Nike, The International, and Auto Chess2019’s Top 10 Esports Business Stories in China (5-1) – The Esports Observer

Posted: January 3, 2020 at 10:47 am


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In part one of our top 10 esports business stories from China (which you can read right here), we detailed five of the most important stories of 2019 from the region.

Those included team investments and major international wins, plus one of the industrys largest multi-million dollar media rights deals to date.

In this second half looking back at the milestones of Chinas esports business in 2019, all but one of the top five stories involve Tencent, Riot Games, and League of Legends in some way.

Here are the top five entries in the top 10 esports business stories of 2019 in China.

Between August 20-25, game publisher Valve hosted Dota 2s The International Shanghai (TI9) at Shanghais Mercedes-Benz Arena. TI9 was the first event of its kind to be hosted in China in nine years, and also the first esports tournament in which the winner could win over 100M ($14.31M) in prize money in China. Eventually, esports organization OG took home $15.5M of the $34M prize pool and became the only organization to win the TI championship for two consecutive years. OG and its players also ranked #1 in The Esports Observers Top 10 Esports Players and Teams of 2019 by Total Prize Winnings.

Since 2011, The International has broken its own record as the highest esports prize pool tournament every year. This time, TI9 surpassed the $30M Fortnite World Cup and kept its crown.

However, the event not only broke the record, but also broke hearts. The event showed a significant lack of control in ticket sales, which led to a serious problem for fans trying to attend the event.e. In September, the League of Legends community also reported ticket sales issues during the 2019 World Championship, highlighting a growing issue within top-esports events.

In the past three years, the Tencent Global Esports Annual Summit has become the most significant esports conference and summit in China. On June 20, Tencent Holdings first detailed at the summit that it earned $66M from media rights and another $64M from sponsorship deals related to its esports operations in the first half of 2019.

In addition, TJ Sports released a while paper for League of Legends esports, reporting that the 2017 LPL Summit Split contributed 3B ($436M) media value for itself and its six official partners, including Jeep. Mercedes-Benz also received approximately 600M ($87.2M) in media value as the official Chinese partner of the 2017 League of Legends World Championship.

TJ Sports also revealed that the company would open bids for one-two new franchise spots in the 2020 LPL. In December, Wuhan-based esports organization eStar became one of the new teams in the 2020 LPL.

On Jan. 10, Tencent Holding and game publisher Riot Games established a joint venture called TengJing (TJ Sports) in Shanghai. The companys main focus in 2019 was on the League of Legends relevant esports business in China, including tournament organizing, and talent management. Tencent and Riot Games equally hold 50% of shares in the venture. In addition, TJ Sports named Jin Bobby Yibo and Lin Leo Song as the co-CEOs of the company, and announced Mercedes-Benz as the head partner of the LPL.

The establishment of TJ Sports could be considered the beginning of major Chinese esports business news in 2019. It also signals that both companies want to entirely separate esports from the gaming industry, and create an exclusive space for League of Legends esports. In June, TJ Sports partnered with Riot Games to create the 2020 League of Legends World Championship Committee, which will co-host the 2020 World Championship in China.

In February, one month after TJ Sports established, the company brought global sportswear brand Nike to the sponsors list of LPL. Nike is now the exclusive apparel sponsor of the LPL from 2019-2022.

According to Chinese media outlet Lanxiong Sports, the deal was valued at 50M ($7.48M) a year, including cash and equivalent products. Sources close to the deal also confirmed these details with The Esports Observer.

For a long time, people were struggling to evaluate the sponsorship value of Chinese esports. For the first time, Chinas esports industry saw a shadow of what might be if it reaches the heights of a traditional sports league. For example, Nike signed a 10-year sponsorship deal with the Chinese Football Association Super League in 2018, for 300M ($45M) a year.

The deal also started an apparel business competition in esports in the region. Brands and the industry started to consider what should esports apparel line look like? In April, Nike unveiled its first LPL co-branded t-shirt called Gamer to the public. In September, the company unveiled all 16 LPL team uniforms, featuring a wide V style with the Nike Swoosh and LPL logo, but no team sponsors logos.

Another major Chinese apparel brand Li-Ning also created its own esports apparel line with multiple Chinese esports organizations. Compared with Nike, Li-Ning decided to direct sponsor teams and players, even acquiring LPL team Snake. (Snake was later rebranded to LNG).

What is going to be the next big esport? No individual or organization is 100% sure how to answer this question. If 2018 was about the rise of the battle royale genre (games such as Fortnite and PLAYERUNKNOWNS BATTLEGROUNDS), then 2019 belongs to the auto battler genre, and it all came from a Dota 2 mod called Dota Auto Chess.

On Jan. 4, an unknown game was released in the Dota 2 game system. Dota Auto Chess was designed by a five-man Chinese game studio Drodo Studio, and in only a month reached a peak of more than 300K concurrent players and 4.13M subscribers, globally.

For a while, Dota Auto Chess became the hottest card-style game not only Chinese live streaming platform Douyu and Huya, but also on Twitch. The huge success attracted plenty of partnership offers from game publishers, most notably Valve and Tencent. In March, Drodo Studio decided to partner with Chinese tournament organizer ImbaTV and game company Long Mobile to develop a mobile game called Auto Chess, and unveiled a $1M Auto Chess Invitational esports competition in Shanghai.

Meanwhile, Valve and Riot Games started to develop their own standalone versions inspired by Dota Auto Chess. A new game genre was officially born the auto battler, complete with competition from game publishers around the world.

At time of writing, Riot Games has developed Teamfight Tactics (TFT), which was directly inspired by the popular Dota 2 mod. The game had massive viewership on Twitch at launch and Riot Games claimed that the company would double down on developing TFTs esports scene.

Valve developed Dota Underloads, which also featured a 5K ($5.7K) esports competition at the ESL ONE Hamburg Dota 2 event. Blizzard Entertainment also announced an auto battler mode in Hearthstone called Hearthstone Battlegrounds at BlizzCon 2019. Despite the fact that Tencent owns Riot Games and indirectly owns TFT, the company has added an auto battler mode into its Honor of Kings system called Kings Simulation Battle.

In many ways, the phenomenon of Dota Auto Chess is the best underdog story not only the Chinese esports industry, but also the gaming industry as a whole. Despite the fact that the Chinese game publisher Tencent indirectly owns most of the esports titles including League of Legends, Fortnite, Clash Royale, Rocket League, PUBG, and CrossFire, Tencent still has not developed an esports title from China that has found worldwide appeal. Dota Auto Chess was actually the first game with a worldwide player base that can also boast made in China.

It is still too early to say that the auto battler genre is the next esport, however. Looking on TEOs retrospective of esports history, its easy to see that an esports success is defined by the community rather than game publishers. The success of the auto battler as a genre can not only credit those five Chinese developers from Drodo Studio, but also the esports community, who embraced this clever game mod.

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Nike, The International, and Auto Chess2019's Top 10 Esports Business Stories in China (5-1) - The Esports Observer

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January 3rd, 2020 at 10:47 am

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