What kind of market is e-sports that even Wang Sicong is attracted to?

On the afternoon of May 11, it was pouring rain in Guangzhou. However, the tickets for the global e-sports event WCA at the Guangzhou Game Expo were sold out, and fans were enthusiastic, shouting "nice" one after another.

However, the only reason that really made the audience and players come in the rain was not the excitement of the competition, nor the star effect of Anglababy's endorsement, but the WCA champion fund pool of up to 100 million yuan. In addition, Wang Sicong set up an e-sports team for a year and made more than 1 million yuan for fun, and the e-sports goddess Xiao Cang's monthly salary for anchors exceeded 1 million yuan. The naked "money temptation" quickly brought this high-cold industry of "making gaming a profession" into the public eye.

There is another side to prosperity. WCG, which was popular for 14 years, fell rapidly due to Samsung's withdrawal of investment. Where does the money come from and where does it go? Who will be the final winner of the relay race of prosperity in the e-sports industry?

[On stage] “This is an exclusive market”

May 11th is the third day of the Guangzhou International Game Expo, and also the day of the global e-sports event WCA Carnival. Perhaps because of the presence of spokesperson Angelababy, e-sports stars SKY, Strawberry, Lin Xiongmao and other celebrities, the audience and media areas have already been crowded. The slogan "World Competition·Heroes' Arena, Players' Dreamland" was displayed on both sides of the main stage. Compared with 2014, the prize money of the 2015 WCA event has quadrupled to an astonishing 100 million yuan championship fund pool. Traditional e-sports competitions have added "League of Legends" and "Heroes of the Storm" on the basis of last year's 5 events (Dota2, Hearthstone, CrossFire, World of Tanks, War3).

A contestant of "Warcraft" told the reporter that he had been waiting for two or three hours on the sidelines, but he was not there to see Anglababy, but for the huge prize money. "Warcraft" was released by Blizzard Entertainment in the United States in 2003. It was once the leading game in the market, and the entire industry chain revolved around it. SK Y (Li Xiaofeng) became a benchmark figure for Chinese e-sports players after winning the WCG Warcraft championship twice.

But now, "Warcraft" is no longer the most popular game. Just like it replaced "Starcraft" in the past, Warcraft has been dethroned by the new generation competitive game "League of Legends". Similarly, because it gathered many classic games such as "Starcraft", "Warcraft", and "Counter-Strike (CS)", WCG was once popular all over the world. At its peak, it attracted more than 4,000 professional players and millions of viewers from all over the world. But such an "Olympic Games" in the e-sports industry came to an abrupt end in 2014 because the main sponsor Samsung withdrew its investment.

"If WCG had not been discontinued, no one would be able to take up this banner. E-sports comprehensive events would be like the NBA. The public can only accept one. This is a completely exclusive market." He Miao, vice chairman of WCA's controlling shareholder Jinya Technology, told Nandu reporters that since 2014, WCA, WECG and other e-sports event operators claiming to "take over from WCG" have begun to emerge, and there can only be one winner at the end of this relay race.

[Behind the scenes] E-sports events cost hundreds of millions

How much does it cost to organize an e-sports event? "2014 was the first year of WCA. It took two and a half months to prepare and four days of competition, which cost 70 million yuan. In addition to the implementation costs, it also includes promotion costs. This also accounts for about 1/3 of the cost." WCA spokesperson Mao Kankan told Nandu reporters that this year's WCA event lasted 278 days, which is longer, but it was mainly live broadcast online, so the cost was not obvious. The cost of the four live open tournaments should be comparable to last year. The biggest cost change comes from the prize pool. This year's WCA prize pool reached 100 million yuan, equivalent to more than 60% of the total expenditure.

But in fact, "the prize pool is the most direct reflection of the status of e-sports events. It determines the value of the players and their attractiveness." An e-sports industry insider told Nandu reporters that for e-sports events, offering a record-breaking fund pool is an option to achieve marketing effects. From the perspective of the e-sports ecosystem, this is always an industry that can only survive by standing at the top of the pyramid. Only professional players at the championship level have the opportunity to maintain income growth after retirement. In other words, basic issues such as per capita prize money and popularity are also issues that e-sports event organizers have to consider.

On October 31, 2003, e-sports became the 99th official sport officially recognized by the General Administration of Sport of China. However, it was not until around 2011 that Wang Sicong formed an e-sports team, and this industry of "making gaming a profession" really entered the public eye. At that time, Wang Sicong doubled the salary of the club members, making the monthly salary of professional players go from thousands of yuan to tens of thousands of yuan. Since then, this market has continued to heat up, and the current monthly salary of e-sports goddess Xiao Cang as a host has exceeded one million yuan.

