The Story of Chinese E-Sports: Industry, Policy and Social Stigma

“Stand up! Those who refuse to be slaves!
With our flesh and blood, let’s build our newest Great Wall!
…
Braving the enemies’ fire, march on!
March on! March on! on!”

It was midnight in China’s southwestern city of Chongqing. The melody of the Chinese national anthem – spirited and fiery – rose from a crowd of hundreds of students who had their fists in the air. More were marching around the campus, chanting and singing.

Next to a dormitory building, two security guards pinned down a student holding a huge black flag that read “EDG.” Instead of resisting, the student appeared content to lie down on the ground, but still held the flagpole tightly with his legs to keep it upright. An onlooker off-camera applauded, “His body fell, but the flag won’t fall!”

Hold on a bit if you think this is another nationalist protest in China. No, students were celebrating the victory of EDG (Edward Gaming), an eSports team funded by Chinese real estate developer Hopson, at the League of Legends World Championship in Reykjavík, Iceland. On Chinese video-sharing platform bilibili.com, the livestream of the game’s final round – which took place around 12:30 a.m. Beijing time on November 7 – attracted more than 550 million audience members at its peak, accounting for about one third of China’s population. Young people all over the country went crazy at EDG’s victory, with students screaming out of joy from their dormitory rooms and thousands of people shouting “EDG Bravo!” (”EDG 牛逼!”) on the street. Interspersed with the frenzied celebrations were confused complaints of the middle-aged: “I don’t care who EDG is. I just want to sleep.”

The victory of EDG was so huge that they received almost immediate congratulation from China’s state media CCTV on Weibo. The hashtag “EGD wins”(#EDG夺冠#), created by CCTV, received nearly 1 billion views within one hour. Just two months ago, however, it was also CCTV that announced the government’s latest regulations of video games, which, dubbed as “anti-addiction” measures, limit the time under-18s can spend on gaming to three hours per week, making it the most strict governmental regulation on gaming in the world.

To some extent, the wavering position CCTV took in regards to eSports and gaming mirrors the dilemma that the Chinese government struggles with when approaching the industry. On one hand, eSports offer huge economic potential and fit well with the government’s techno-nationalist agenda, while on the other hand they are closely related to online gaming, a form of entertainment that has long been rejected by Chinese parents as “electronic heroin.”

For this article, Pandaily interviewed gamers, eSports fans, scholars, as well as those who work within the industry to explore how eSports, with a socially constructed stigma since its inception, has grown into the huge industry it is today. The development of eSports in China also makes a case of the ways in which different stakeholders from government agencies, corporate enterprises to individual players and fans interact, compete and cooperate with each other to facilitate the rise of a new form of sport and an industry plagued by public controversy. By examining the history of Chinese eSports and the dynamics among various interest groups, our analysis invites readers to reconsider the use of the oversimplified term “authoritarian/communist China” to approach the Chinese case of digital economy and its governance.

Early 2000s: The Dark Age

For anyone who wants to delve into the history of Chinese eSports, the difference between eSports and gaming is an inescapable question, which also lies at the heart of the controversy that the industry has been struggling with for over two decades. To put it simply, eSports is the product of competitive games placed within the framework of modern sports, characterised by tournaments and their commercialization. While the core of the game industry is games as a product and service, which generally includes the production, distribution, and operation of games, profitable through players’ constantly paying, the eSports industry emerges when a competitive game becomes influential, surrounding which sports and entertainment industries get involved by organizing and promoting tournaments. In other words, the eSports industry is best understood as the intersection of games, sports and entertainment industries.

The difference between games and eSports may be obvious for industry insiders, but for the general public and, as shall be demonstrated later in this article, even among some government officials, the two are often interchangeably used. Confusion of the two concepts among the public and policymakers underpins the development trajectory of the Chinese eSports industry.

