Pictured: Warcraft III pro Jang ‘Moon’ Jae Ho signs a fan’s shirt. Credit: Ren Yijun/NetEase
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Last week, after multiple partnership deals and a $145M governmental esports fund were announced at the Tencent Global Esports Summit, the wave of esports as the “next generation of culture and sport” has radiated from the island of Hainan across the whole country. However, underneath the hype of Chinese esports, there are several facts and insights that need to be critically considered.
Among the top stories: China’s Ministry of Human Resources and Social Security said the country will need about two million esports talents in the next five years; Long Mobile announced a partnership with Tencent for Auto Chess, with Tencent announcing its own auto battler mobile game, Chess Rush, one day later. Tencent Esports also announced that the Tencent Global Esports Arena (TGA) Summer Final will take place in the Chinese city of Xi’an and esports organization eStar Gaming will set up the first home venue for an Honor of Kings team, located in the Chinese city of Huhan.
Every week The Esports Observer presents the biggest esports business news in China, including investments, acquisitions, sponsorships, and other major news from the region.
Chinese Government Projects Two Million Esports Talents in the Next Five Years
Credit: Tencent Esports
On June 28, China’s Ministry of Human Resource and Social Security announced an esports industry report. In this report, there were several key data points widely reported by Chinese websites:
- China’s esports industry currently had ¥94B RMB ($13.66M USD) total output value in 2018, and the report predicted more than ¥135B ($19.62M) in 2020.
- For 86% of Chinese esports related professionals, salaries are one-to-three times higher than the average Chinese salary.
- The country is projected to generate about two million esports related talents over the next five years, according to the report.
Data from the report was provided by a company called IRE Research. This report has not only refreshed the image of esports in Chinese society, but also generated excitement that “esports is the next keyword development in the country.”
It should be noted that the data in this report conflicts with another report published by China’s National Bureau of Statistics. In that report, the whole market size of China’s sports industry in 2017 was measured at ¥2.2T ($319.7B) total output value, with a 15.7% increase from 2016. In addition, one more report from the National Bureau of Statistics identified that there were over 4.4 million sports professionals in China in 2016.
In China, esports has been recognized as the 78th official sports title in the country. It should follow then that esports follows the same proportional ratio as the Chinese sports industry. According to the IRE Research data, the market size difference between the Chinese esports industry and Chinese sports industry will be 1/22, if we round up China’s esports industry value from ¥94B ($13.6B) to ¥100B ($14.53B) in 2019, and also ignore the annual increase in the country’s sports industry. Therefore, the total talent pool of Chinese esports should be maximum 200,000 in 2019.
The five-year increase from 200,000 to two million seems highly unlikely. The whole industry would need a minimum 58.5% increase every year to reach two million by 2024 (the fifth year). As a comparison, the whole Chinese sports industry only saw a 15.7% increase from 2016 to 2017.
Long Mobile Partners with Tencent for Auto Chess, New ‘Chess Rush’ Game Announced
Credit: Tencent Esports
On July 3, Li Feilon, CEO of Long Mobile, announced a partnership deal between the company and Tencent Games 
for Auto Chess .
According to the announcement, Tencent Games will exclusively distribute Auto Chess in mainland China, and game accounts will be fully integrated into Tencent’s WeChat and QQ social media platforms.
Drodo Studio later confirmed this partnership.
At the E3 gaming convention in Los Angeles in June, Drodo Studio announced that the PC version of Auto Chess will be made exclusively available via the Epic Games Store. It’s likely that the partnership between Tencent and Long Mobile would only affect this exclusivity in China and other parts of Asia where Epic Games does not have a strong presence. The Esports Observer reached out to Li and Drodo Studio for comment, but both have not replied at the time of writing.
The announcement created some heated discussion in the Auto Chess and Dota Auto Chess communities. Dota 2 publisher Valve Corporation previously announced that Valve and Drodo Studio would help develop each other’s standalone versions of Auto Chess (in Valve’s case that would be Dota Underlords).
Furthermore, “Meng Xiaoxia” (real name unknown), one of the core developing members of Drodo Studio, stated in a public forum in March that “Drodo Studio will never cooperate with Tencent Games.”
Screen capture of a public forum comment.
To add further drama, the day after the partnership was announced Tencent Games revealed its own standalone auto battler mobile game called Chess Rush. This game will be a “quick experience” auto battler mobile game (10 minutes per game), and will be released on July 4, according to the company. Furthermore, all regions around the world will use the same server. It should be noted, this game is fully developed by Tencent, and another battler game, Teamfight Tactics, is developed by Riot Games which is entirely owned by Tencent.
TGA Summer Final Set for Xi’an, eStar Gaming Announce Home Venue in Wuhan
Credit: Tencent Esports
On June 28, Tencent Esports made two announcements related to esports events in Chinese cities.
The Tencent Global Esports Arena (TGA) competition will hold its summer final in the Chinese city of Xi’an, from June 28-14. The TGA Summer Final will feature 16 esports titles, including League of Legends , CrossFire , Honor of Kings, and Peacekeeper Elite.
In addition, Tencent Esports also announced that Honor of Kings-focused esports organization eStar Gaming will build its own home venue in the Chinese city of Wuhan. It should be noted that eStar Gaming will be the first esports organization in China, outside of League of Legends-related tournaments and events, to own a home venue.
eStar Gaming was founded in 2014 by former Warcraft III player Sun “xiaOt” Liwei. On June 15, eStar Gaming’s Honor of Kings division, eStarPro, won the finals of the King Pro League (KPL) Spring Season, along with ¥3M ($436K) in prize money.
Other Esports Business News:
Credit: KPL Union
- On July 2, the China Digital Entertainment Expo & Conference (also known as ChinaJoy) announced it will host an “Esports Weekend” event from August 3-5, featuring multiple ChinaJoy esports competitions that will be open to the public.
- On July 1, the KPL Union and the China Culture Entertainment industry association hosted a “China Esports Patriotism Education” training program in the capital city of Beijing. More than two-hundred KPL players and esports-relevant professionals attended the program, which educated the players on avoiding gambling or match-fixing behavior in the KPL.
- On July 1, Chinese telecommunications company China Mobile partnered with TJ Sports, NetEase, and Blizzard Entertainment to host the “2019 China Mobile Cyber Competition.” The event featured separate tournaments for League of Legends and Hearthstone, with a total prize pool over ¥1M ($146K).
