The author of this article analyzes the main functions, function iterations and operational ideas of Huya Live from multiple perspectives such as market, users, products, and operations, explains the development trend of Huya Live, and gives some development suggestions for Huya Live to share with everyone.

On May 11, 2018, at 9:30 a.m. local time in the United States, the game live streaming platform Huya was successfully listed on the New York Stock Exchange, becoming China's first listed game live streaming platform.

1. Product Introduction

1. Product Name: Huya Live

2. Product type: Game live streaming platform

3. Product logo:

2. Market Analysis

2.1 Network conditions

In December 2013, the Ministry of Industry and Information Technology issued TD-LTE licenses to the three major operators, China Mobile, China Unicom and China Telecom, marking the full entry into the 4G era.

• 4g download speed 1.5M/s-10M/s
• 3g download speed 120K/s-600K/s

4G has a significant improvement in network speed compared to 3G. 3G network is suitable for viewing high-definition pictures, while 4G network is more suitable for viewing high-definition live broadcasts. Therefore, the subsequent popularization of 4G laid the foundation for the rise of mobile live streaming and game live streaming.

2.2 Number of game users

Data from the "2014 China Game Industry Report" shows that the number of game users in China reached approximately 517 million in 2014. In 2014, with the popularization of 4G, live streaming platforms were no longer limited to PCs, bringing a large number of potential users to game live streaming platforms.

2.3 Number of video users

The China Internet Network Information Center pointed out in the "34th Statistical Report on the Development of China's Internet" released on July 21, 2014 that as of June 2014, the scale of China's online video users reached 439 million, an increase of 10.57 million from the end of last year.

Data from the "2013-2014 China Online Video Application Research Report" released by CNNIC in June this year showed that the usage rate of video users on PC is declining, while the usage rate on mobile terminals is increasing, especially among young users aged 10-29, the proportion of watching videos on mobile terminals is over 69%.

3. User Analysis

3.1 Target User Group

This is the user age distribution chart of the live broadcast industry in 2016. Compared with previous years, the game live broadcast industry has not undergone any disruptive changes, so I believe that in 2014, the target user age of the game live broadcast industry is mostly concentrated in the age group under 30 years old.

3.2 User Demand Analysis

3.2.1 Basic Requirements

1) Relieve stress

A survey conducted by the Social Survey Center of China Youth Daily and Questionnaire.com on 2,007 respondents showed that 64.3% of the respondents said that they watched live broadcasts mainly for leisure and relaxation, 41.5% of the respondents watched live broadcasts to relieve their emotions, 38.9% of the respondents watched live broadcasts to find people with similar interests and hobbies, and 35.8% of the respondents learned skills by watching live broadcasts.

According to Sun Hongyan, director of the Institute of Children and Youth at the China Youth Research Center, live streaming is popular among young people because young people who grew up in the Internet age are accustomed to visual, direct and fast browsing and reading patterns. The content model of online live streaming is in line with the cognitive characteristics of this generation of young people.

2) Fragmented time requirements

Nowadays, most users’ time is fragmented, but with the popularization of 4G, users can watch live broadcasts anywhere, no longer restricted by computers, and make full use of fragmented time.

3.2.2 Advanced Requirements

1) Interactive experience needs

Before the rise of the game live streaming industry, users who wanted to watch others play games could only watch game videos. However, the interactivity of game videos is very poor. Often when users leave messages under a video, the author may not respond until three or four days later, resulting in a very poor interactive experience.

2) Demand for the game itself

Some users do not have enough time or money, resulting in their gaming experience not meeting their expectations. Therefore, these users will choose to watch live game broadcasts, so that they can have a good gaming experience without paying a lot of cost.

3) Social needs

One of the main reasons why users watch live broadcasts is that they hope to find friends with similar interests on the game live broadcast platform to play games and socialize together.

4. Product Analysis

4.1 Product Function Analysis

4.2 Major product updates (2012-November 2016)

• In 2012, YY launched its game live streaming business, namely YY Live (the predecessor of Huya Live), becoming the first company in China to launch game live streaming business.
• In November 2014, Huya launched the industry's first 1080P high-definition live broadcast service, capable of supporting millions of users to watch live broadcasts online simultaneously.
• In November 2016, Huya Live officially launched HTML5 live broadcast technology across the entire network. Users enjoy the smooth experience of "watching live broadcast in 1 second".

