Once upon a time, when people in China mentioned live streaming, the first thing that came to their mind was game live streaming. Five or six years ago, "game anchors earning millions a month" became an inspirational story of grassroots counterattack on the Internet. Among the live streaming platforms, Douyu and Huya are undoubtedly the top two players.

Until now, Douyu and Huya have firmly held the top two spots in the gaming industry. According to statistics from Mob Research Institute, as of July this year, Huya accounted for 45.9% of the game live broadcast market, while Douyu accounted for 36.5%. The two shared more than 80% of the domestic game live broadcast market.

However, behind the glamorous appearance, Douyu and Huya have fallen into predicaments to varying degrees. Huya’s second quarter financial report shows that Huya’s revenue in the quarter was 2.96 billion yuan, a year-on-year increase of 9.8%, but the net profit attributable to Huya was only 250 million yuan, a decrease of 32% from the same period last year. Douyu’s financial report also shows that the company’s revenue in the second quarter of this year was 2.34 billion yuan, a year-on-year decrease of 6.8%, and it has been in the red for three consecutive quarters, and the loss is still expanding from the previous quarter.

The primary difficulty facing Huya and Douyu is the slowdown in user growth. Currently, Huya has 77.6 million monthly active users on mobile terminals, a year-on-year increase of 2.6%; Douyu has 60.7 million average mobile monthly active users, a year-on-year increase of 3.9%, and the growth rate has clearly reached a bottleneck. In addition, users' willingness to pay is also declining. In the second quarter of this year, the number of paying users of Huya and Douyu decreased by 200,000 and 600,000 respectively.

At the same time, the continuous emergence of competitors has also made Douyu and Huya anxious. In the first quarter of this year, Bilibili's value-added service revenue reached 1.5 billion yuan, an increase of 89% year-on-year, which is largely due to its increased investment in e-sports, live broadcasting and other fields. Due to its complete video community ecosystem, the number of game anchors on Bilibili is also among the highest among all video platforms.

The impact of short videos is even more severe. The person in charge of Kuaishou’s game business once said that in May last year, the monthly active users of Kuaishou’s game live broadcasts exceeded 220 million, which is equivalent to the total of Douyu and Huya, which is a complete “dimensionality reduction attack”.

Douyu and Huya had hoped to create new opportunities through a merger, but the State Administration for Market Regulation’s move has completely eliminated this possibility. But taking a step back, even if the two merge successfully, the common problems and bottlenecks faced by the game live streaming industry, such as user loss and declining user willingness to pay, will still exist.

For Douyu and Huya, it is imperative to open up a new path.

Can cloud gaming become the key to Douyu and Huya’s breakthrough?

In recent years, cloud gaming has definitely become the brightest star in the gaming industry. In addition to being able to break through the limitations of local terminal performance, another major feature of cloud gaming is that it can be integrated with a large number of industries. The live broadcast platform is undoubtedly the most compatible with cloud gaming among the existing media.

The biggest selling point of game live streaming is the interaction between players and anchors, but whether it is barrage communication or voice connection, it is always an interaction outside the game. When cloud games and live streaming are combined, a new gameplay method called "interactive live streaming" can be born, allowing viewers to directly participate in the anchor's game, enhancing user participation and stickiness. For platforms such as Huya and Douyu, this is undoubtedly a top priority.

For games, interactive live broadcasting can expand the boundaries of game content, create new innovative gameplay, and further extend the life of old games. At the same time, interactive live broadcasting can also provide more links for game promotion and can also broaden the links of game development, promotion and operation. Live broadcasting platforms can even use their influence and the unique attributes of cloud games to transform into game publishers, thus moving towards the upstream of the game industry.

Cloud gaming can also bring new payment models to live streaming platforms. Nowadays, both online game time cards and stand-alone game buyouts have been widely accepted by Chinese players. It can be said that there is already a general environment for paying for games in China. For cloud gaming, whether it is selling time, selling games, or Netflix-style paid subscriptions, all of them are payment methods that can be explored, and all three can be run in parallel.

Of course, there are still a large number of free online game players in China, and the long-term bandwidth costs of cloud games determine that it is unlikely to be free to play like some online games and rely on props to make profits. For Douyu and Huya, in the early stage, they may be able to attract traffic by giving away cloud game time for watching live broadcasts, but from a long-term perspective, they still need to innovate their business model.

Douyu and Huya have also begun to take action.

Huya launched YOWA cloud gaming in July last year, and has implemented the "Play Together" function that allows anchors and players to jointly control the game. With the anchor's consent, the audience in the live broadcast room can participate in the anchor's game at any time or even directly operate on behalf of the anchor.

Mobile is also a major battlefield for YOWA. Although cloud games allow players to play console and PC masterpieces on their mobile phones, the limitations of mobile phones in terms of control are still difficult to overcome. To this end, YOWA creatively developed the "facial control" function, which allows facial movements such as opening the mouth, turning the head, and closing the eyes to become new control methods. This solution may seem a bit immature at first glance, but it is also an important exploration in improving the controllability of mobile terminals. If this camera-based control technology can mature, cloud games on large TV screens will also benefit from it.

For the two giants in the game live broadcast industry, their most glorious moments have passed, and the difficulties they face are similar. If they want to break through, the first thing they need to do is to get rid of the constraints of the identity of "game live broadcast platform" and explore more business directions.

According to the "China Cloud Game Market Trend Report (2021)", the compound annual growth rate of China's cloud game market is expected to reach 135% by 2023, and the market size will exceed US$880 million. As a result, countless industry giants have begun to pay attention to this market. Douyu and Huya also regard cloud games as the only way to return to their peak. How to better combine live broadcast business with cloud games and derive more possibilities will be the key to breaking through the difficulties of the two.

The second half of the competition between Douyu and Huya will continue in the cloud.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.