot in London, so unfortunately, I could not be there," Wen told the Global Times Tuesday.

As an amateur gamer, Wen knows that there is a huge gap between players like him and professionals, who consider entering video game tournaments a career milestone, like a basketball player stepping onto an NBA court for the first time.

However, supporting Chinese players like Wen is an ever-growing domestic electronic sports, or esports, industry.

Immature but lucrative

The industrial chain in China's esports sector has gradually been linked together within recent years, which has involved the development of content licensing parties such as game developers and operators, a rise in the number of competition participants such as teams and hosts, as well as the emergence of communication channels such as livestreaming platforms.

Esports, as exemplified in the story above, have become extremely popular among Chinese, with capital continuously swarming into the sector.

In fact, the total market capitalization of China's esports sector exceeded 65 billion yuan (.26 billion) in 2017, growth of which was mainly bolstered by the rising popularity of esports smartphone apps, according to an industry report released by consulting firm iResearch Inc in January. And that figure is expected to reach 99 billion yuan by 2019.

Tech giants like Tencent Holdings, NetEase Inc and Alibaba Group Holding are all fiercely competing to make a foray into the hot esports market.

"In fact, most upstream resources in the esports industry have been in the hands of the internet giants and game developers... They are the big winners," Zhang Jiayuan, a partner at Beijing-based Ransenhuizhi Investment Fund Management Co, told the Global Times on Tuesday.

Taking a market share of 47 percent and 28 percent, respectively, in 2017, Tencent and NetEase have now secured leading positions in terms of channels, content and rule setting, media reports said.

Sitting at the top of the gaming hierarchy, esports gather professional video game players who compete in teams to win prize money, with such players usually belonging to large clubs composed of different teams with different preferences and abilities.

Zhu Bo, co-founder of Shanghai-based Seeinfront Capital, the parent company of QGHappy Club, told the Global Times on Tuesday that just a few dozen professional clubs are running esports businesses across the country.

One of QGHappy's teams, dedicated to playing Tencent's hugely popular game Honor of Kings, won three championships in both the spring and fall season finals of King Pro League (KPL), the game's most prestigious competition, as well as the King Champion Cup, in 2017.

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