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Racing from cyberspace to the marketplace

Sun Xiaochen
Updated: Dec 10,2014 10:38 AM     China Daily

E-gaming is becoming big business in China and is spawning a new generation of handset heroes.

Dreams sometimes start in the most unlikely places — for example, a stuffy basement Internet bar in Shaoyang, a small city in Central China’s Hunan province, where rebellious teenagers hang out after school.

Zhang Ning, aka xiao8, his ID in the online game community, was once one of these “hooligans” as he immersed himself in the virtual cyberworld as an escape from his parents and the challenges posed by real life.

However, Zhang didn’t become a stereotypically idle Internet addict. Instead, the 24-year-old is one of China’s best-known players of electronic games after winning the International Dota2 Championships with his team, Newbee, in July, and bagging a sizable share of the $5 million purse, more than double the sum earned by retired tennis ace Li Na when she won the Australian Open.

“Thanks to my involvement in competitive electronic gaming, I channeled my video game addiction into something positive, something I could work hard for as a career path,” said Zhang, who recently announced a career break after getting married.

The game Dota2 is a “multiplayer online battle arena”, where two teams of five players defend their “ancients”, or fortresses, from their opponents. The championship, hosted by the game’s developer, Valve Software in Seattle, was the highest-profile MOBA tournament in e-sports’ history, and offered a record $10 million in total prize money.

Zhang’s rise from a typical diaosi, an insignificant person, to accomplished gamer reflects the recent transformation of e-sports from a recreational tool with negative connotations to widespread acceptance by mainstream culture. It can also provide well-paid, if usually short-lived, careers for elite players against the backdrop of China’s booming video game industry and the evolution of information technology.

At the National Electronic Sports Open, which concluded on Dec 7, more than 70,000 fans crammed into the Qingdao International Convention Center to watch 15 provincial clubs compete in six individual and team events, including Dota2, League of Legends, Warcraft 3, and NBA2K Online.

Record viewing figures

The growing popularity of e-sports was clearly signposted by the huge crowd, the scenes of fans mobbing star gamers for photos and autographs, and also by record viewing figures for major online broadcasting platforms such as v.qq and pptv.

The open was the first nationwide tournament to be held since the State General Administration of Sport, e-sports’ national governing body, officially recognized cybersport — defined as “intelligent competition between human players on electronic game platforms” — as the country’s 99th athletic event in 2003.

“E-sports have specific rules and time limits designed specifically for person-to-person intellectual competition, whereas playing online games is just a pastime for personal recreation. There is a clear distinction between the two,” said Yang Ying, deputy director of the administration’s sports information center.

Recognition from the national authority, the huge fan base, and an improved public image have helped e-sports grow into a market that appeals to all types of club investors, broadcasters, and game developers and operators.

In August 2011, Wang Sicong, son of real estate tycoon Wang Jianlin, purchased Catastrophic Cruel Memory, a well-known e-sports club, for what was called a “significant sum of money”, and reorganized it under a new name, iG club. He also poached players from other clubs by offering them attractive professional contracts.

“Wang’s entry brought the game into a battle of capital, forcing major clubs to entice talent from each other through lavish salaries. This will reshape the e-sports landscape,” said Liu Yang, a veteran e-sports observer who last year posted a 26-chapter article online detailing the development of e-sports in China from 1998 to 2009.

According to the China Gaming Industry First-Half Report for 2014, the country has more than 400 million video gamers on PC, mobile, and console platforms, and most of them are consistent e-sports fans.

The report, which is published every six months by the China Audio-Video and Digital Publishing Association and IDC Insights, said China’s video game industry earned 49.6 billion yuan ($8 billion) in the first half, a 46 percent increase from the same period in 2013. Observers are now eagerly awaiting the full-year figures, which will be released at the end of December.

On Oct 19, more than 27 million fans watched South Korea’s Samsung White beat China’s Royal Club in the World Championships final of League of Legends, a hit title developed by Riot Games of the US. The figures are impressive, given the average 15.5-million-per-game TV audience for the NBA’s 2013-14 season final series.

China’s lifting of a 14-year ban on foreign video game consoles earlier this year has been seen as a further sign of the increasingly positive official attitude toward the e-games industry. That’s led observers to predict further market growth, a forecast underlined by report called China’s PC Online Games Market, published by Niko Partners, in which the research company estimates that over the next five years, revenue growth in the market will rise by $2 billion a year.

Fleeting fortune

The boom in online viewers has also encouraged major streaming websites to sign high-profile ex-players as full-time commentators to attract even more fans.

In September, Wei Handong, a retired gamer who played League of Legends competitively with Team WE in Shanghai, signed a contract with the high-definition gaming platform to provide online, real time commentary on strategies as he plays. Wei’s contracted 90 hours a month earns him 5 million yuan a year, a far cry from the 20,000 yuan a month he garnered in his peak as a professional gamer with WE.

Meng Yang, a retired e-sports gamer who now works with the online development department of IT giant Tencent, said: “Former professional gamers can snare lucrative deals with broadcasting sites, which attract fans by signing star athletes who contribute to the rise in viewing figures as well as ad sales.

“However, these deals don’t last long and individuals can be replaced overnight, so most average e-sports gamers have to consider a shift into other fields after retiring from their short professional career. That can be a struggle,” he said.

According to Jian Ai, manager of OMG, a club in Shanghai that specializes in League of Legends, the income gap has also prompted active professional gamers to ask for a wage raise, which has heaped extra commercial pressure on the clubs’ operations.

“Most of the clubs are running at a loss because it’s hard to establish sustainable business models other than simply relying on prize money and funds from investors.

“Although they’re attracting some limelight in the mainstream, e-sports remain less appealing for sponsors outside the IT and telecommunication sectors,” Jian said.

In an attempt to forge a positive public image for its players, OMG, which has a 60-member team of personal care assistants, logistics support, marketing and public relations crews, has been actively hosting team-building and branding events since it was established in 2012.

On Nov 18, the club launched the OMG Star Will Fund in conjunction with the Shanghai Sports Development Foundation. It’s the first charity event initiated by a Chinese e-sports club to help improve “digital education”, or the use of computers and digital tools in rural areas.

“By doing this, we hope to show society the positive side of the e-sports industry. Hopefully, the fund will help people and also benefit our players’ future careers,” Jian said.