4.3 Core Functions of the Product

4.3.1 Game Live Streaming

1) Content

Game live streaming is the core business of Huya Live. It is positioned as a barrage-style interactive platform that focuses on game live streaming and covers a variety of live content.

①Develop games with potential

Although the content of Huya Live and Douyu Live is highly overlapping, Huya Live focuses more on some games with development potential. The Huya Live team will analyze whether the game is worth investing in.

When a game with development potential is found, Huya Live will recruit anchors for this game. Then, through the resources and guilds of the Huya platform, we can support these anchors, increase the number of anchors of this game, expand the fan base of the anchors, and make the game more well-known.

Taking the recently popular console game "Fall Guys" as an example, the Huya live streaming platform will recruit anchors in the Fall Guys area. After recruiting a sufficient number of anchors, the platform will introduce some reward measures for the anchors of this game (such as giving the anchors recommendations and the like) and then rank the anchors. The anchors with higher rankings can get recommended positions. The recommended position can make the anchor’s live broadcast room rank higher, making it easier to attract new viewers.

This reward method can form a healthy competitive relationship among anchors, allowing them to find ways to improve the quality of their live broadcasts and attract more viewers. The more viewers there are, the more famous the game will be, and the more famous the game is, the more viewers it will attract. As the cycle continues, more and more people will watch the game, and the number of users on the platform will continue to grow.

According to statistics, from September 1 to September 20, 2020, there were 705 active anchors in the Fall Guys section, with an average of 17,500 active viewers per day and a total of more than 2.6 million barrages.

② Seize the current hot games

The top three games in the current game store rankings are: PlayerUnknown's Battlegrounds, League of Legends, and Honor of Kings (ranked in no particular order)

PlayerUnknown's Battlegrounds: Huya Live signed a contract with the 4AM team in the PlayerUnknown's Battlegrounds division. The 4AM team is the champion of the 2019 PCL Summer Tournament (PCL is the most prestigious PlayerUnknown's Battlegrounds event). In addition, Huya Live has also held many PUBG events such as the "Fat Tiger Cup", "Destiny Cup", and "PUBG Gun God Cup", attracting a large number of PUBG anchors and professional teams to participate.

In the "Destiny Cup" held by Huya Live in 2019, the peak number of viewers once exceeded 7 million, and the "Destiny Cup" was officially recognized by PUBG as the most professional third-party PUBG event in China.

League of Legends: While Huya Live is making great strides in the PlayerUnknown's Battlegrounds section, it is also making big moves in the League of Legends section.

In October 2019, Huya Live won the exclusive broadcasting rights for the League of Legends LCK region. The strength of the League of Legends' LCK region is comparable to that of the domestic LPL region. The competition content is quite exciting. Coupled with the impact of the epidemic, the number of viewers has soared. On May 18, 2020, Riot Games announced the playback data for the LCK Spring Split (February 5-April 25). Although affected by the epidemic, games had to be played without spectators and online, but compared to the 2019 Spring Split, the average daily number of viewers increased by 13.4% to about 4.63 million.

After obtaining the exclusive broadcasting rights for the LCK region, Huya Live also won the broadcasting rights for a large number of overseas events and signed many top domestic League of Legends teams, further completing Huya Live's puzzle piece in the League of Legends.

Honor of Kings: I don’t pay much attention to the live broadcast of the game Honor of Kings, but I still have a general understanding of it. The King of Glory division signed top anchors "Gu Ying" and "Zhang Daxian". It can be seen on the Huya live broadcast platform that Zhang Daxian’s followers have reached more than 18 million, and Gu Ying’s followers have also reached more than 10 million.

While Huya Live is cultivating anchors in the King of Glory section, it is also very good at creating momentum. In August 2018, the King of Glory anchor "Han Ye" and the League of Legends anchor "Du Ji" had a conflict over some things in the game. The conflict escalated and even led to the famous meme "I became the King in s1 using skateboard shoes." This matter was brought up again this year for some reason. This time, Huya Live invited the two anchors to the "Huya Kung Fu Carnival" and let the two anchors compete in real person offline.

When anchor Han Ye and anchor Du Ji were competing against each other, the official popularity statistics of Huya Live showed that it exceeded 20 million.