Of course, "no matter how much money the e-sports anchors and players make, it is only a niche market." Youku Tudou's Li Wei said that in the traffic share on Youku Tudou, games account for the majority, and there are many anchors who earn hundreds of thousands or millions of yuan in revenue every year. Among the top ten anchors, six are game anchors, but they have been these six for many years. "They have reached the ceiling of this industry, and what they need is to get out of this circle and enter new fields. This can also make room for new entrants to rise."

In addition, "As a type of sports event, live broadcast is the main source of viewership for e-sports, but on-demand viewing is the main channel for accumulating advertising value. How to develop the commercial value of live broadcast is also a problem, because it is difficult to get ordinary users to pay to watch a certain game." Chen Yi, vice president of Youku Tudou, further explained to Nandu reporters.

[Sequel] Will mobile games become a new driving force?

The more core issue is that once capital enthusiasm cools again, where should the e-sports circle, which has not found a stable business model, look for new development momentum?

"Mobile e-sports is definitely the trend of the future." He Miao, vice chairman of Jinya Technology, told Nandu reporters that this year's WCA has absorbed three mobile games such as "Hearthstone" and three chess and card games such as Landlord and Three Kingdoms. This is also the first time that the e-sports circle has set mobile products as official competition events. What WCG failed to accomplish two years ago, WCA has begun to try.

"The Koreans who operated WCG at the time thought that mobile games were not e-sports projects and were too low-end. We once poached their entire team, including the CEO, but we couldn't convince them, so we had to do it alone." Mao Kankan further explained that mobile games are obviously different from traditional e-sports PC games. PC games may mainly pursue the audience's enjoyment, and the significance of the comprehensive competitions of PC games is to extend the life of professional players. Mobile games emphasize the sense of participation of all people. For example, when the "Three Kingdoms Kill" competition started this year, the number of active users in the same period was 17 times that of last year's PC game competition.

In addition, mobile games are also designed to increase revenue. "We can jointly operate mobile games. Although there are no 'RMB players' who buy props in the competition to ensure the fairness of the competition, many players are willing to pay for 'tickets' in the qualifying rounds." Mao Kankan gave an example, saying that last year a player recharged 200,000 yuan in order to win a ticket to participate in the guild war. "Joint operation income accounts for 2/3 of this year's total revenue, and the proportion will be even higher in the future."

When the WCA Guangzhou Tournament kicked off on May 11, WCA also launched the "WCA plus" growth plan with Taobao Games, hoping to build an e-sports ecosystem. Mao Kankan frankly said that the purpose of launching this plan was to retain "people". The stickiness of fans in the e-sports industry is very high. "People are the core. If people stay here, advertising will be easier."

[Explanation of terms]

E-sports is an intellectual competition between people that uses high-tech hardware and software as sports equipment.

[Case Analysis]

The Tragedy of WCG

E-sports is a circle of fame and fortune, where money is made quickly but spent even faster.

Industry insiders told Nandu reporters that because the prize money of e-sports competitions basically all goes to the players, the operators can only rely on their own sponsors, commercial activities, capital operations and other means to raise funds. This sponsor "supply" model has made e-sports events glorious, but also ultimately ruined their youth.

We have to mention WCG. Every year, WCG spends hundreds of thousands of dollars on the prize pool alone, plus expensive broadcasting equipment and staffing, the investment is close to a sky-high price. Samsung accounts for 80% of the sponsorship fee, but does not make a penny. "For Samsung, WCG is also an important marketing window. In the early 21st century, Samsung's main product was large-screen monitors, and e-sports was undoubtedly the window that best reflected its performance." Xu Ruzao, the head of the e-sports club "Dynamic House", once told reporters, "Around 2008, smartphones began to rise, and Samsung shifted its focus to the small-screen market. The importance of WCG has been declining, which also doomed its future fate."

Similarly, in 2005, Microsoft increased its investment in WCG in order to promote its XBOX console games. However, after 2011, XBOX's strategic position in Microsoft Group gradually declined, and its sponsorship fee also decreased year by year. The last WCG was held in 2013. At that time, 7 out of 10 PC games were from Tencent, and it was collectively complained by veteran fans as "Tencent Carnival". Naturally, under the pressure from both sponsors and audiences, WCG had no choice but to say goodbye.

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.