Hello esports enthusiasts! Some quick announcements:
New Twitter account! Follow us at @ChinaEsportsBiz
In today's issue have begun embedding links to sources in our text instead of listing them separately. As always, the goal of this newsletter is to provide brief executive summaries of the week's news items, with context, and we encourage you to follow the links for a deeper dive.
For a fun in-depth introduction to China's esports scene by a traditional sports commentator, we recommend this video series (Chinese) from MORE Sports which went behind the scenes with top esports organization QGhappy as they prepared for competition in Honor of Kings [王者荣耀] (h/t Mailman Group)
GLOBAL NEWS
Olympics Warming to Esports?
The IOC released a letter from President Thomas Bach providing guidance to the Olympic Movement in light of the immediate and long-term effects of the global COVID-19 pandemic, including a recommendation to accelerate exploration of opportunities with game publishers. The letter appears to represent a warming attitude towards esports, but does not indicate any change in the IOC's aversion to esports beyond sports simulation games. The distinction is significant, because it puts the core esports titles representing the greatest numbers of esports fans outside the IOC's consideration.
The announcement appeared to seemed to attract more attention in Asia, where the IESF/AESF and the Tencent-backed Global Esports Federation have focused their competing efforts to become the default global governance body for esports, in no small part by highlighting their connections to the Olympic Movement. As we've mentioned before, however, securing the broad cooperation of game publishers will be essential to developing any form of global governance of esports, with or without the IOC's involvement.
LEAGUES AND TOURNAMENTS
LPL and PCS Spring Splits Conclude
The 2020 Spring Splits for the LoL Professional League (LPL) and the Pacific Championship Series (PCS) came to an end this weekend after an historically unusual season with a number of firsts: in the LPL, JD Gaming swept world champions FunPlus Phoenix in the semi-finals and went on to take its first championship with a 3-2 victory over Top Esports, despite the latter's late season addition of top bot laner Yu Wen-bo (ID: "JackeyLove") via free agency. The event, which streamed on Bilibili, saw a 173% increase in viewership over the same period in 2019.
Meanwhile, Hong Kong-based Talon Esports won the first Spring Split in the new PCS (which covers Hong Kong, Taiwan and Southeast Asia), beating Machi Esports 3-2. Notably, this was Talon's first foray into LoL, which we discussed with Talon's COO Daniel Wong back in Vol 3.9.
Congratulations to all on a historic Spring Split!
The International is Delayed as Dota2 Regionalizes
2020 continues to disrupt Dota2 esports, as the move to online competition forces tough adjustments on a region by region basis. The International, which organizers hoped would exceed last year's record-setting prize pool of $34M, has now been delayed indefinitely due to "the highly volatile landscape for local gathering restrictions, virus trajectory, and global travel policies." Some organizations have disbanded their Dota2 teams, including Cloud 9, Chaos, Furia, and Gambit, while others have been forced to make roster changes to keep teams within a single region for effective competition. Despite these changes, fan interest in Dota2 does not appear to have waned, with the ESL One Los Angeles Major recording a significant increase in viewership despite its switch to online competition and peak viewership of 506,000.
China's Dota2 scene has adjusted relatively well to the regional realignment of Dota2 play, with the establishment of the DPL-CA China Dota2 Professional League [DPL-CDA 中国Dota2职业联盟], as reported in Vol 3.14, which has now expanded into a two-tier system via the 12-team Dota2 Secondary Professional League (DSPL) [DSPL中国DOTA2次级联赛]. Ironically, at one point in February, China's Dota2 teams were the only esports organizations significantly impacted by COVID-19, because they were banned from traveling directly to the United States for the (since canceled) ESL One Los Angeles Major.
OWL Resets and Launches May Tournament
No major esports league has seen as much continuous disruption from the pandemic as the Overwatch League (OWL), which as the now-canceled season began had just restructured the league into a global homestand system spanning Asia, North America, and Europe. Now OWL has regrouped and launched a May Tournament that will divide the league into two simultaneous online tournaments with regular weekend play and a 3-day final. To minimize latency and maintain competitive integrity, teams will be grouped by actual geographical location, with the Asia tournament comprised of teams from Guangzhou, Shanghai, Chengdu, Hangzhou, and Seoul, as well as New York and London, both of which have temporarly relocated to South Korea. This is OWL's chance to regain control of the narrative about the league, which has run negative over the last month, and was punctuated by last year's MVP Jay Won (ID: Sinatraa) leaving the league entirely to join the Sentinels' Valorant team last week.
LOCAL NEWS
Putuo Announces New Esports Center
Officials from Putuo District, Shanghai announced a raft of innovation and esports projects, including the new ESP Esports Cultural Experience Center [主场ESP电竞文化体验中心] , to be developed by Chaojing Group, featuring a 750-seat esports arena that will serve as the main venue for KPL (Honor of Kings) Eastern Division games and the home of EDG Mobile Esports. Putuo District is also home to the IMBA Esports Center at Global Harbor Mall.
STREAMING / MEDIA
Douyu and eStar Team Up for Wuhan
Douyu and eStar Gaming, both based in Wuhan, combined efforts to help Hubei businesses sell over $4.2M USD / ¥30M RMB of specialty products, with the team hosting a 4-day ecommerce livestream event.
CLUBS
RNG Files Claim Against XDD
Top tier esports organization RNG filed a breach of contract claim against its PUBG player, Zuo Zixuan (ID: 小叮当 or "XDD") and his mother (as legal guardian) for XDD's failure to sign an agreement with streaming platform Huya that had been negotiated by RNG pursuant to RNG's broker agreement with XDD. Apparently RNG entered a new deal with Huya immediately after XDD's streaming contract with Douyu expired, and then asked XDD to sign a contract with Huya after the fact, or face legal consequences. XDD refused and sought to negotiate a better deal, ultimately leading RNG to file suit against XDD for ~$7M USD / ¥50M RMB in liquidated damages, while XDD was representing RNG in a PCL (China's PUBG pro league) competition. The incident provides a window into the world of sometimes fraught relations and uneven communications between star players and their clubs, as well as the vital importance of streaming revenue to the clubs and players.
The incident also reinforces a point made recently by ECO Sports in its examination of free agency in the LPL, which is that professional talent management for esports professionals is underdeveloped in China. According to the article, development of esports agencies similar to those in professional sports is needed to develop the esports ecosystem, and to reduce friction from external factors that diminish the focus and competitiveness of the players.
Uzi Enters Free Agency
In other RNG news, one of the most recognizable esports stars in the world, Jian Zi-hao (ID: "Uzi") became a free agent, after sitting out the entire Spring Split with wrist issues. The face of RNG, Uzi was the first esports star to be signed by Nike, appearing in promotions with LeBron James in 2018, and just last week was featured in RNG's partnership with food delivery service Eleme while also launching a partnership with Italian fashion retailer Net-a-Porter. Inven Global suggests that Uzi gains negotiating power by becoming a free agent, and suggests that he could even use the leverage to negotiate a return to RNG.
ESPORTS ADJACENT
CNNIC Report Released
The China Internet Network Information Center's (CNNIC) semi-annual report on the state of China's online population was released, which Abacus nicely summarized (so that we don't have to):900M of China's 1.4B citizens are now online, a reminder that while the total population of Chinese online is massive, so too is the proportion without any internet access at all.Virtually all Chinese netizens (99.3%) have mobile access, and 423M are using online education platforms.Confirming some obvious trends, 560M Chinese netizens use live streaming, and ecommerce is the new driver of live streaming growth, with 265M users.During the peak of the pandemic, the average average online time per week was 30.8 hours, up 3.2 hours/week.