Ask anyone in China who grew up playing video games around early 2000s and they’d mention an article published in the party-affiliated newspaper Guangming Daily on May 9, 2000. Titled “Computer Games, the Electronic Heroin Targeting Children,” the article presented an alarming picture of delinquent teenagers skipping school to play computer games in underground internet cafes, with one interviewee claiming that “the only result for these children is that boys end up becoming robbers and thieves, girls end up becoming prostitutes.” The article voiced the widespread moral anxiety among Chinese parents regarding video games, as well as the internet in general. The government in Wuhan, where the undercover reportage took place, responded the next day following the article’s publishment by launching a crackdown on computer games with “thunderboterous measures.” In 2001, the author received a prize in the “China News Awards,” and the article was selected for a textbook edited by Renmin University, one of China’s top universities. Among Chinese video games players, however, this article is widely regarded as “the root of evil” as it not only paved the way for a sweeping national ban on video games, it also produced the stigma of “electronic heroin” that would last for the next two decades until this day.

To make things worse, in the aftermath of a deadly 2002 fire set by four teenagers to an internet cafe in Beijing, killing 25 people, the Chinese government launched an unprecedentedly harsh crackdown where thousands of internet cafes and game centers around the country were shut down, with video game equipment and accessories banned.

In his book A Brief History of eSports: From Video Games to Sport, Dai Yanmiao pointed out the significance of internet cafes as the incubators of the earlist eSports teams in China. “Small public spaces like internet cafes provided convenience for the formation of teams…A group of friends gathering together to fight a battle was an early taste of professional eSports teams.” Liu Yang, or “BBKinG,” as he is known within the Chinese eSports community, is a veteran player and the manager of one of China’s earliest eSports teams “WE.” Recounting the early days of Chinese eSports, he similarly recalled the flourishing of eSports teams in internet cafes around 2000. “Every internet cafe was funding a semi-professional team. Walk in any internet cafe, and you’d see a wall with photos and introduction of the cafe’s team.” The crackdown on internet cafes across the country was therefore a heavy blow to not only the gaming industry but also China’s emerging eSports community. Furthermore, public outrage and official disapproval voiced through mainstream media added yet another layer of stigma for eSports players on top of the accusation of game addiction: eSports players were troublemakers hiding in illegal internet cafes.

Indeed, as research by Chinese scholars Zhao Yupei and Zhu Yimei reveals, the period between 1999 and 2003 is widely remembered as the “dark age of riff-raff” among Chinese eSports players, with “memories of tough experiences and low quality of life” due to negative public perception surrounding video games. “The boundary between professional and non-professional [players] was not quite clear-cut at that time,” said a retired Arena of Valor player from Beijing. In the following 20 years or so, these stigmas will be constantly pulled out by conservative opinion leaders, worried parents and many others, to support their various arguments against eSports.

On the policy side, 2003 marked a turning point for the industry, when eSports was recognized by China’s General Administration of Sport as the country’s 99th competitive sport, officially setting it apart from “games.” The policy shift from cracking down on video games to officially acknowledging the positive attributes of eSports seems confusing: How could an activity essentially built upon “electronic heroin” in official discourse suddenly receive approval from the highest authority regulating sports in China?

More confusing is another policy U-turn in 2004. In April 17, 2004, the All-China Sports Federation, a non-governmental organization regulated by China’s General Administration of Sport, held the country’s first national eSports games, CEG (China E-sports Games). Three days later, however, the State Administration of Press, Publication, Radio, Film, and Television (SAPPRFT) banned all digital TV channels including China Central Television (CCTV) from broadcasting eSports-related content. Zhao Yupei, an eSports scholar from Zhejiang University, told Pandaily that purging eSports from state-run TV channels was a significant discouraging signal for the eSports community. “Whether or not eSports can make it to CCTV is a key to helping eSports players gain recognition from society.” One of the respondents in Zhao’s research contended that “It will be a milestone for us if eSports could be allowed…[to broadcast on TV]” because for the older generations, “CCTV” translates into government recognition.

