China’s strict Covid-19 control measures, not video game licensing curbs, are wreaking havoc on esports market, insiders say
- Strict pandemic controls make it tough for esports competition organisers to stage offline events, host audiences and communicate with various clubs
- By contrast, esports events in the United States, such as the EVO 2022 Tekken 7 tournament in Las Vegas, have been drawing large audiences
NetEase has held four rounds of competition for Naraka: Bladepoint, an action-adventure battle royale game released last July, but has not been able to sell a single audience ticket to this event so far.
“It is really important for an esports competition to host audiences,” Zhao said. “Through large-scale offline competitions, we would be able to keep close contact with our fans and hear their feedback. It is also a good experience for players to hear fans cheer offline.”
“In the first half of this year, Covid-19 has profoundly affected the development of the esports industry,” said Tang Jiajun, director of the Chinese Esports Working Council, which is the country’s semi-official esports industry association.
“It is difficult to carry out offline events and activities,” Tang said, adding that “supply of esports content, public opinion influence and commercial income have all been impacted to varying degrees”.
From January to June, the revenue of China’s esports market decreased 10.12 per cent year on year to 76.5 billion yuan (US$11.31 billion), its first decline in five years, according to data from the country’s semi-official esports industry association.
Income generated from live streaming, tournaments and esports clubs slid 2 per cent, compared with growth of 23.7 per cent in the same period last year. The local esports market counted a base of 487.4 million consumers in the first half of this year.
Shanghai, which hosted about 40 per cent of esports competitions in the first half of this year, went under a citywide lockdown from April to June that affected its entire 25 million population. Although the lockdown ended in July, stringent Covid-19 control measures remained in place.
NetEase’s Zhao said that almost all communications for the Naraka: Bladepoint tournament had to be conducted online because most esports clubs are based in Shanghai. The process was “quite time-consuming compared with face-to-face meeting”, Zhao said.
On the video gaming regulator’s slower pace of approving new titles, Zhao said the situation has not made any substantial difference to the staging of local esports tournaments.
“Esports mostly rely on games that are already published, so the slowdown in new game licences has had little effect,” Zhao said.