Logical steps

Firms bet on eSports business


eSports: one of China’s fastest growing industries

The year 2022 will be an eventful one for sport in China. Beijing will host the Winter Olympics, making it the first city to have hosted both the Summer and Winter games. Hangzhou will play host to the Asian Games as well. Continuing the theme of firsts, the gathering in Hangzhou will also be the first to accept eSports as a medal earning event.

A report this year on the eSports business in China found that the professional market alone will be worth $1.26 billion by year-end. China is home to the originator of one of the world’s most popular mobile games, Honour of Kings. Tencent, the company behind it, also acquired League of Legends in 2011, now the world’s most popular desktop MOBA (multiplayer online battle arena) game.

Competitive League of Legends matches now draw crowds, with top teams earning as much as $1 million for a championship win. Millions tune in online as well. During a recent earnings call Tencent revealed that this year’s League of Legends World Championship final had over 60 million viewers (about 112 million people watched this year’s Super Bowl). The event was held earlier this month at the Bird’s Nest stadium in Beijing (the main site for the 2008 Olympics).

Logitech, the computer peripherals maker from Switzerland (think keyboards and mice) was equipment provider for this year’s championship. The sponsorship deal earned it key advertising spots, marking its latest move in focusing on the gaming market.

The firm’s push into eSports is the brainchild of its CEO, Bracken Darrell. Speaking to Quartz Darrell explained how he has reduced the resources allocated to PC peripherals and concentrated more on the gaming business.

Naturally, the China market is in his sights. Although Logitech has been selling in the country for 25 years it has only just founded its first mainland China based R&D centre (it already had one in Hong Kong and another in Taiwan).

“China’s esports industry is entering a golden period,” explains Quin Liu, Logitech’s Asia-Pacific president. “It will continue to grow at a high speed in the next few years, as it is not even close to peaking.”

Of course this means Logitech will have competition, including US-and Singapore-based Razer: a maker of gaming laptops and peripherals that launched on the Hong Kong stock exchange last month via a HK$4.1 billion ($527 million) IPO – and rose as much as 86% on its first trading day (the second best performance of the year on the Hong Kong stock market after Tencent’s online publisher China Literature).

China accounts for 13% of Razer’s revenues, Quartz reports, but its boss Tan Min-liang has said the reason Razer chose Hong Kong for its IPO was because of its proximity to the Chinese market and its “enormous” growth potential (backing from local tycoon Li Ka-shing might have had some sway as well).

To that end, Razer has just released its first smartphone, which the South China Morning Post touts as the “ultimate gaming experience [with] groundbreaking audio-visual technologies”. The SCMP claims Razer is also teaming up with Tencent to help launch Honour of Kings in the American market.

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