News Roundup: Big Catch-up Part 2 of 3

October 24, 2020 | VOL 3.31

Hello Esports Enthusiasts!

Here is Part 2 of our big post-hiatus catchup! Two days ago we covered the following topics (check our website if you missed it):

  • Global News

  • League & Tournament News

  • Club News

Today we continue with:

  • Research & Data

  • Local Development

  • Media & Streaming

And early next week we'll finish up with:

  • Brands & Marketing

  • Governance

  • Beyond Esports

  • Recommended Reading

I hoped to finish the post-hiatus catchup today, but it was a bit too much for one issue. So now I am hearkening back to my roots in the entertainment industry and stretching this content into a trilogy! Enjoy!

- John


RESEARCH & DATA

Adventures in the quest for accurate and meaningful data in esports
  • COVID-19 Continues to Impact the Esports Market: Newzoo Revises Its Esports Revenue Forecast. Although online consumption esports has increased in 2020, the heavy toll of event cancellations caused NewZoo to revise downward its 2020 estimate from $973.9M USD to $950.3M USD. NewZoo’s global esports revenue figures are heavily cited in the esports industry, despite their opacity, and wide divergence from estimates by many Chinese firms, which are similarly opaque. Having said that, the key takeaway here is that NewZoo is projecting flat growth overall in 2020, while also maintaining an annual CAGR of +15.5% for the 5-year the period ending in 2023.

  • In a month when Fall Guys: Ultimate Knockout came from nowhere to claim the top spot for PC game revenue, esports titles Crossfire, Dungeon and Fighter, and Free Fire all climbed the revenue chart in August, with usual chart toppers LoL, Honor of Kings and Peacekeeper Elite closely behind, according to Nielsen’s Superdata. These 6 titles continued to stay at the top of the revenue charts for PC and Mobile in September, with LoL in particular getting a lift, likely related to the start of Worlds 2020 (console games did very well in September, but are largely irrelevant to esports in China).


LOCAL DEVELOPMENT

Evolution and official action at the municipal and regional level


MEDIA & STREAMING

Esports media rights and content monetization in China

Huya + Douyu + Penguin Esports
Huya and Douyu agreed on a plan of merger that will combine the two Tencent-controlled companies into the world’s largest gaming and esports live-streaming company with more than 300M monthly active users (MAU), and integrate Tencent’s Penguin Esports to boot. The news largely lines up with my summary in Vol 3.29 (“Douyu and Huya to Finally Tie the Knot”) and fills in a few gaps: the deal is expected to close in early 2021, with Huya as the surviving entity (remaining listed on NYSE while Douyu delists from NASDAQ), the current CEOs will become co-CEOs, and Tencent will ultimately control 67.5% of the voting shares. According to ECO Sports, the new company’s Chinese name will likely be「虎鲨」, or “tiger shark”, reflecting a combination of Huya and Douyu brand icons.

The combined company should have over 70% of market share based on gaming and esports livestreaming users. This is an industry expected to be worth nearly $5.98B USD/¥40B RMB in 2021, according to Chinese research firm iResearch. Douyu and Huya had already effectively squeezed out all non-Tencent controlled competitors in the space by mid-2020, but there is concern about new ripple effects on the gaming and esports industry, as nearly 70% of game streaming hosts are covered by the 3 companies and only 1 of the top 10 most popular livestreamed games on Douyu and Huya currently is not a Tencent game. Huya has been reaching into global markets as well through its NimoTV product, which is currently seeing the most success in Brazil.

One of the expected benefits of the merger is a ceasefire in the frequent talent poaching between Huya and Douyu, and resulting lawsuits that always seem to land hardest on the clubs and players involved. Case in point: Douyu’s recent legal victory against major esports organization RNG in the amount of $US4.48M/¥30M RMB, for violating its exclusive streaming agreement with Douyu for, among other things, letting one of its players stream on Huya.

In other news:

► Finally, a quick shoutout to my friends at Shanghai Media Technology (SMT), who have been doing an amazing job with Riot, TJ Sports, and others producing Worlds 2020 from SMT's XR studio in Shanghai. Here is an article on their preparation. I also recommend this wonderful behind-the-scenes video from Mediastorm (h/t Josh Ye). 

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