According to statistics, Huya Live is far ahead in the list of active users of Chinese game live streaming platforms in March 2020 with 31.676 million users.

2) Anchor

In 2018-2019, many high-quality League of Legends anchors from Douyu jumped to Huya, such as the anchor "Wei Shen" from the PlayerUnknown's Battlegrounds division and the 4AM team.

① Douyu Live is not friendly to anchors

Douyu Live’s ability to create stars is very strong, for example, the League of Legends anchor “Feng Timo” and the PlayerUnknown’s Battlegrounds anchor “Damei’er Xiaobawang”... However, in the live broadcast industry, most of the training of new anchors will rely on old anchors to guide the new anchors. This way of training new anchors is very unfriendly to the old anchors.

Former Douyu anchors have revealed issues with the platform owing wages and restricting popularity, and this problem has also led to the loss of many high-quality anchors from Douyu Live. The anchor "Boxer No. 7" revealed that Douyu owed him wages and also hired internet trolls to interfere with his live broadcast. League of Legends commentator Xiaolou revealed that Douyu has been in arrears of 3-6 months' salary for all anchors.

② Huya live broadcast platform and guild double support

Attract new anchors:

In September this year, Huya Live launched the Huya Spark Plan, which is very friendly to new anchors. It provides new anchors with tens of millions of traffic support, 20% commission subsidies, exclusive training plans, massive popularity points, guild recruitment reward recommendation positions, and guild recommended contract advertising positions. The most important thing is that since its establishment, Huya Live has increased the share of new anchors to 70%, while Douyu Live is only 50%.

Huya Live’s guild is a great help to new anchors. Although Douyu Live also has a guild, Huya Live’s guild system is more mature and its management capabilities are also excellent. After a new anchor enters Huya and joins the guild, the guild will guide the new anchor on how to operate his or her own live broadcast room and how to expand his or her popularity. Huya Guild will also use its own resources to support new anchors, and will also provide targeted guidance to new anchors so that they can quickly gain initial audiences.

Keep the old anchor:

Many of Douyu Live's anchors change jobs due to salary issues. The anchor "Northeast Quail" has complained about the problem of low salary on Weibo many times. The anchor "Wuhu Sima"'s previous salary was 11 million or 12 million, while other platforms had 30 million. Now he is negotiating with Douyu for 20 million.

On January 13, 2018, Huya Live signed a contract with former League of Legends professional player UZI. It is rumored that UZI's signing fee reached 35 million.

The Huya Live guild also regularly holds guild competitions to help anchors increase their exposure and improve their popularity. Anchors who achieve outstanding results in guild competitions will also receive additional resource support.

3) Audience

Taking League of Legends as an example, I have summarized the following reasons why viewers watch live broadcasts:

1. If you like a certain anchor, just watch him
2. I like watching professional League of Legends matches.
3. To watch a certain hero and learn the relevant operations of that hero

For viewers who only like to watch a certain host, the problem can be solved by increasing the host's coverage. The Spark Plan launched by Huya Live has attracted a group of new anchors to the platform. At the same time, Huya Live is also actively attracting top anchors from other live broadcast platforms to broadcast on its own platform. Increase the number of users by increasing the anchor coverage.

Huya Live has thoughtfully launched a "Hero" category for viewers who want to watch a specific hero. The system can identify what hero the host is playing, and then classify them under this hero category, so that viewers can easily find the live broadcast room where the hero is played and click in to watch.

4.3.2 Entertainment Live Broadcast

The predecessor of Huya Live is YY Game Live, so the development direction of Huya Live is towards game live streaming. Later, in order to improve the coverage of live broadcast, the category of entertainment live broadcast was added.

In addition, the audience size of game live streaming platforms has continued to increase in recent years, diluting the proportion of viewers watching entertainment live streaming, so entertainment live streaming has developed as a side business for Huya Live.

4.3.3 Monetization Model

According to Huya’s second quarter 2020 financial report (as of June 30, 2020), Huya’s revenue from live streaming was RMB 2.565 billion, and Huya’s revenue from advertising and other businesses was RMB 132 million. Since Huya Live’s revenue is far greater than its advertising and other business revenues, I will analyze Huya Live’s live streaming revenue later in the text.

According to Huya’s financial report, about 95% of Huya’s live broadcast revenue comes from user rewards. Therefore, by analyzing the way Huya Live rewards gifts, we can deduce Huya Live’s main monetization model.