Admittedly, the decision-making process is a black box that is difficult to probe, but the ambiguity found in state policies towards eSports – a brand new industry in the early 2000s – precisely exemplifies the fragmented nature of the Chinese government’s policymaking process, which requires negotiations and bargaining among different departments to build consensus, and is often “protracted, disjointed and incremental,” to use American scholar Lieberthal and Okebsberg’s words.

According to Professor Zhao Yupei, there are at least nine departments involved in the regulation of eSports in China, each with its own policy goals. The ban on internet cafes, for example, reflected the will of the Public Security Department to maintain social stability; banning eSports from being broadcast on televisions was a rightful response (for some, an overreaction) towards public outrage – mainly from parents – concerning game addiction. On the other hand, listing eSports as China’s 99th sport and hosting eSports tounaments in the name of the General Administration of Sport represented an attempt to develop an industry with huge potential, as exemplified by the success of South Korea’s eSports industry that helped the country quickly recover from the 1997 financial crisis.

To summarize, in its early stages, Chinese eSports suffered from the conflicting policies of different government bodies and social stigma surrounding game addiction and crimes. What’s worse, composed predominantly of grassroots youth from internet cafes in the country’s second- and third-tier cities such as Xi’an and Chongqing, early eSports teams in China desperately needed money.

2011 – 2016: Money

Before around 2010, eSports events in China were mostly organized by eSports lovers or third-party sponsors on a small scale. Hit by the 2008 global financial crisis, major sponsors such as Lenovo and Intel had to reduce their funding for eSports events, leaving many eSports tournaments and clubs in China paralysed. At this critical moment, two major forces came in: Wang Sicong and game companies.

Wang Sicong is the son of Chinese billionaire Wang Jianlin, chairman of the largest real estate developer in China, Dalian Wanda Group. Nicknamed “China’s richest son,” Wang invested heavily and prominently in the eSports industry since 2011, triggering a trend among China’s second-generation billionaires to fund eSports clubs. Professor Zhao Yupei’s research notes the significance of Wang’s entry as one of the earliest funding surges to facilitate an industry boom. “Almost all my interviewees mentioned Wang’s entry as a remarkable moment because it has completely shifted the entire value chain of the eSports industry and has improved the quality of the whole ecology,” said Zhao.

Nao Ge used to be an eSports player for internet cafe teams, and has worked in the eSports industry for many years. In a conversation about the history of Chinese eSports, he recalled the “miseries” of eSports teams prior to Wang Sicong’s entry: low wages, often unpaid, riding on the cheapest and slowest trains when travelling for games, sleeping in internet cafes.

Nao Ge contends that Wang’s contribution to the industry lies in the establishment of a model in which players no longer needed to worry about making ends meet. Furthermore, apart from the huge volume of money he directed into eSports, Wang led a few other eSports clubs in China to establish the Association of China E-sports (ACE) in 2011, an NBA-like organization responsible for the general supervision of eSports events in China, as well as the registration and management of eSports teams. ACE introduced a clear trading, transfer and loan system for the industry, marking the beginning of a more standardized eSports market.

Most of the existing well-known eSports teams in China were founded during the subsequent years of Wang Sicong’s arrival in the industry, including RNG, IG, VG, SN and Snake, all of which were funded by second-generation billionaires. In particular, the winner of this year’s League of Legends World Championship, EDG, was founded in 2013 by Zhu Yihang, whose father owns Hopson Development Holdings Ltd.

“I don’t care what others think of Wang Sicong, but for us in the eSports community, he is a savior,” said Nao Ge.

