E-Sports in China: Potential Growth and Possibilities

E-Sports is a form of competition based on video games from consoles, PC or any other electronic devices which players, individually or in a team compete among each other for a winning prize. There have been reports of an increasing amount of investors looking to invest in E-Sports with an increased focus on content and media rights. All major publishers have increased their investment into the convergence of video, live events and the game itself to offer consumers with a cross-screen entertainment that is desired by the users from their favorite franchises.

E-Sports in China: the largest global market for Gaming

e-sports in ChinaIn China, a huge population sees gaming as a sport, the salaries of top gamers are as high as their viewing figures. Sponsorship deals are also lucrative with teams being sponsored by different industry such as energy drink, computer hardware, software, and apparel. Although the E-Sports in China has a huge audience and large prize pool, somehow it does not have the social acceptance enjoyed by traditional sports. This is because gaming is still seen as a bad habit and a waste of time. Nonetheless , with a generation in their twenties that spent their entire lives playing computer games will be the driving force in this industry over the next decade. While traditional sport is still being watched by millions of all ages around the world, E-Sports in China is dominantly viewed by relatively affluent 18-35 years old which is a highly desirable demographic for advertisers. However, E-Sports users do not only enjoy playing but they do enjoy watching E-Sports as well, some users may not even play E-Sports but are willing to watch due to the ornamental and entertaining features of the game. With the establishment of sports system and the rise of professional teams in the Chinese market, more mega tournaments will be held for professional players to compete.

E-Sports: a big marketing opportunity

Additionally, online advertisement is the fastest growing revenue segment with up to 99.6% on a global scale compared to 2014. The E-Sports Audience boasts a very valuable demographic, moving towards consumers with full-time jobs and relatively high income. With the global gaming market revenue increasing by 67.4% that is USD $325 million in 2015. It is expected in 2019, the global E-Sports revenue growth would grow up to USD $1072 million. Currently, U.S is leading in terms of revenue generated from E-Sports with USD $175 million (38%) through merchandises, event tickets, sponsorships, online advertisement and media rights. Adding to that, China and South Korea together represents 23% of global E-Sports revenues which totals USD $106 million in 2016. However, Asia leads the global E-Sports industry in terms of audience growth with 44% in comparison to 19% and 25% for North America and Europe respectively. The global E-Sports Audience was 226 million gamers with the number of E-Sports Enthusiast reaching up to 115million in 2015 with a year-on-year (YoY) growth of 27.7%. For an example the current prize pool of USD $20,770,460 for The International Dota 2 Championship in 2016, the winnings of this tournament can be compared to baseball’s World Series, American Football’s Super bowl, golf’s Fed Ex Cup, and Soccer’s Europa League. However, most people have not heard of The International Dota 2 Championship as it is an electronic sport (E-Sports) tournament. The money from these tournaments is crowd-sourced with a huge fan base buying interactive “compendium” that gives detailed information about the tournament, behind the scene access, contents, and legendary items for in-game purposes. With that in mind, the huge audience for games and E-Sports will prove to be a huge potential for the companies to promote in the E-Sports world. Producers of computer games, software companies, hardware and peripheral devices are sponsoring millions for advertisement opportunities. With that in mind, brands are paying millions of dollars to rename stadiums and put their logos on the shirts of teams.

Daxue Consulting’s analysis and recommendation

Experts at Daxue Consulting conclude with the continuation of growth in the number of gamers and E-Sports fans, this provides an opportunity for investors or organizations to take advantage off. It is very important for companies to understand the massive potential of the E-Sports industry. Mass-market brands are taking notice at all angles, from gaming preferences to spending habits to hobbies, these companies have recognized the power, influence, and loyalty plays towards its fans. Presently, there are even University courses that offer education in E-Sports that teaches the technicality of the games. An example of Universities that offer this course would be Miami University, Ohio College, University of Nevada, New York University and the list goes on. With a huge capital being funded on E-Sports competition, the potential of this industry is endless.

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