China Esports Weekly: Chinese Anti-Monopoly Authority Terminates Douyu-Huya Merger, BYD Auto Sponsors eStar.Pro

byd
(Source: BYD)

Last week was significant for the esports industry in China as the Chinese anti-monopoly authority terminated the merger between China’s two largest gaming live streaming companies – Douyu and Huya. Both live streaming platforms are controlled by Chinese conglomerate Tencent Holdings, and Tencent would have had a 70% market share of the live stream gaming sector if the merger had gone ahead.

In addition, China’s esports industry also saw few sponsorships take place, including one sponsorship from a Chinese new-energy vehicle and another non-endemic sponsorship deal from a U.S. sports fitness company.

Other top stories in China’s esports industry include:

-Reuters reported that Wuhan-based Estar Gaming Victory Five (ESV5) is merging with Sweden-based esports organization Ninjas in Pyjamas;

-Esports production company Imba TV signed an exclusive partnership deal with Huya;

-Hyperice signed a sponsorship deal with Chinese esports organization Bilibili Gaming (BLG);

-Tencent TiMi Studio Group revealed the distribution of prize money for its Honor of Kings World Champion Cup competiton.

China State Market Regulatory Authority Terminates Douyu-Huya Merger Due to Anti-Monopoly Investigation

On July 10, the China State Market Regulation Authority (SAMR) announced that the merger of Chinese live streaming platforms Douyu and Huya would be terminated following an anti-monopoly investigation. Led by Tencent, the merger was expected to have a 70% market share in the Chinese live stream gaming area.

“We will conscientiously abide by the decision, actively comply with all regulatory requirements, operate in compliance with laws and regulations, and earnestly fulfill our social responsibilities,” Tencent stated.

In addition, the boards of directors of Huya and Douyu canceled the approval of a cash dividend compensation for the merger, which would have been about $200 million for Huya shareholders and $60 million for Douyu shareholders.

The merger of Douyu and Huya was a key move by Tencent to defend its lead position in the live streaming sphere from ByteDance’s Douyin and Bilibili. In fact, Tencent also planned to add its own live stream gaming platform, Penguin Esports, into Douyu through a $500 million agreement.

SEE ALSO: China’s Top Market Regulator Bans Merger of Tencent’s Video Game Streamers Huya, DouYu

In May, Douyu and Huya released their Q1 financial reports, the companies had a combined revenue of $740 million.

Three days after the termination of the merger, Huya announced that it signed an exclusive partnership deal with Chinese esports production company ImbaTV. The partnership is expected to reinforce Huya’s esports content on Dota 2, CS:GO, and PUBG competitions. ImbaTV’s tournament hosting business mainly focuses on Valve’s iconic esports products, Dota 2 and CS:GO. The company also co-owns the Dota 2 tournament brand Starladder ImbaTV League (SL-i League) with Ukrainian tournament organizer, Starladder.

In regard to PUBG, having a third-party tournament organizer host the competition in China may be more problematic than at first sight, considering the PC version of the game has not received game approval in the country.

Therefore, the exclusive deal between Huya and ImbaTV also reflects Huya’s attitude toward Douyu, a relationship that has gone from ally to competitor. Huya now also owns an exclusive five-year media rights deal for the League of Legends Pro League (LPL), League of Legends Development League (LDL), and the game’s All-Star events.

BYD Auto Sponsors KPL Team eStar.Pro

On July 15, the Chinese automotive company BYD announced that it signed a sponsorship deal with Wuhan-based King Pro League (KPL) team, eStar.Pro, acting as the team’s strategic automotive partner.

eStar.Pro is the Honor of Kings division of Chinese esports company Estar Gaming Victory Five (ESV5). In 2020, Wuhan-based Estar Gaming merged with Shenzhen-based Victory Five and established the joint venture, ESV5, in Wuhan. Since any one company can have only one team in the LPL, Estar Gaming sold its LPL franchise slot to Guangzhou Neking Group, and rebranded to UP. Victory Five kept its slot in LPL.

It should be noted that BYD is also the automotive sponsor of Victory Five. In Honor of Kings history, eStar.Pro was the best team having won multiple KPL champions, as well as the 2019 Honor of Kings World Champion Cup.

BYD Auto now mainly focuses on new energy vehicle manufacturing. Recently, BYD reported that the company sold 51,015 vehicles in June. 81.1% of those sales came from new energy vehicles while 18.9% of sales were from oil-fueled vehicles.

Other Esports Business News:

  • On July 9, Reuters reported that the Swedish esports organization Ninjas in Pyjamas is planning to merge with Chinese esports company ESV5. A source told Reuters that the companies project a “combined revenue of more than ¥400 million yuan ($62 million) for 2021.”
  • On July 15, the U.S. sports fitness company Hyperice announced that it signed a sponsorship deal with Chinese LPL team Bilibili Gaming (BLG), becoming the recovery technology partner of the team. Neither the financial terms of the deal nor the duration of the deal were disclosed.
  • On July 14, Tencent’s TiMi Studio Group released the prize pool distribution rules of this year’s Honor of Kings World Champion Cup (KCC). The event will feature a total od ¥50 million ($7.74 million) in prize money, the champion alone will take home ¥21 million yuan ($3.25 million) which equates to about 42% of the total prize money, while second place will take home only¥8 million ($1.24 million), or 16% of the total prize pool.