Alongside China’s second-generation billionaires are game companies, most notably Chinese internet giant Tencent. In contrast to Wang Sicong and his rich friends who invested primarily in individual eSports clubs, Tencent‘s investment has largely contributed to what Professor Zhao Yupei calls the “umbrella stand” of the industry, that is, the value chain and multisided platforms Tencent has established over the years, all sitting under the regulatory “umbrella cloth” provided by Chinese authorities. More specifically, built upon internet infrastructure, this value chain consists of game developers at the upper stream, such as League of Legends’ developer Riot Games, which Tencent fully acquired in 2015, eSports event execution at the middlestream, including major tournaments such as LPL (League of Legends Pro League), and eSports content production and distribution at the bottom, such as livestreaming platform Huya with Tencent as its largest stakeholder. Tencent has assumed multiple roles in this model, ranging from authorizing, producing and distributing content to acting as the executive body of a number of leagues, posing as a monopoly enterprise and dominant market player in the Chinese eSports industry.

“In fact, the eSports industry in China follows a bottom-up path. You have an industry with such a huge market size. The government has to come out and set some rules to regulate it,” explained Professor Zhao Yupei to Pandaily. “In this regards, the government is only setting the bottom lines, allowing enough space for the industry’s further development with more cultural and creative involvement…After all, game contributes so much to GDP.”

Indeed, even in the so-called “dark age” of the 2000s, there was never a total ban on games or eSports, and policies from the General Administration of Sports were especially positive. For instance, in 2008, eSports was redefined as the 78th officially recognized sport. During the period from 2007 to 2010, The General Administration of Sports granted a total of 308 million yuan ($48.3 million) to fund the construction of eSports centers and sponsorship of major events in the country’s eSports hubs such as Xi’an and Beijing.

A closer examination of prohibitive policies concerning the gaming and eSports industries indicates that the “bottom line” is almost always about game addiction prevention and content regulation. For example, in 2005, China’s National Press and Publication Administration released a notice asking China’s major game companies to develop an “anti-addiction system.” Eleven popular games piloted the system in October 2005, and, in 2007, all computer games were required to be loaded with an anti-addiction system. In 2011, the National Press and Publication Administration, along with seven other departments including the Ministry of Education and the Ministry of Public Security, launched real-name authentication within the anti-addiction systems.

Post 2016: The New Age

Given that the motivation behind most regulation of the gaming industry is to protect minors, it is safe to expect more of this type of policy in the future. Nonetheless, as long as the gaming and eSports industries fulfill their responsibilities in minors’ protection, and stay discreetly under the “regulatory umbrella” – to borrow Professor Zhao’s metaphor – everything should be alright. Leaving the obligation to protect minors aside, though, the Chinese government does have every reason to support the eSports industry.

First, as an officially recognised sport by major international sporting events such as the Asian Games, eSports fits perfectly into Beijing’s techno-nationalist agenda. Like any other sports events, international eSports competitions provide a venue for the display of “national strength.” Live eSports competitions held in China are presented as media spectacles that help create a carefully crafted vision of China’s urban development and technological innovations, while players are portrayed as national heroes fighting for their country on the international stage. And Chinese eSports players, who have long been disturbed by negative public opinion regarding game addiction, readily embrace that techno-nationalist discourse – winning on international stages is a particularly important opportunity for the Chinese eSports community to recalibrate its public image. As the author of A Brief History to E-Sports Dai Yanmiao observed, “without exception, they [Chinese eSports players] are the ones who like it most to drape their bodies with the national flag, or have it in the hands, over the heads.”

Second, the eSports industry constitutes an important part of China’s plan to develop a strong digital economy. Since the 2008 global financial crisis, China has been restructuring its economy with an emphasis on developing advanced digital technologies such as Artificial Intelligence, cloud computing, big data and so on. In 2015, Chinese Premier Li Keqiang proposed the “Internet Plus” strategy in an annual government report, calling for a platform-based and innovation-driven economy. Against this backdrop, in 2016, the Chinese eSports industry welcomed a series of favorable policies from various regulatory authorities:

• On April 15, the National Development and Reform Commission issued a notice proposing that “under the premise of intellectual property protection and proper guidance for young people, enterprises may hold national or international eSports games and events.”

