Chinese cities buy into US$5.5m ‘Olympic Games for esports’ as Alibaba strengthens partnerships

Inaugural World Electronic Sports Games cost e-commerce giant 150 million yuan, but attracted around four million players

PUBLISHED : Wednesday, 19 July, 2017, 3:33pm
UPDATED : Wednesday, 19 July, 2017, 10:22pm

Alibaba will seek to break even with their second World Electronic Sports Games tournament after the e-commerce giant pumped in around 150 million yuan into the inaugural series, which aspires to becoming the Olympic Games for esports.

Wang Guan, esports general manager at Alisports, which is the sports arm of Alibaba, said the preliminary phase of the second World Electronic Sports Games (WESG) was already under way in 20 cities across China ahead of the finals which are set to take place early next year.

Wang said the first tournament, which claims to have involved players from over 120 countries, cost the company in the region of 150 million yuan (HK$173 million) after culminating with the finals in Shanghai in January 2017.

“We lost about 60 to 70 per cent of that lump of money,” he said. “But we reached about four million players.”

He said the cost this year had been reduced by around 73 per cent because, rather than organising the championship itself, Alisports has switched to partnering with host cities.

“We had over 30 applicant cities and we ended up with 20 cities for this year,” he said. “We provide the prize money and most of the working staff. The cities chip in to host their local games.”

According to Wang, the organisers in these cities range from government-backed organisations to sports companies and developers.

Gamers are required to appear at a venue to play fellow competitors in Dota2, Starcraft 2, CS:GO, Hearthstone and Battle of Balls as they compete for the same US$5.5 million prize money on offer as last year.

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Wang said WESG was a third-party esports tournament since Alibaba neither owned nor operated any of the esports games.

“We don’t expect to make much money from hosting these tournaments because we are the third party,” he said.

Tournaments hosted by game developers are much more lucrative because developers can profit from selling more games or in-game items, even if the tournaments themselves were not profitable, Wang added.

“But we are only here to provide service for gamers as a third party which is dedicated in building a platform,” he said.

“We are trying to separate leisure gaming from esports. That’s why we are gathering people in a physical place to play with one another.”

The world spends US$109 billion on video games, and the Chinese are the biggest players

Wang said tournaments in many other countries, ranging from Russia to South Africa, were also held offline and in person.

For some countries, tournaments are held online given the difficulty to physically gather gamers together.

Wang revealed esports accounts for 40 per cent of the Alisports operation, with hopes the ratio could rise to about 50 per cent.

Alibaba owns the South China Morning Post