By: , May 17, 2018 Forbes
The thriving pro gaming industry may have its roots in South Korea, but it has sprawled to unprecedented levels in neighboring China–so much so that it has surpassed the U.S. market. Asia now makes up half of the global gaming market, according to gaming market researcher Newzoo.
While classic titles like League of Legends have an unsurprising stronghold in China, mobile esports games like Clash Royale and Tencent-owned Arena of Valor are propelling the country’s obsession and redefining the industry–36% of the world’s gaming market is now on mobile devices, with 183 million mobile gamers in China.
Such fast growth makes China’s esports industry the new frontier for game publishers like Supercell, which is hoping to reinvigorate its two-year-old mega hit title Clash Royaleby investing in a new league in which nearly 7,000 players compete for $1 million prize money.
For Korean-U.S. esports startup Gen.G, which grooms and trains gamers to be international champions, the multiplayer online battle game “Clash” is a foot in the door of China’s $32.5 billion gaming market. With hubs in California and Seoul, Gen.G–short for Generation Gaming–was listed as a South Korean startup to watch in 2018, and recently set up its first mobile esports team of five players in Shanghai to take on the “Clash” league of 36 teams. But that is only the beginning.
Arnold Hur, Gen.G’s chief growth officer, expects esports will match regular sports in popularity in China and elsewhere in Asia, because those of any skill level can play. The rise of mobile is also giving rise to new demographics of game players, such as older users and people with disabilities. “With esports, even if I’m bad at it, I can be immediately matched with somebody at my skill level and have a great match,” he says. Gen.G was recently rebranded from KSV.
But pro esports is serious business. The industry made an estimated $660 million in 2017, with 16% of it from China alone, according to Newzoo data. He believes more companies are ready to invest in dedicated players. Perhaps game publishers used to see esports as a marketing ploy, but now they are finding it critical to the success of their games and their company to invest into creating esports divisions, Hur says.
Leagues not only help market games, but also extend the lifespan of older games. More accessible than some traditional sports, esports offers the opportunity for people to watch and be inspired by esports stars and later have an opportunity to mimic them, Hur says.
While South Korea remains a crucial hub for esports as home of the best players and training infrastructure, Arnold believes that game publishers are already putting the U.S. and China on equal footing when considering how to design and market their games. “But I think in the next five years, you’re going to have to think about Asia first because the player base, the fan base, everything here is growing so quickly.”
In terms of playing and practicing, mobile gaming puts much more emphasis on strategy than coordination, meaning players spend more time studying their rivals and their game setups compared to PC gamers.
Gen.G’s Shanghai team–dubbed “Gen.G Clash Royale”–is all Chinese with no major market entry barrier, but the company faces new hurdles in having to quickly adjust to mobile. The shift away from PC presents a new frontier from logistics during competitions, from setting up live streams to different practice strategies.
“A lot of infrastructure is just now getting built, versus in traditional esports, which have structure and professionally [have] been doing this since the Starcraft days,” Hur says. “Even things like how to see the best competitions, what plays they’re doing, how to analyze it, who really understands it–it’s all brand new.”
The rise of esports in China first started with hobby gamers competing in the late 1990s on PC games like Starcraft or Counter Strike, notes Weiwei Geng, Gen.G’s China managing director. Powered by a tech revolution and rising incomes, affluent, entrepreneurial young people in the early 2010s began to reject the family business and launching their own–including esports teams. “They didn’t worry about making profit,” Geng says. “That’s their passion, they have money, they have resources, they have social connections, the network, so they upped the standard and quality of esports 2.0 in China.”