The e-sport market in china by Daxue consulting

September , 2018
ESPORTSIN CHINA
© 2018 DAXUE CONSULTING
ALL RIGHTS RESERVED

One: Overview
Two: A Booming Games Market in China
Three: Mixing Views toward Esports
Four: Mobile Gaming is Changing the Scene
Five: Opportunities Call for Diverse Operations
TO ACCESS MORE INFORMATION ON THE ESPORTS ECONOMYIN CHINA, PLEASE CONTACT DX@DAXUECONSULTING.COM
www.daxueconsulting.com +86 (21) 5386 0380

OVERVIEW
1.
• The e-sports market in China is becoming the world’s second largest
2.
• Major players contributing to a ‘e-sports+’ business model
3.
• Mixed views towards esports and gaming by government
4.
• Mobile esports is the unique feature in China versus PC e-sports
5.
• Compared to internationally, the Chinese market has huge potential

Now is the best time for
esports in China since 1998.
‘ S k y ’ X i a o f e n g L i – C h i n a ’ s f i r s t e s p o r ts w o r l d
c h a m p i o n , n o w C E O o f T a i d u T e c h n o l o g y

*: (e) means expected value.
Source: iResearch
Chinese Esports
Market Continues
to Grow
China’s esports market grew from 30 billion RMB to
more than 60 billion from 2015 to 2017 and is expected
to reach nearly 100 billion RMB in 2019.
Though the expected annual growth will be lower in
2017-2018. The expected actual amount of growth will
be similar to 2016-2017.

Source: Newzoo
In 2017, China became the second largest esports
economy in terms of total revenue, only behind North
America including USA and Canada.
As a country, China has exceeded USA to become the
largest single country market of consumer spending on
games. And in 2017, China and USA accounted for half
of worlds total sales on game/game-related products.
China is The 2nd
Largest Esports
Economy in The
World
Global Total
Revenue
US$660
M
United States generated
US$25.4 B in 2017
China generated
US$32.5 B in 2017
China and USA generated
50%
of the global consumer spending on games.
36%
16%7%
41%
Global Esports Revenue Distribution
North America China Korea Rest of The World

*: (e) means expected value.
Source: iResearch
From 2015 to 2017, the total number of esports users in
China has almost tripled in figure from 100 million
people to 260 million people. This figure is expected to
grow in 2018 and 2019.
The growth, however, is thought to slow down as the
market starts to mature in time.
Growing Number
of Chinese Esports
Users Indicates
Potential Market
Expansion

1. 2018, 2019 and 2020 data are expected values.
Source: iResearch
Before 2016, PC games were dominating the Chinese
games market. In 2016, Mobile games had first time
exceeded to share the most of the market, and has
continued to reinforce its dominance in the market.
Researchers has set a strong growth expectation for
mobile games in next three years. In 2019, mobile
games are expected to reach more than 2/3 of the
market share in China.
Mobile Games is
Now the Dominant
Game Type in
China
72.30%
65.70%
56.30%
45.80%
33.90% 29.50% 24.80% 20.60% 17.20%
14.60%
17.70%
18.70%
15.80%
8.90%
6.60%
4.30%
3.20%
2.40%
13.10% 16.60%
25%
39.20%
57.20%
62.10%
66.70%
69.40%
70.90%
0% 0% 0% 0% 0% 1.80% 4.10% 6.80% 9.50%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2012 2013 2014 2015 2016 2017 2018 2019 2020
Market Share of Different Video Games in China
Market Share of PC Games Market Share of Mobile Games
Market Share of HTML5 Games Market Share of Other Types of Video Games

It is unimaginable to
represent my country,
especially the excitement and
pressure when you are in the
name of China, not your club.
‘Uzi’ Zihao Jian – China League of Legends Team gold medal winner

In 2018, Special
Esports Events
Gained Major
Influences
Source: Baidu Index; A: China won the gold medal in League of Legends, B: China won the gold medal in basketball.
In 2018, the first time esports was introduced into a major
international sports events – The 2018 Jakarta Asian Game.
During the events, the search frequency of ‘esports’ on
Baidu has reach the same level of that of ‘basketball’. This
shows a growing trends on people’s recognition of esports
in China.
Baidu Index Search Intensity of ‘esports + Asian Game’ and ‘Basketball + Asian Game’
A*
B*

Public attitude is moving towards a more neutral stand.
Media release on Weibo shows more positive attitudes
than before. Still, health and addiction concern is the
main anti-esports force.
When Chinese team won the League of Legends gold
medal in Asian Games, CCTV (Chinese government
official media) announced this news on Weibo
immediately and gained mostly positive feedbacks.
CCTV’s Weibo on League of Legends gold medal
Source: Sina Weibo.
Chinese Public Feels
Mort Positive
Towards Esports
Than Before
25,801
15,572
51,562
‘We are the Champion!’
‘We are the Champion again!’
Weibo Article: Game Addiction Does Not Equal to Esports
Weibo Article: Behind the Scene – They are the Most Obeying
Young ‘Rebels’