1) Gift Reward

Huya Live provides users with a variety of gift options, with prices ranging from 0.1 yuan to 5,000 yuan, allowing users with different spending abilities to find suitable gift options.

These gifts can be roughly divided into three categories: paid gifts, free gifts, and lottery gifts

① Paid gifts:

Huya Live has a lot of tricks in how it encourages users to give gifts. Huya Live has set up anchor levels for anchors. Anchors with high levels can obtain more resource support from the platform. Therefore, some users will choose to give gifts to their favorite anchors to make the anchors have higher exposure on the platform.

When users send gifts, the gift special effects will be displayed in the live broadcast room. The higher the price of the gift, the cooler the special effects will be and the longer it will stay on the screen. Some high-value gifts will also be displayed on the entire platform, increasing the host's exposure and satisfying the vanity of users who send gifts.

Huya Live also has a PK function. Simply put, the anchor PK is to see which side has more gifts from fans, and the anchor who receives gifts with a higher total value will win. Huya Live will regularly launch PK on the entire platform. The anchors who participate in and win the PK can obtain Huya Live customized fan cards, or rewards such as platform recommendation positions. Huya Live gives users a sense of participation through PK, which makes users want to continue consuming.

② Free gifts:

This is a free gift from Huya Live. When a user sends any gift other than Huya Food to the anchor, the user can get the anchor’s fan card. Users with fan cards can get free Tiger Food gifts every day for reward.

The fan card adopts a check-in upgrade system, which means that you need to give gifts to the anchor every day, otherwise the fan card level will slowly decrease after a period of time; giving gifts to the anchor will upgrade the fan card. The higher the level of the fan card, the brighter the color, and the greater the freedom of choice of barrage color. Huya Live uses the setting of fan cards to encourage users who have fan cards of anchors to form the habit of giving gifts every day.

③ Lucky draw gifts:

These two gifts from Huya Live are available for users to draw. This is very similar to buying lottery tickets. When a user draws a gift and gives it to the anchor, the anchor will give the user cash back. "Zhang 18" is the anchor's cash back rule, that is, after the user gives the anchor the scepter item drawn with a small purple book, the anchor will return cash to the user equivalent to the value of 18 magic books. Because of this high cashback amount, many users were attracted to participate in the lottery.

2) Open Noble

When a user becomes a noble, the anchor will thank the user. After becoming a noble, there are many privileges that ordinary users do not have. The price of opening a noble account ranges from 50 yuan/month to 1,500,000 yuan/month, allowing people with different spending abilities to experience the feeling of opening a noble account. After users activate the nobility account, they will experience a unique entry effect when entering the anchor's live broadcast room. It will also be displayed in the VIP seats.

In order to have a superior experience, some users will choose to activate the noble subscription. Some people also choose to open a noble account in order to have a better interactive experience with the anchor.

3) Guardian

The price for activating the protection service is 66 yuan per month. The mechanisms of the Guardian and Fan Cards are similar and require monthly renewal, otherwise the Guardian qualification will be lost. After activating the guardian, you will receive silver bean returns, VIP seats and other privileges. The returned silver beans can be used to purchase tiger food to reward the anchor, which is also a way for Huya Live to increase user stickiness in disguise.

5. Product Operation Analysis - Gains and Losses of Huya Live

5.1 The success of Huya Live

(1) Good resources

In 2006, there was a game that became extremely popular, that was the famous "World of Warcraft". At that time, World of Warcraft had a dungeon system that required players to work together to complete the dungeon. The number of cooperating players would often reach 25-40. The increase in the number of people made communication a problem.

This problem was resolved in 2008. At that time, YY launched a voice communication system with clear voice quality and stable network, which solved the communication needs of players. Therefore, it was favored by many copy players, which allowed YY to win many users in one fell swoop.

While YY was working on voice, it discovered that these users had the need to sing and chat during breaks in the game, so YY launched a room specifically for singing and chatting. After that, YY continued to enrich its content, launched a series of small games in succession, and then integrated these functions together to become "YY Live".

Afterwards, YY Live began to focus on the show mode, in which the host shows his talents to the audience, and then the audience rewards him with gifts. At the same time, there were many similar live broadcasts, such as the show live broadcast like "Six Rooms".

