China’s game streaming site Panda TV confirms it will end service amid cash crisis

China’s once high-flying game streaming platform Panda TV has announced it will end its service after the company failed to raise fresh funds to keep operations going in a cash-intensive business.

Founded in 2015 by Wang Sicong, an entrepreneur and son of Chinese tycoon Wang Jianlin, Shanghai-based Panda TV said in a posting on microblogging site Weibo on Friday that it has started a “wandering plan,” asking “engineers to gradually cut off the connection with the mother star,” an apparent reference to China’s recent blockbuster sci-fi movie Wandering Earth, which tells the story of Chinese people saving humanity by moving the planet to another solar system.

A picture attached to the Weibo statement shows the back of a waving panda, with a text bubble saying “Bye.”

The official announcement comes after earlier reports this week that Panda TV would file for bankruptcy and dismiss its 500-strong workforce.

Panda TV’s chief operating officer, Andy Zhang Juyuan, on Thursday sent a message to employees in a WeChat group, saying that the company had been forced to “end” after it failed to inject outside money into the business over the past two years.

A former Panda TV employee, who declined to be identified after losing her job, confirmed Zhang’s message.

Zhang said that high bandwidth costs and rising salaries for streamers were major reasons behind the cash shortage – which mounted despite the platform grossing tens of millions of yuan every day.

“It is regretful but also a wise decision,” he said.

Panda TV did not immediately respond to a request for comment.

As of Friday afternoon, Panda TV’s website was still in operation.

Panda TV raised one billion yuan (US$149 million) in its last financing round in May 2017, led by Shanghai-listed Industrial Securities. In October last year, COO Zhang told Chinese media that the company was considering an initial public offering as early as the first quarter of 2019.

By the end of last year, Panda TV still ranked as China’s No. 3 game streaming network in terms of monthly active users, trailing Tencent-backed Huya and Douyu, according to data firm Jiguang. But in recent months, many high-profile streamers on Panda TV have switched jobs to join the two bigger platforms.

Douyu is planning an IPO in the US following Huya, which went public in May last year, according to several media reports.

Panda TV shot to fame largely thanks to its celebrity founder and CEO Wang Sicong, the flamboyant 31-year-old son of Wang Jianlin, founder of Dalian Wanda Group, China's largest real estate development company.

Last year, Wang Sicong’s debut as an e-sports player on Panda TV attracted over 50 million simultaneous viewers.

Wang also owns Chinese e-sports team Invictus Gaming, which in November won the 2018 League of Legends World Championship as well as the hearts of gamers in China. IG players are among the most popular streamers on Panda TV.

Wang is the largest shareholder in Panda TV with a 40 per cent stake, according to company registration information. Beijing-based software company Qihoo 360 is ranked second with a 19 per cent stake.

China is home to the world’s biggest live streaming user base, with industry revenue expected to grow from 2017’s US$5.5 billion to US$16.5 billion by 2022, according to figures cited by Huya’s filing to the New York Stock Exchange.

Many live streaming platforms still struggle to turn a profit though, as they derive most of their revenue from the sale of virtual gifts to viewers, who buy them to tip their favourite streamers. The cutthroat competition has in recent years edged out smaller players, such as Shanghai-based Quanmin TV, from the market.

The last few hours on Panda TV was all about saying goodbye. “Last night when I laid on the bed, I couldn’t help but cry,” said one LoL streamer with 240,000 followers.