Gaming is serious business, as any esports team could tell you. That’s why expansion is important, and why the largest esports teams in the world are now taking a hard look at China.
The world’s second most valuable esports club, Team SoloMid (TSM), said that it will develop a base in China by 2020. The announcement comes just a month after the third most valuable team, Team Liquid, signed a partnership with Huya, a Chinese game streaming site likened to Twitch.
TSM has “major plans in 2020 to develop a base and also pick up teams and players in China,” group CEO Andy Dinh said at Hong Kong’s RISE conference on Wednesday.
Dinh didn’t reveal any potential business partners, but he indicated the group would be making a big play in China, the most significant gaming market outside the US.
“From a content perspective, we are going to plan to subtitle or basically translate all our content shortly,” he said. “[China is] definitely a major market for us.”
It’s not clear what TSM’s move into China will look like, but Team Liquid did it by signing an exclusive streaming deal with Huya. The team’s livestreamed content on the popular Chinese platform will include real-time translation.
Andy Dinh (left) has turned TSM into a North American esports powerhouse, being the only team to qualify for all of the first ten North America League of Legends Championship Series (NA LCS) Finals. (Picture: TSM)
China’s esports market is growing at a rapid rate. Analytics firm Newzoo said esports revenue grew 38% last year to US$906 million and is estimated to reach US$1.65 billion by 2021. By that year, North America is expected to account for 38% of the market by revenue and China 18%.
So of course two of the largest esports teams in the world see the opportunity China represents. In 2018, TSM pulled in US$25 million in revenue, and Team Liquid made $17 million, according to Forbes. They were valued at US$250 million and US$200 million respectively.
And Dinh certainly appears bullish on China. The 27-year-old entrepreneur and former esports professional said he believes TSM will eventually have pro players from China competing in big esports titles like League of Legends.
“There's 15 million monthly active users that play League of Legends in China alone. If you look at the US, the number is 2 to 3 million,” Dinh said, “It’s definitely going to be the future, right?”
US clubs like TSM and Team Liquid aren’t the only ones making moves in China. Popular South Korean esports team Gen.G has also made Huya rival Douyu a media partner for its League of Legends team. According to Forbes, Gen.G ranks as the world’s seventh most valuable esports company at US$110 million.
Team Liquid, which has won the last three NA LCS titles, revealed its fancy training facility last year. (Picture: Team Liquid)
With their large user bases, the appeal of partnering with either Huya and Douyu makes sense. Their numbers rival the 140 million monthly active users Twitch reportedly had last year.
According to the South China Morning Post, Huya -- a Guangzhou-based company listed on the New York Stock Exchange -- said it has surpassed 100 million monthly active users (MAU) at the end of 2018.
Douyu, a Tencent-backed streaming site, boasts even more MAUs, claiming it hit 159 million users in the first quarter, up 32 million from the year before. The company has recently restarted its IPO process on Nasdaq, seeking to raise as much as US$944 million.