The time came to 2013. With the popularity of "League of Legends", the number of game users increased. In the same year, YY Live launched software that supports game live streaming, allowing many game players to watch game live streaming. According to statistics, by the end of 2013, YY game live broadcast users exceeded 100 million, with nearly 30 million monthly active users.

YY Game Live relies on Duowan.com, YY Voice, and Duowan Game Box platforms to obtain a lot of game traffic. Therefore, YY Game Live has become the preferred live broadcast location for many retired professional players, professional teams, and grassroots masters. Because YY Game Live had a lot of high-quality anchor resources and no competitors at the time, it gained a large number of user resources. Later, YY Game Live was renamed Huya Live. Huya Live inherited many high-quality resources of YY Game Live, and YY was behind the scenes to support the development of Huya Live.

(2) Good timing

In 2013, League of Legends already had a huge user base in China, and the number of users is still growing rapidly.

YY Game Live seized this opportunity and, relying on its own high-quality platform, recruited numerous anchors and retired professional players at almost zero cost, acquired many high-quality live broadcast resources, and because of the lack of competitors at the time, the entire market was almost monopolized by YY Game Live.

(3) Good team

The product team of Huya Live is very clear about the direction of the product and has formulated a very clear strategy.

1. How to find content providers
2. How to make the content grow dynamically and make the anchor popular
3. How to monetize traffic

They broke down these strategies and made many targeted optimizations to the products. For example, the live broadcast plug-in was translated into Chinese, which lowered the threshold for anchors to start broadcasting; a function for anchors to quickly recall users was developed to help them gain fans faster; anchors were given levels, so that in order for anchors to upgrade, it became natural for fans to spend money...

At the same time, the team also prioritized some of the core demands of users, addressed them one by one, and continuously refined some of the product's functions based on user feedback.

5.2 The failure of Huya Live

(1) Failure to seize the critical opportunity to separate the client

When Huya Live was still called YY Game Live, because it was not an independent brand, YY Game Live had always been built into YY, and the entry steps were cumbersome. This problem led to the loss of many users.

As the potential of the game live streaming industry becomes apparent, many game live streaming platforms have begun to emerge like mushrooms after a rain, including the well-known Douyu Live.

Because Huya Live did not have an independent client and user awareness at the time, it was not as good as Douyu Live in terms of promotion. Because of Douyu Live’s vigorous promotion, users at the time generally believed that Douyu Live = game live, which is an important reason why Douyu Live was able to catch up.

(2) Not giving the anchor enough appeal

In April 2014, when the competition among game live streaming platforms began, League of Legends had become the most popular game in China. Douyu publicly stated that "whoever can get first place in the national server with the name of Douyu will be rewarded with 200,000 yuan." Zhanqi also announced that any player with the name of Zhanqi TV, once entering the strongest king rank, will be rewarded with 20,000 yuan in cash and a contract with an annual salary of 200,000 yuan. In September 2014, it was rumored that Xiaozhi, the top League of Legends anchor, offered a sky-high contract to YY Game Live, but YY Game Live did not agree. Later, Xiaozhi joined Douyu.

Because platforms such as Douyu adopted a money-burning strategy, they snatched up many top anchors in a short period of time, while Huya Live lost many high-quality anchors due to its single anchor income model.

By 2016, with the emergence of more and more live streaming software, Huya Live found itself having to participate in the battle for talent. So in early 2016, Huya poached the top LOL anchor Miss from Longzhu at a high price of 40 million yuan per year, and even poached the more niche Hearthstone anchors Androny and his wife at a sky-high price of 30 million. But in the end, the company was still a step slow in attracting talent, resulting in it being overtaken or even surpassed by latecomers.

6. Huya Live’s “Weapons”

As mentioned in the previous article, since Huya Live fell behind so much in the battle for talent, why was it still able to go public one step ahead of Douyu Live? This has to do with several ultimate "killer weapons" of Huya Live.

6.1 Long-term strategic vision

Because Huya Live had a long-term strategic vision, it did not act in time during the initial battle for talent, and by the time it had to act, it was already too late. However, it is precisely because of this strategic vision that Huya Live became the overlord of the "Honor of Kings" live broadcast project in the second half of 2016.