Source: Chinese Government Websites
In 2017, the Chinese government and public associations
made efforts to establish a healthy market environment
seeking for more gaming products.
On the other hand, supervision bodies continuing to
penalize the illegal practices within some PC and mobile
game operations.
Government
Loosening the
Regulation on
Gaming Products
Time Regulations Actioning body
Feb 2016 Service and Management Regulation on
Internet Publications
Ministry of Industry and Information
Technology
June 2016 Announcement on Service and Management
Regulation on Mobile Game Publication
National Radio and Television
Administration
Jan 2017 13th 5-Year-Plan on Copyright and
Intellectual Property has issued.
National Copyright Administration of
People’s Republic of China
May 2017 Guideline for Culture Development and
Reform during National 13th 5-Year-Plan
Central Office, State Council
Active Regulations on Service and Management Related to Gaming Products

China Develops
‘Esports+’
Business Model
League of Legends Pro
League in China is now
promoting a ‘home-away’
competition system.
Major LPL clubs has
announced their home
city. They plan to develop
the esports business
ecosystem with the local
investors and government.
Provinces with LPL clubs and club home bases.
Provinces without LPL clubs.
Chengdu
Xi’An
Beijing
Shanghai
Hangzhou
Guangzhou
Chongqing
RNG (LPL club) Beijing Home Base Source: 36Kr

The success of competitive mobile
games in general and esports activity
is taking mobile gaming to the next
level: all round entertainment, more
engaging than any other form.
Jelle Kooistra – Head of Market Analysts, Newzoo

In 2017, trading value of Chinese mobile esports market in
first time exceeded PC esports market to become the
largest. The market share of mobile games (including
mobile esports games), however, had exceeded that of PC
games a year before.
Special in China:
Mobile Esports in
China
Source: iResearch
30.1
30.3
5
46.02%
46.33%
7.65%
Distribution of Trading Values of Chinese Esports Games Market
Trading Value of PC Esports Games Market in Billion RMB
Trading Value of Mobile Esports Games Market in Billion RMB
Trading Value of Esports Related Merchandises in Billion RMB

In 2017, mobile MOBA games shared nearly ¼ in both in-
game sales and in-game time spending, which make them
the best performing mobile game type in this year.
Other game types were either lacking in-game sales or in-
game time spending such as the casual games, which
gained largest share in in-game time spending (27%), but
only a tiny part of in-game sales (4%).
Mobile MOBA
Games Deliver
the Best
Performance
Source: iResearch
34%
24%
9%
5%
4%
4%
4%
3%
3%
10%
2017 In-Game Sales of Different Types
of Mobile Games
RPG Games
MOBA Games
Card Games
Strategic Games
Shooting Games
Casual Games
Chess and Poker Games
Same-Elimination Games
Parkour Games
Undefined Mobile Games
10%
22%
2%
3%
3%
27%
25%
2%
1% 5%
In-Game Time Spending of Different
Types of Mobile Games
RPG Games
MOBA Games
Card Games
Strategic Games
Shooting Games
Casual Games
Chess and Poker Games
Same-Elimination Games
Parkour Games
Undefined Mobile Games

In 2017, Honor of Kings and its professional league King Pro
League (KPL) has ranked 1st in Chinese mobile esports
competitions with 10.3 B full year content viewers.
In 2018, Tencent teamed up with VSPN to promote a home-
away competition system in KPL and has established two
home stadiums for the Eastern and Western conferences in
Shanghai and Chengdu.
Case 1:
Honor of Kings
and King Pro
League
Source: Tencent E-Sports
Viewership (in Billion of People)
Home-Away Competition
2017 Spring Season: 2.68
2017 Autumn Season: 3.6
2017 Full Year (Contents): 10.3
2017 Full Year (Official broadcasting & videos): 9.1
Western Conference Home: Chengdu VSPN Centre
Eastern Conference Home: Shanghai Jin’an Sports Centre
Shanghai Jin’an Sports Centre Chengdu VSPN Centre
2018 King Pro League Autumn Season Promotion Poster

After the huge success of PUBG in early 2017, number of
PUBG-like mobile games has increased by 178.6% in last
December from the previous month.
Tencent holds the dominant place in this market. It has the
sole authorization from the original PUBG publisher
Bluehole Studio. Its official PUBG mobile games are now
available in both China and international App Stores.
Case 2:
PUBG-like Mobile
FPS Games
Source: 360 Think Tank; iResearch
PLAYERUNKNOWN’S BATTLEGROUND PUBG-like Mobile Games by Chinese Games Companies
In Chines app stores In International
app stores
Bluehole Studio launched this PC
game in early 2017 and made
enormous influences.
PUBG held its first international
tournament in July 2018, Chinese
team OMG won the first title in First
Personal Perspective Competition.

The e-sport market in china by Daxue consulting

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