News Roundup: Dec 5, 2020 - Please rate your esports professional on a scale of 1 to 5
Vol 3.37 | December 5, 2020
Hello Esports Enthusiasts!
I started my research this week thinking it was a light news week for esports in China. HA! There is never a light news week for esports in China. Lesson learned.
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p.s. scroll down to “The Ecology” if you are puzzled by the email header today
Leagues & Tournaments
The Clash Royale League World Finals begin today at Baoshan Arena in Shanghai, although only 2 teams, Nova Esports and W.EDGM, are competing onsite. The remaining 6 teams are competing online from their home countries, for a mix of online and offline competition, produced in China by VSPN. Fun trailer below – can you name all of the Shanghai streets it was filmed on?
Also battling today: the 2020 Crossfire Mobile League (CFML) Champions Cup between SV and REC.LGD, winner of the Spring finals. Also hosted by VSPN (that $100M fundraise becoming less and less surprising).
Eight of China’s top Dota2 teams are currently competing in the AMD SAPPHIRE OGA Dota PIT China Season 4, which resulted from the need to geographically split the international Dota PIT given the pandemic. The tournament ends on December 12, after which the teams go straight into the Huya Dota2 Winter Invitational, held by Huya with the China Dota2 Professional Association (CDA) and Fuming Wenhe.
Honor of Kings [王者荣耀]
The Fall Playoffs for Tencent’s Honor of Kings development league, the KGL, were marred by the disqualification of four teams (VSG, ESG, Lanxiang, and Simple) for mismanagement and behavior related to match-fixing. Commentary from the linked article suggests that favorable conditions for match-fixing have been created in the KGL due to the high cost and low returns of operating a development league team relative to the top tier KPL, combined with the relative lack of scrutiny. Next year Tencent Esports is revamping the HOK esports system, which may lead to improvements. The KGL finals will be held on December 12 in Wuxi.
2020 eSports Shanghai Masters Raises its Curtain. The event began on December 2 at Jing’an Sports Center and continues through December 6. With the Shanghai eSports Association as the organizer and driving force, it is the rare multi-title event featuring top games from multiple publishers: Honor of Kings (by Tencent), Identity V (by Netease), Brawl Stars (by Supercell), Overwatch (Activision-Blizzard), and World of Warcraft III (same). The tournament was preceded by a forum that appears to have been well-attended by a range of key members of China’s esports ecosystem, organized primarily by the Shanghai and Jing’an District sports and tourism-related agencies.
The 2020 TGA Tencent Esport Games [2020TGA腾讯电竞运动会] opened on December 4 at Beijing’s Li Ning Sports Center and celebrated its 10th anniversary with a live broadcast AR opening ceremony describing TGA as an incubator for China’s esports industry. TGA is traditionally a quasi-amateur competition showcasing Tencent’s titles, which Tencent estimates have to date included more than 100 million events with more than 250 million participants across more than 50 titles. This year the tournament was restructured as an entire season of interregional competitions across 20 provinces and autonomous regions, promoting Tencent's campaign for urban esports ecosystem development, and culminating in the month-long national contest of regional teams in LoL, Honor of Kings (including a women’s only track), FIFA Online 4, Crossfire, Call of Duty Mobile, QQ Speed, and Brawl Stars. Tencent plans to expand the 12 finalist regions competing this year (see graphic below) to 24 next year.
Riot Games unveils VALORANT Champions Tour for 2021 season. After a year of experimentation, Riot’s homegrown made-for-esports FPS will get its first official esports structure, comprised of several regional circuits rolling up into an international competition between the teams from each region. Red Bull and SecretLabs have already signed on as sponsors. Hopefully that publishing license for China is coming along, because this is an extremely promising esports title.
HK- based Topsports released financials and in the process provided a rare window into the finances of its esports operation, TOP Esports (TES). For the 6-month period ending August 31, 2020, TES earned total revenue of $5.9M USD / ¥39.2M RMB, a 29% increase over the same period in 2019. The strong earnings seem to confirm the wisdom of paying a hefty transfer fee to acquire Yu Wenbo [ID: Jackylove] early in the year.
Research & Data
A new report from Lanxiong Sports and Esports Business Meta tracked private investments in esports companies globally in 2020, finding a total of 142 disclosed esports investments from Jan through October, of which 111 disclosed amounts raised for a total of $1.187B USD. The vast majority of investments were below $5M USD, largely angel and seed round funding. Only two rounds exceeded $100M USD: U.S.-based SkillZ ($159M) and China’s VSPN ($100M).
Despite VSPN appearing in the top, investments in Chinese companies make up a small portion of the total, raising questions about the amount of undisclosed investment. Also, the preponderance of “toe in the water” investments this year is worth considering next to a recent industry survey by Foley & Larnder LLP and TEO supporting the likelihood of increased investment and deal activity to come in the esports space.
China’s esports industry is anticipating the release of national vocational skill standards for the “esports player” [电子竞技员] and “esports practitioner” [电子竞技运营师] professional classifications, established in 2019 by the Ministry of Human Resources and Social Security (MOHRSS) [人力资源和社会保障部] , after a final review meeting concluded nearly one year of study by the MOHRSS and the China Cultural Management Association (CCMA) [中国文化管理协]. A highlight of the conference was a presentation by Wei Jizhong, honorary vice president of the Olympic Council of Asia (OCA) and a vice president of the Tencent-backed Global Esports Federation (GEF), who endorsed the new standards as leading to “the road of the healthy and orderly development of esports industry.”
The professionalization of esports careers and the adoption of vocational standards reflect the maturity of the esports market in China but also exemplify the top-down focus on esports that is unique to China, and fascinating for international observers. For example, the standards are expected to include basic qualifications, job requirements, and scope, and a 5-level vocation skill rating scale. How might the player salary market be influenced by the ratings, which is generally characterized by low compensation except for the upper echelon of top players, who can command more than $1.5M USD / ¥10M RMB annually? Will the incidence of player and team misconduct, such as match-fixing, be improved? Will the standards help clarify an academic path for aspiring esports talent? Watch this space!
On November 28, Guangzhou’s Huangpu District announced that it would host the 2020 LoL Demacia Cup from December 21 - 27, bringing together 24 professional teams including 17 from the LPL. At the same press conference the “Greater Bay Area International Esports Innovation Center” [大湾区国际电竞创新中心] was launched, along with a new industrial policy to develop the Huangpu District esports industry, focusing on revitalizing the Yuzhu old town area [鱼珠片区老城市]. A $153M USD / ¥1B RMB esports industry fund will be established, with incentives including:
Up to ¥10M RMB for the local establishment of esports enterprises
Up to ¥300K RMB annually for esports talent, per person, in combination with a local talent registration system to be established
Up to ¥5M RMB for each new pro esports venue
Tencent Games and the Shangri-La group entered into a strategic partnership for esports and gaming themed rooms incorporating IP from Tencent Esports and Tencent Games. While gaming-themed rooms and “esports hotels” are by no means a new concept in China, this may be the first luxury chain to adopt the idea.
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