Huya Live insists on making game live broadcasts its top content, which means that no matter what game it is, as long as it is a game, Huya Live will pay attention to and understand it. It was this idea that allowed Huya Live to capture the explosive growth of mobile games. Among the top ten anchors of Honor of Kings in 2017, five were from Huya. In the "PlayerUnknown's Battlegrounds" which became popular in 2017, Huya Live seized the opportunity and won the victory in the PlayerUnknown's Battlegrounds project again.

6.2 Guild

Guilds are very important to anchors. They can use resources to support anchors and help them promote themselves, which can make anchors in the middle and lower reaches more popular and gain more fans.

Although both Douyu Live and Huya Live have the guild function, the concept of the guild originated from YY after all, so there is still a gap between the quality of the guild on Douyu Live and that on Huya Live. According to data from Q4 2017, 30,000 guilds have reached cooperation with Huya, and the number of anchors broadcasting on the Huya platform has reached a record high of 600,000.

6.3 Good product quality

Huya is the first platform in the industry to launch Blu-ray 8M live broadcast technology. It also has mastered the industry-leading video compression technology. By using machine learning super-resolution technology in the server background, under the same conditions, for videos of the same clarity, the traffic required for Huya live broadcast is only 70%-80% of that of other platforms.

Because Huya is backed by YY, a listed company, it has very strict review of live broadcast content. This is why live broadcast scandals frequently occur on other platforms, but we rarely hear about Huya’s live broadcast scandals.

It is precisely because of these powerful weapons of Huya Live that it has been able to survive in the increasingly fierce industry competition. Huya's prospectus mentioned that it has ranked first in the industry in many data such as average MAU, mobile MAU, and average daily usage time of a single mobile user.

At the same time, the prospectus also cited data from Frost & Sullivan, saying that it ranked first in the industry in terms of average monthly active visitors, average usage time of active users, and number of active anchors.

7. The merger of Douyu and Huya

Recently, there have been rumors of a merger between Huya Live and Douyu Live. In fact, this is not groundless. Tencent has already begun paving the way for the merger of the two platforms.

In 2016, Tencent participated in Douyu's Series B financing together with Sequoia Capital, Nanshan Capital and others. Later, Tencent participated in Douyu's Series C and E financing. As of now, Tencent holds a total of 38% of Douyu’s shares, making it its largest shareholder.

In 2018, Tencent participated in Huya's Series B financing and acquired a 34.6% stake. On April 3, 2020, Tencent purchased corresponding shares from Joyy for US$263 million, thereby obtaining 50.1% of Huya's voting rights and officially controlling Huya.

7.1 Benefits of the merger between Douyu and Huya

(1) Reduce internal struggles between the two parties

In February 2018, Douyu sued anchor Snake Colin for violating the "exclusive cooperation agreement" and subsequently demanded 145 million yuan in compensation from Snake Colin, an amount that shocked the entire live broadcast industry.

In November 2018, anchor Jiang Haitao (Hi Shi) was ordered to pay 49 million yuan in liquidated damages to Huya Live; in December 2019, the court ruled on the job-hopping case of anchor Wei Zhen (Wei Shen), ordering Wei Shen to pay 85.22 million yuan in liquidated damages to Douyu.

(2) Increase your competitiveness

According to the "2020 China Game Live Streaming Industry Market Size and User Scale Analysis", Douyu and Huya currently have a market share of 36.5% and 45.9% respectively, and the market share of other platforms is below 10%. Although Huya Live and Douyu Live have a high market share, their competitors should not be underestimated.

This year, Bilibili spent 800 million yuan to win the three-year exclusive live broadcast rights for the League of Legends Global Finals in China. Those participating in the bidding for the League of Legends event included Huya, Douyu and Penguin Esports. As one of the world's top three e-sports projects, "League of Legends" has a wide audience. According to official news from the League of Legends event, the average number of viewers per minute in the 2019 Global Finals between FPX and G2 reached 21.8 million.

With Bilibili winning the broadcasting rights for the League of Legends S League, it will attract a large amount of traffic, including the audiences of Huya and Douyu. In terms of anchors, Bilibili signed Feng Timo, the former top anchor of Douyu, and Uzi, a well-known League of Legends e-sports player, joined Bilibili. In the first quarter of 2020, Bilibili’s revenue from live streaming and value-added services reached 794 million yuan, a 172% year-on-year increase.