• On July 13, the State General Administration of Sports released its “Thirteenth Five-Year Plan,” aiming to “focus on ice and snow, outdoor, water, motorcycle, aviation, eSports and other sports, and promote the development of fitness and leisure projects with potential for driving consumption.”

• On September 6, the Ministry of Education released an announcement stating that “eSports and management” had become one of the thirteen majors newly offered in China’s higher education institutions.

• In late September, the Ministry of Culture announced that it would “support regional, national and international game competitions in order to better develop the industry.”

Also, for China’s local governments, the “eSports Plus” model presents a great strategy to invite investment and boost the local economy. In China, local governments are not just public service providers, but also key players profoundly involved in the local economy primarily through the “attracting investment” process, in which they offer land and preferencial policies such as tax reduction in exchange for investment from large enterprises in local economic projects. But in order to successfully attract investment, you need to have a promising project first. This is where eSports comes in.

In July 2016, three ministries in China jointly issued “the Notice on the Cultivation of Specialized Industry Towns,” proposing to build around 1,000 small towns across the country with industry specialty ranging from tourism, manufacturing and technology, to traditional culture and education. eSports has the attributes of sports, culture and entertainment, all are great sources to stimulate consumption, which made eSports a promising economic project for local governments to attract investment. In 2017 alone, at least eight second- and third-tier cities in China, including Hangzhou, Qingdao, Taicang and others, announced plans to build “eSports towns,” hoping to boost their local economy by combining eSports with real estate and tourism.

Entering the 2010s, sufficient funding from second-generation billionaires and game companies like Tencent quickly facilitated the maturity of China’s eSports industry. Positive policy changes driven by China’s strategic move to developing the digital economy across major regulatory bodies provided an encouraging policy enviroment for Chinese eSports. But for some, the industry still poses the greatest peril that corrodes young people’s souls and erodes their will.

Resisting the Stigma: Constant Push and Pull

2018 marked another significant moment in that it provided an opportunity for Chinese eSports – both as an industry and a community – to extend its influence and rehabilitate its negative public image inflicted by computer games in the early 2000s. This year, Wang Sicong-funded team IG (Invictus Gaming) won the League of Legends World Championship. Different from previous victories claimed by Chinese eSports teams on the international stage, IG’s championship in 2018 attracted unprecedented attention from the general audience outside the eSports and gaming communities, in part because of Wang’s high-profile promotion of the event on social media. The rapid growth of internet infrastructure, especially livestreaming technology, also contributed to a much larger audience base for the tournament, and hence, for eSports itself.

Sharon, a master’s student researching Chinese eSports in one of its key hubs, Wuhan, called 2018 “the first year of Chinese eSports.” She told Pandaily that it was after IG’s victory in 2018 that the fan community for Chinese eSports began to see a huge rise in the number of females, who, unlike their male peers, may not even have played any eSports games, but nonetheless enjoy watching eSports out of pure appreciation for the sportsmanship it exhibits.

22-year-old Hu Yifan (pseudonym) is one of these female fans who fell for eSports in 2018. Recalling the moment of IG winning the game, she described a scene similar to young people’s reaction at EDG’s victory recorded at the beginning of this article: the guys were shouting in their dormitory buildings and “IG” appeared on every media outlet. “Some people might have heard of the game League of Legends before, but very few knew about the tournament or the team. IG’s victory provided an opportunity for people to understand what eSports was about,” Hu said.

The group that joined the Chinese eSports’ fandom after 2018 – female Gen-Zs familiar with online fan culture – is also the most active on Chinese social media with considerable agenda-setting power on entertainment-related topics. Through fan labor such as making videos featuring certain eSports players or teams, this group in turn brought more exposure for eSports among the public. “Fans, especially fangirls, are willing to invest a lot of time and energy in their favorite teams and players and accompany them through the ups and downs,” said Hu, adding that many fans would select the highlights out of dozens of hours of livestreaming footage, and edit them into short videos. “Most of the general audience will not waste so much time on the players, so these videos are an effective way to show the players’ character and skills.”

