As gaming centers spread across China with strong government support, analysts caution looming regulations

By Zhang Ye Source:Global Times Published: 2018/8/13 17:58:39

As gaming centers spread across nation with strong government support, analysts caution looming regulations


Children jump on trampolines inside an esports center opened by Allied Esports in North China's Tianjin on Wednesday. Apart from esports tournaments, the center also offers other amusement activities to attract mass consumers. Photo: Courtesy of Allied Esports 

Esports is booming around the world, especially in the wake of the International Olympic Committee's announcement in October that the activity could become part of the Olympic Games. Apart from the online world, the industry in China is also seeking growth offline. Major players like Tencent Holdings and Allied Esports are gearing up to open esports centers around the world, which are expected to lure more audiences into the market. But industry experts have warned about market chaos, anticipating sector reshuffle amid talk of a national standard for esports centers.

In a quiet and remote residential suburb of the Sino-Singapore Tianjin Eco-city, about 40 kilometers away from the downtown area of North China's Tianjin, a science fiction-style esports venue opens its doors to the public with high expectations.

Venue operator Allied Esports as well as local government authorities plan to make it the esports hub of northern China.

Illuminated with fluorescent lights and geometric decoration, the 4,000-square-meter entertainment center was designed to look unique, enable people to play video games and surf the internet in comfort as well as enjoy other amusement activities such as arcade games, virtual reality technology, trampolines and billiards.

The center even boasts a 400-square-meter contest venue that can host 300 spectators.

To differentiate itself, an esports center must be well equipped and be able to host and broadcast professional contests, Feng Qing, CEO of Beijing-based esports venue operator Allied Esports, stressed in an exclusive interview with the Global Times, noting that many so-called esports centers in China are just glorified cybercafés.

The Tianjin esports center is the third Allied Esports has opened in China. The company, founded in 2016, also runs five centers beyond its home market.

Feng predicts that the number of Allied esports centers in the Chinese market will reach 10 by 2020.

"We have sensed rapid growth and robust demand in esports, and we want to follow that trend at a quick pace," Feng remarked.

Contest bonanza

Esports hype in China was already evident when the grand final of the League of Legends World Championships kicked off on November 4, 2017 at the National Stadium in Beijing, also known as the Bird's Nest.

More than 40,000 people flooded into the stadium to watch South Korean gaming stars Faker and CuVee go head-to-head.

And the tournament as a whole, starting on September 23, 2017, attracted up to 104 million Chinese viewers on various live-streaming platforms, accounting for 98 percent of all online contest spectators worldwide, data from Ukraine-based analytical agency Esports Charts shows.

By end-2018, the esports economy in China will have generated $164 million, or 18 percent of global esports revenue, while Chinese esports audiences are expected to reach 125 million, according to an annual report issued by Amsterdam-headquartered game consultancy Newzoo.

The fast growth of esports and its popularity among young Chinese people has ignited the interests of cultural and sports government regulators, as they look to diversify people's leisure activities and then ultimately improve the nation's quality of life.

The General Administration of Sport has organized the National Electronic Sports Open every year since 2014. The finals of this year's event are scheduled to kick off in December in Chengdu, capital of Southwest China's Sichuan Province, with prize money worth 890,000 yuan ($129,820) at stake, according to a July 24 statement on the administration's website.

In 2016, the now defunct Ministry of Culture issued a statement encouraging the establishment of more esports centers and more competitive gaming contests around the country.

Cashing in

Against this backdrop, cities across the country are racing to cash in on esports fever with video game theme parks and esports venues.

Huang Yonghao, an official of the Tianjin Eco-city Administrative Committee, expects the newly opened esports center to create an industrial cluster for game development, player training and tournament hosting.

If the center is a success, the eco-city will build a theme park with larger-scale stadiums to host international esports matches, Huang said at the venue's launch conference on Wednesday.

Hangzhou, capital of East China's Zhejiang Province and host of the 2022 Asian Games, has built a 5-square-kilometer esports town in its Xiacheng district.

In April, the Xiacheng government launched 16 initiatives including a 1.5 billion yuan development fund to boost the local esports industry. A year ago, the Olympic Council of Asia announced that esports would become an official competitive event at the 2022 Asian Games in Hangzhou.

Domestic internet entertainment giant Tencent will surely not miss these massive opportunities. The company has already gained a big fortune by filling stadiums with game fans and selling broadcast rights to match hosts.

Tencent E-sports announced in June 2017 that it would build at least 10 industrial esports parks across China in the next five years, complete with esports stadiums and incubators for gaming start-ups, Tencent's news site reported on June 16, 2017.

The building of esports centers across the country, which has come with strong government support, can help generate positive perceptions among the mass public and steer the activity toward the mainstream, Dong Zhen, an analyst with Beijing-based market consultancy Analysys International, told the Global Times, on Wednesday.

Reshuffle on horizon

It is estimated that more than 1,000 venues in China have branded themselves as esports centers, but in fact, about half of them do not even qualify, Guo Yang, secretary general of the Internet Access Service Association of China (IASAC), said at the launch conference in Tianjin.

During the conference, an industry standard for esports center operation was also announced, noting such aspects as personnel management, center decoration and equipment requirements. The industry standard was proposed by the IASAC and drafted by firms led by Allied Esports. Both parties are also in talks with the Standardization Administration of China to map out a national, government-level standard.

If a national standard was released, at least 20 percent of current esports centers in China would be pushed out of the market, said Guo.

While some large scale esports tournaments have been organized in big cities such as Beijing, Shanghai and Chengdu, it remains unknown whether smaller cities can draw enough attention from competitive gaming to fill government-backed venues, analysts cautioned.

"Esports centers are predominantly opened in first-tier cities where residents have a better understanding of esports," Dong remarked.

On its opening day, more than 3,000 consumers visited the Tianjin esports center. Among them, elderly people were frequently seen with their grandchildren, attracted by freely distributed experience coupons as opposed to the venue's fabulous design or esports features.

Allied Esports wants to forge the center into an amusement arcade targeted at the mass public. Apart from esports tournaments during the day, the center also plans to offer comedy shows at night throughout the week, according to the company.

"We want to attract people to the place via competitive gaming first and then lure them to spend more time inside with other entertainment activities as well as beverages and food," Bai Jinzhong, vice president of Allied Esports, said during the conference.

Newspaper headline: The ‘Wild West’ days of Chinese esports


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