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Tencent: Investing more in eSports?

The Financial Times (FT) reports that Tencent is looking at expanding its investment in eSports, with plans to cooperate with local authorities on organising and expanding tournaments for its popular games such as League of Legends and Honor of Kings. According to The FT, Tencent’s eSports division manager Hou Miao said the company will, “… organise more eSports events this year, because many local governments want to increase their investment,” pointing to a sector that  expects to see its audience grow to 454mn people in 2019 (gaming consultancy, NewZoo estimates).

The overall eSports sector will be worth an estimated $1.1bn, and China represents a growing slice of this market, with NewZoo forecasting the country will overtake Western Europe in terms of revenue this year (to $210mn). Tencent has already played a major role in China eSports growth by developing games like Honor of Kings, which recorded revenue of $1.3bn in 2018. Some games, including Honor of Kings already has its own eSports league, established by Tencent, reportedly attracting tens of millions of views online.

Meanwhile, Chinese authorities, aware of the financial potential in eSports, are investing heavily into infrastructure such as stadiums, training facilities and a eSports town in Hangzhou. Tencent, however, is still awaiting the approval of PlayerUnknown: Battlegrounds (PUBG), a game it acquired the rights to in November 2017. PUBG, a global hit, with c. 400mn players as of last year, has significant potential for eSports, monetisation and tournaments in China, but it is still awaiting official Chinese government approval. This follows the Chinese government stopping approvals for all new game releases from March-December 2018 and the introduction of regulations to improve the protection of minors “from the harmful effects of playing games.”



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