As the eSports industry grows and assumes more and more popularity among younger generations, public opinion about the phenomenon has gradually changed. Compared with overwhelming public criticism of games and eSports in the early 2000s, a Tencent report in 2018 found that 46% of Chinese parents would support their children watching eSports games, while only 7% of those surveyed reported opposition. Mainstream media coverage of the industry also shows a positive trend. Notably, according to a study conducted by Chinese scholars Liu Shuangqing and Liu Xun, in 2019, only 4% of this year’s mainstream media reports about eSports were negative.

“The stigma about games and eSports was never a problem for us. Post-00s [people born after 2000] grew up with games being the most common entertainment in their daily life. It’s just a way of playing. Why should that be problematic?” Hu Yifan’s opinion points out a key fact in the decades-long debate about “electronic heroin”: only for the older generations are games (or eSports, as they never quite learned about the difference between the two) a problem. For young people, games are just one of many entertaining activities and eSports is not too different from football and basketball.

Professor Zhao Yupei made a similar observation during her research on Chinese eSports athletes’ identity transformation and mental wellbeing. “We found that most of the time it was those born in the 70s and 80s who tended to use derogatory terms like ‘electronic herioin’ to refer to anything about games and eSports.”

Such generational differences in perceptions of games and eSports are not limited to Chinese families between children and parents. More pertinently, perhaps, it is also a perceived phenomenon among Chinese policymakers overseeing eSports. As one of China’s most prominent scholars on eSports studies, Zhao Yupei attended an eSports seminar held in Zhejiang Province in 2020, where chief government officials from the country’s Cyberspace Administration, the Propaganda Department, the National Radio and Television Administration, the Administration of Sports and a few others, were present. “Almost all of them – except for the Sports Administration and the Radio and Television Administration – thought eSports was the same as games,” Professor Zhao recalled. “And the funniest part was,” she continued, “they were all talking about eSports from a parent’s perspective, and felt it best not to develop the industry.”

While it is uplifting for Chinese eSports to have received more recognition from both the state and society, Zhao’s experience indicates that there is still a marked dissonance between those who govern and the governed, in terms of their understandings of eSports and the industry.

On August 3, Chinese state-run newspaper Economic Information Daily published an article entitled “A ‘Spiritual Opium’ Has Grown Into an Industry Worth Hundreds of Billions of Dollars,” in which games were likened to “spiritual opium.” It also argued that the rapid development of the eSports industry has “posed huge challenges to game addiction prevention.” Interestingly, the article was soon deleted, only to be reposted not long after with the term “spiritual opium” removed from the headline. In late August, China‘s National Press and Publication Administration released the strictest “anti-addiction” regulations to date, requiring game companies to provide no more than three hours per week for players under the age of 18. Major eSports professional leagues in China welcomed the new regulation by barring underaged athletes from entering future tournaments. In the case of LPL (Tencent League of Legends Pro League), this group accounts for roughly 40%-50%. The following day, the eSports management committee of the China Culture Administration Association published an initiative calling for its readers to “differentiate between video games and eSports.”

SEE ALSO: Tencent Strengthens Protection Measures for Minors After Lambasting by Chinese State-Run Media

This series of events once again demonstrates the complexity of Chinese eSports as an industry situated in the crossover of game, sports and entertainment, caught in between the post-1990 generations and their parents. To be sure, given the overall favorable policy environment, well-established value chain and an increasing fanbase, in the foreseeable future, we can expect to see eSports’ continuous growth, but it will be accompanied by a constant push and pull among different interest groups as they vie for the right to define what eSports is, where it ought to go, and how the protection of minors should be exercised along the way.