Alibaba makes a play to get into booming e-sports sector

Prize money of US$5.5 million is up for grabs in the AliSports World Electronic Sport Games, as internet giant seeks entry into this lucrative and expanding world

PUBLISHED : Thursday, 07 April, 2016, 6:01am
UPDATED : Monday, 19 June, 2017, 12:34pm

Chinese e-commerce giant Alibaba will kick off a global e-sports tournament this month, with big prize money up for grabs, as the internet powerhouse makes a play for this fast-growing industry.

Alibaba signed an agreement last week with Singapore-based social networking firm YuuZoo to run the firm’s e-sports events in China, including the AliSports World Electronic Sport Games (WESG) kicking off at the end of April and which will offer a total of US$5.5 million in prize money.

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Formed in September, AliSports is spearheading Alibaba’s bid to boost its share of China’s lucrative sports industry, both digital and traditional, which is forecast to grow to US$814 billion by 2025.

“Sports is a multibillion-dollar business in China, with massive growth potential. That is why Alibaba is investing heavily in this vertical,” AliSports chief executive Zhang Dazhong said in a statement on the YuuZoo website.

Marking its entry into the e-sports arena, AliSports will spend US$15.4 million alone for the WESG, which will be run by YuuZoo’s Chinese venture YuuGames. Players from across the world will compete in games like Dota 2, Counter-Strike: Global Offensive, StarCraft II and Hearthstone.

E-sports generally refers to video game competitions which, like athletic sporting events, can be played before live audiences and broadcast over the internet.

They originate with video games played in public arcades in the 1980s, and have gradually grown into bigger tournaments as faster internet connections allowed players to compete with each other wherever they might be in the world.

“We are confident that we can make Alibaba’s World Electronic Sport Games a hugely successful and leading event in China’s massive gaming market,” says YuuZoo and YuuGames chairman Thomas Zilliacus.

A YuuZoo spokesman says the games will start in the third or fourth week of this month, with the finals set for November 11.

YuuGames, founded in October 2014, is a leading organiser of e-sport events in China. It plans to launch 1,200 e-sports events this year across 15 cities in China in partnership with AliSports.

SuperData, which provides statistics on the global computer games market, says the e-sport market worldwide was valued at US$747.5 million last year.

Brand advertising accounts for 77 per cent of the market, with the rest made up by e-sports betting, prize pools, and amateur and micro-tournaments as well as merchandise and ticket sales, SuperData says.

The market is expected to grow to US$1.9 billion by 2018, driven by growth in direct revenue sources like betting sites and amateur tournament platforms, it adds.

Viewership was expected to have grown to 188 million in 2015, turning players and teams into celebrities, it says.

Alibaba and YuuZoo announced the agreement last Wednesday in Shanghai, the Singapore-listed firm said in a statement posted on its website.

Alibaba, which owns the South China Morning Post, is China’s top e-commerce firm, and was founded by billionaire internet entrepreneur Jack Ma.