Tencent invests in Douyu: Will it become the next Dragon Ball?

Source: Sina Technology Original title: Tencent invests in Douyu: Will it become the next Dragon Ball?

There is never a shortage of eyeballs in China’s game live streaming industry.

From the predecessors Douyu and Zhanqi to the up-and-coming Huya and Panda, China's game live streaming industry has risen strongly relying on e-sports. However, due to the lack of regulations in the industry and the negative effects brought about by large amounts of capital injection, there have been constant controversies and fights between platforms have been staged repeatedly.

Recently there was news that Tencent has decided to invest tens of millions of dollars in Douyu. According to a source close to the transaction who revealed to Sina Technology, Tencent's investment in Douyu will account for about 20%.

In fact, Tencent already has the game live broadcast platform Longzhu, but it seems that it still has not lost its enthusiasm for the live broadcast market. So if Douyu joins, where will Longzhu go? Will Douyu become the next Longzhu?

Tencent may release Dragon Ball and keep Douyu

At present, all these phenomena have confirmed Tencent's acquisition of Douyu. However, for the existing Longzhu, how to deal with the homogeneity between the two live broadcast platforms has become a new problem that Tencent needs to solve. Looking at the homepage of Longzhu Live, the recommended live broadcasts, in addition to beauties, are mainly Tencent's games such as League of Legends, CrossFire, and Dungeon Fighter.

Other games, such as Hearthstone, Heroes of the Storm, Diablo III, StarCraft 2, etc., all appear at very low positions, and there is not even any category for competing works such as CD and Dota 2.

Sina Technology found that even as late as eight o'clock, the number of online users of games other than Tencent was around double digits.

A person close to Tencent Games said that at present, Longzhu does not promote live broadcasts of games other than Tencent games, which has caused many anchors of games other than Tencent games to not choose the Longzhu platform.

In addition, Sina Technology found that the cooperation between Tencent and Longzhu Live, apart from capital involvement, event broadcasting, and technical support, did not implant interfaces in QQ and WeChat, nor did it open entrances in Tencent games. The two parties basically did not cooperate in traffic conversion, promotion, and marketing.

Due to the limitations on game content and insufficient promotion, Dragon Ball has not been able to surpass the giants Douyu, Zhanqi, and Huya.

At present, Douyu's advantage lies in content. In addition to League of Legends, non-Tencent games such as Dota 2, StarCraft 2, and CS: GO are its main competitive advantages. Take Dota 2, a competitor of League of Legends, for example. Although it has suffered from problems such as anchors leaving, there are still star professional players such as Xiao 8 and YYF, as well as popular anchors such as Leng Leng on the platform.

Data from foreign research website E-sprots earnings show that although the number of League of Legends events and professional players in 2015 was twice that of Dota 2, the total prize money was only half of that of Dota 2. The more commercially valuable Dota 2 event broadcasts are also one of Douyu's important resources.

However, if Tencent acquires a stake in Douyu, it may kill Douyu's e-sports live broadcasting except for Tencent, greatly weakening the competitiveness of previous e-sports live broadcasting and turning Douyu into a replica of Longzhu. However, there are also reports that Tencent's acquisition of a stake in Douyu is to sell Longzhu.

Douyu faces pressure and seeks a way out

As early as the second half of 2014, there were rumors that Tencent invested in Douyu. According to sources, the investment ended in vain because the price was not agreed upon. However, this year, Douyu has been exposed to problems such as cash flow crisis, data fraud, suppression of popular anchors, and signing contracts with shell companies.

In addition, some famous anchors collectively switched to other live broadcast platforms, and the target of the job was Tencent's Longzhu platform, which later triggered a lawsuit between Douyu and several anchors who jumped ship. It caused quite a stir. At that time, Douyu also bluntly stated that there was someone behind the scenes directing it, and some industry insiders also analyzed that Tencent was the main driving force behind this, intending to use this opportunity to enter the live broadcast platform.

In addition, a large number of video live streaming platforms have emerged in China in the past two years. This year, Huya invested 700 million yuan to develop its game live streaming website "Huya Live". At the same time, Wang Sicong also said on Weibo that he would serve as the CEO of the newly established game live streaming platform Panda TV. In addition, the total investment of Zhanqi TV, Longzhu Live and other platforms has exceeded 100 million US dollars.

While Douyu was fighting fiercely with Huya and Zhanqi, it turned around and found that new generations like Panda TV were eyeing it. After a year of competition, China's game live streaming industry is still in chaos.

An industry insider in e-sports live streaming who wishes to remain anonymous said that after less than two years of development, Douyu has grown to its current size by trading speed for space and using capital to boost its growth. In the process of development, all problems gave way to rapid development, but the lack of capital caused some problems to break out prematurely, catching it off guard. In order to solve these problems, Douyu needs to seek a new backer, and Tencent may be the best choice.

Game live broadcast that helps people in need

Although, according to iResearch's report, the total revenue of the Chinese game market in 2014 was RMB 110.81 billion, Tencent accounted for half of the Chinese game market with a revenue of RMB 44.81 billion. Globally, Dutch market research company Newzoo pointed out that Tencent surpassed the four giants Sony, Microsoft, EA, and Blizzard with a revenue of US$7.2 billion in 2014, and surpassed the second-place Sony by as much as US$1.2 billion.

However, according to Tencent's second quarter financial report this year, game revenue was 12.97 billion yuan, and online game revenue slowed to 17%, compared with 28% in the first quarter. The growth rate of mobile game revenue also dropped from 82% in the first quarter to 11%, and Tencent's games have slowed down significantly. The reason for the slowdown in game revenue growth is that Tencent's advantage is not in game development, regardless of the era of terminal games, web games, or mobile games. Compared with Blizzard, EA developers, and Sony and Microsoft hardware giants, Tencent's advantage lies in the two major entrances of QQ on the PC side and WeChat on the mobile side.

However, with the development of mobile Internet, the essence of WeChat has shifted towards social networking. JD CMO Lan Ye once said at the second JD Think Tank that everyone overestimates the power of WeChat as an entry point, and the conversion rate of WeChat is not high. Long Wei, co-founder of Dianping, also expressed the same view at the China Internet Conference last year. With Dota Legend and Fantasy Westward Journey breaking the dominance of Tencent mobile games on the App Store, Tencent has a large number of users, but the conversion rate is declining.

As game revenue growth slows down and entry capabilities weaken, the live streaming platform as a game entry point has become the next market that Tencent needs to seize.

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.