In 2019, Kuaishou launched the “Million Game Creators Support Plan” to attract game anchors. In July this year, Kuaishou introduced 11 celebrity anchors from Chushou, including popular anchors such as Lanyan. In July 2019, Kuaishou released its traffic data for the first time, showing that the number of daily active users of its in-site game live streaming on mobile terminals exceeded 35 million. As of the end of May 2020, the monthly active users of Kuaishou's game live streaming exceeded 220 million. According to financial reports, the monthly active users of Douyu Live were 158 million and Huya Live were 151 million during the same period.

On August 5, 2020, it was reported that Tencent has begun to lead the merger of Douyu and Huya, and believes that the market value of the merged Douyu and Huya will be around US$10 billion.

Influenced by this news, the stock prices of Douyu and Huya soared on the same day. As of the closing, Douyu rose 6.02% and Huya Live rose 7.85%.

(3) Balancing anchor resources

Douyu Live and Huya Live have different strategies for developing anchors. Douyu Live relies on top anchors as the cornerstone of its development. Huya Live, on the other hand, supports a large number of mid-level anchors, and drives the development of the entire platform through the development of mid-level anchors. If the two platforms merge, the anchor resources of both platforms can complement each other, making the development of the platforms healthier.

7.2 Obstacles to the merger of Douyu and Huya

(1) Both parties are listed companies

Both Huya Live and Douyu Live are listed companies. If they were to merge, how would their personnel positions be arranged? How should the interests of both parties be distributed? In addition, Huya Live is backed by the listed company YY Live, which increases the difficulty of the merger.

As mentioned in the previous article, although Tencent has obtained 50.1% of the voting rights of Huya Live, it only holds 38% of the shares of Douyu Live and cannot influence the direction of the entire Douyu platform. Joyy, the company behind Huya, also holds 31.2% of Huya's shares and 43% of the voting rights, and has a strong voice. The merger is bound to have an impact on Joyy's interests, and Joyy's attitude will greatly affect the progress of the merger.

(2) Platform merger issues

Tencent also has Penguin Live under its platform. If Tencent merges Huya and Douyu, will Penguin Live participate in the merger or compete with them in the future?

It is said that the signing fee for Douyu Live's contracted anchor "PDD" is about 400 million yuan, and the signing fee for anchor "Xu Xu Baby" is about 200 million yuan. The sky-high signing fee is due to the competition between the two platforms. When the two platforms merge, although the internal friction of the platforms will be greatly reduced, how will the interests of the anchors be protected?

After the two platforms merge, the anchors and fans of the two platforms will be merged into the same platform. However, homogeneous live broadcast content will cause a reshuffle of the anchors' fan resources. Some anchors may have more and more fans, while some may have fewer and fewer fans.

(3) Boss’s choice

When the two platforms merge, senior executives from both platforms will work within the same platform. At this time, the boss's choice is very critical. If the choice is not appropriate, things like former OPPO vice president Li Bingzhong resigning to create Realme mobile phone will happen.

In 2020, the competition in the live streaming industry has entered the second half. The second half is the era of content platforms. Whether or not a complete high-quality content output platform can be established is the key to the second half of competition in the live streaming industry. The current development direction of live broadcast platforms is generally towards pan-entertainment live broadcast platforms, while the development links of Douyu Live and Huya Live are relatively single. The development of these two platforms is highly dependent on top anchors. In August 2019, when the King of Glory anchor "Zhang Daxian" was broadcasting on Huya, the popularity of his live broadcast room reached 23.3 million.

Douyu Live and Huya Live are themselves extremely money-burning industries, with low user conversion rates and severe lack of monetization capabilities. Douyu Live did not start to make a profit until 2017, while Huya Live did not turn a profit until the end of 2018. The lack of monetization capabilities of the two live streaming platforms is also a serious problem. According to relevant data, Huya Live lost 80 million in 2017, and Douyu Live’s revenue exceeded 4 billion in 2018. Chen Zhou, CEO of YY, once disclosed that YY's revenue reached 8 billion yuan in 2016.

If the two parties merge, the resources of Douyu Live and Huya Live will be complementary and the profit model will be improved. After the merger of the two platforms, they will be more competitive in the game live streaming industry and will create a game live streaming platform with more than 300 million users.

Author: Wangzai2331

Source: Wangzai2331