China’s Flourishing E-Sports Market

Mobile-Based Gaming Enjoys Strong Momentum

China’s smartphone user total continues to rise. At more than 1 billion, the number of smartphones in use in the country is almost equivalent to the combined population of Europe and the US. This offers an immense addressable market for mobile e-sports, a nascent but fast-rising segment of competitive gaming. In 2017, we predicted that e-sports will become mainstream by 2022 (see CCS Insight Predictions for 2018 and Beyond).

About 95 percent of Internet users in China use a smartphone to go online, providing a large opportunity for mobile gaming. The small design of the devices means that games developed for smaller screens tend to be less complex than those for PCs. This helps to lower the learning curve and encourage faster adoption.

It’s also a fertile market for e-sports. China currently has about 200 million fans of competitive online games, and access on smartphones is quickly increasing this audience and creating the largest e-sports market. During the past few years, several popular mobile games, such as the multiplayer title Honour of Kings, have become a mainstay in the country and throughout Asia. We expect that growing consumer interest will expand the number of professional players as well as fans.

The commercial potential of the Chinese e-sports space has attracted local technology giants, who are keenly promoting themselves as the drivers behind the industry. Companies like Tencent and Alibaba are organising e-sports tournaments and forming professional leagues. They’re also supporting broadcasts of game play, which is another potentially lucrative opportunity.

Earlier in 2018, Google led a $120 million investment in Chinese live-stream mobile game platform Chushou, as it explores ways to enter the country. Founded in 2015, Chushou has benefited from the rise of competitive mobile games in its home market. To a certain extent, smartphones have also made it easier for a wider number of tech players to get involved in gaming and live-streaming.

Thanks to the irreplaceable role of smartphones in Chinese consumers’ lives, e-sports and mobile titles are on track to become extremely popular. However, momentum could hit a speed bump, as the government is concerned about the impact of gaming on children and could move to regulate the industry.

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