Twitch might be synonymous with live-streaming games in the US, but in China, there are two giants dominating the field. Douyu is the larger of the two, but rival Huya is growing fast by focusing on a different target: Mobile games like Honor of Kings and PUBG Mobile.
Huya made its platform more mobile friendly in a bid to beat its larger rival, and in a way, it’s working. Huya’s 146 million monthly active users (MAUs) might fall short of Douyu’s numbers, but streamers on Huya are more engaged, and it’s making the platform significantly more money.
But before it was one of China’s main live-streaming giants, Huya -- literally “tiger’s teeth” in Chinese -- started out as the gaming-focused unit of YY, one of China’s earliest live-streaming platforms. YY eventually spun out Huya, which went public on the New York Stock Exchange in 2018 (joining YY in the US, where its listed on Nasdaq). While Huya today isn’t solely focused on gaming, it still gets 50% of its revenue from game live streaming.
Together with Douyu’s 160 million MAUs, the two live-streaming platforms now control over 60% of the market. Though Douyu has more users, data from analytics firm Measurable AI shows that Huya’s paying users spend an average of more than US$30 on the platform, which is three times more than the average Douyu user.
Huya’s success in courting loyal users owes a lot to its mobile strategy. The company has made its app as mobile-friendly as possible, putting an emphasis on mobile games and mobile esports tournaments.
While platforms like Amazon’s Twitch are still better designed for PC viewers in many ways, Huya’s strong focus on mobile appears to be paying off. According to its Q3 earnings report, the platform now has 63.8 million MAUs on mobile, or about 44% of its total user base.
Huya’s focus on mobile games has been effective, and not just at home. The company’s overseas division, Nimo TV, has surpassed YouTube to have the most hours live streamed for mobile games.
Huya’s strategy is also working in another way: The company makes more money than its rival, even with fewer users. In Q2 2019, Huya made 2 billion yuan (US$284.6 million) in revenue while Douyu made 1.87 billion yuan (US$266.1 million). In Q3, Huya’s revenue rose to 2.3 billion yuan (US$327.3 million).
A whopping 95% of this revenue comes from virtual gifts. Users of the platform can send virtual gifts to their favorite streamers, and Huya takes a cut. It’s a popular monetization tool on Chinese streaming platforms, and Huya’s loyal user base appears to be giving it an edge.
Besides live-streaming, Huya is also actively investing in esports. Most recently, the company acquired a US$30 million minority stake in the German esports tournament organizer ESL.
Huya has also moved into the game publishing business. The company is the publisher in Asia for the popular Finnish RPG game Control. It is also looking to publish an upcoming Chinese FPS game named Boundary in the near future.
But the competition with Douyu is still raging, having recently moved on to poaching talent. Douyu recently poached top Honor of Kings (also known as Arena of Valor) streamer Zhang Daxian from Huya. Another up-and-coming Chinese video platform, Kuaishou, is challenging Huya’s dominance on the mobile front by entering mobile game live-streaming.
But however the Douyu vs Huya battle shakes out, one stakeholder is going to be very happy. Tencent has major stakes in both platforms. The Chinese tech giant is Douyu’s biggest shareholder with 40.1%, and it’s Huya’s second largest shareholder behind only YY.