›Hello Esports Enthusiasts!
Today's issue is part 3 of 3 of our post-hiatus catchup, covering:
Brands & Marketing
For new subscribers, our last two issues (Vols 3.30 and 3.31) covered Global News, Leagues & Tournaments, Club News, Research & Data, Local Development, Media & Streaming.
NOTE: So much of the esports news in China has been dominated by Worlds 2020 that I decided to move all of it over into a standalone roundup of Worlds 2020 content. Look for it in your inbox later this week. Also, I had intended to include a round up of news about aspiring governing bodies, but decided that is better suited for a longer note that I'll send out soon.
Remember, if you missed any of the previous issues, go peruse the "archive" at our website.
And Now a Note About the U.S. Presidential Election
Much ink will be spilled in the next couple of months speculating about the future of the U.S.-China relationship under a Biden administration. Certainly it is too early to tell how any of that will affect esports from a business perspective, but it is relevant, given that the relationship between the world’s two largest economic powers permeates cross-border capital flows and business everywhere.
In the near term, however, we will learn if the Trump administration has any appetite left to defend or enforce its TikTok and WeChat Executive Orders, the latter of which has put Tencent’s many investments in the esports industry abroad under the U.S. government’s microscope. While the WeChat EO has so far largely stalled out in the face of legal challenges, it continues to pose a risk of disruption to multiple pillars of the esports ecosystem, given the U.S. administration’s aggressive stance and perhaps a belated discovery of the extent of Tencent’s investments in the gaming and esports space.
Still, Tencent Esports execs would be forgiven for breathing a sigh of relief at the election results. While we do not yet know if the new U.S. administration will support the EOs or the policy aims behind them, it seems clear now from the Trump administration’s performance in court and its public behavior that the EOs were largely motivated by the Trump campaign's desire to demonstrate “toughness” against China and potentially as a negotiation chip to extract side benefits. Those motivations are less urgent post-election. CFIUS still has a role to play, but presumably with less political pressure.
If you have any thoughts, our DMs are open at @ChinaEsportsBiz!
BRANDS & MARKETING
Most of the recent activity in this area revolved around Worlds 2020, so stay tuned for our forthcoming roundup!
Endemic brands Razer and ASUS, and non-endemic brands SKG, Kappa, and Tim Hortons, were all announced as partners of Tencent Esports. The announcement was made at at Tencent’s Global Esports Summit in August, following the KPL Championship and preceding Worlds 2020. Tim Hortons detailed in September that its partnership with Tencent encompasses opening esports cafes in China, which are essentially coffee shops that incorporate esports into their design, and include rooms and venue space for mobile gaming competitions. Tim Hortons received a significant investment from Tencent in May 2020.
King Pro League (KPL)
The KPL, China’s pro Honor of Kings league, acquired a number of non-endemic sponsors in the wake of the Honor of Kings Champion Cup in Beijing, including:
Skechers, partnering with KPL Team Hero. Team Hero is a fixture of the growing esports scene in Jiangsu and is establishing a home venue in Nanjing.
Call of Duty Mobile (CODM)
CODM went live in China on October 20, with great anticipation for its esports potential, as FPX immediately formed a CODM division. Around 50M gamers in China had already pre-registered. CODM was developed by Tencent’s TiMi Studios, the same studio that developed PUBG Mobile, but published (outside China and SEA) by Activision. Some emphasis of this distinction by Activision seems to have helped CODM avoid the same fate as PUBG Mobile in India, which became political collateral damage when it was banned by India. (Tencent is seeking to return PUBG Mobile to the Indian market by relinquishing its rights to developer PUBG Corp. in Korea, in which Tencent has a significant indirect ownership interest.)
Valve tightens rules with Steam China amid greater regulatory scrutiny in the country. For some time it has been unclear how games currently available in Steam would be transitioned into the new China-only version of Steam being developed by Perfect World. Now it appears that developers will be required to obtain government approval to include their games on the Chinese platform, which could impact CS:GO and Dota2 esports teams and tournaments if a new licensing requirement is imposed.
Honor of Kings [王者荣耀]
Tencent-backed Esport Star Honor of Kings DAU Reaches 100 Million. The mobile esports title now holds the record for daily active users, across all platforms. It is also one of the most lucrative, despite being almost exclusively played in China, with 96% of its revenue coming from China.
Esports Pros Have ‘Dream’ Jobs—but Game Publishers Have All the Power. Not China-specific, but an insightful look at the money at some of the core issues and monetary contradictions in esports everywhere.
How Hong Kong’s Change in U.S. Special Status Affects Gaming and Esports Investments. Noting that currently 2/3 of foreign inbound investment into China flows through HK, TEO suggests that the status change may result in limiting much-needed capital to the fast-growing esports industry in China.
From playing to paying: The art of monetizing games in Asia. A good overview of the business models driving video games in Asia, relevant to how esports factor into publishers’ plans for their titles.