According to a new report from intelligence firm Niko Partners, revenue for China’s e-sports market is set to grow 14% year-on-year in 2021 despite a tougher regulatory environment for gaming in the world’s second-largest economy.
E-sports refers to professional gaming where gamers often play against each other in major tournaments and fans watch via live stream.
China remains the world’s largest single-country market with e-sports revenue expected to reach $403.1 million in 2021, Nico Partners said in a report released Thursday.
“What China has is [a] “One of the advantages in the e-sports space is that it’s a really extraordinarily large market with a huge population of gamers who are interested in e-sports content … to become e-sports professionals themselves,” Alexander Champlin, head of e-sports partners at Nico, told CNBC on Thursday. told Squawk Box Europe.
China continues to grow despite a tough line on gaming from regulators. Last year, Beijing introduced rules limiting the amount of time under-18s can play online video games to three hours per week.
Chinese regulators have also suspended approval of new games for distribution and monetization between July 2021 and April this year.
China’s biggest gaming companies NetEase and Tencent have been affected.
While the e-sports market has held up well, Champlin cautions that the future of professional gaming in China may have some impact.
“What these regulations do, especially with regard to youth gaming, is kind of clamp down on e-sports player pipelines. So there’s still a lot of excitement around e-sports titles, e-sports celebrities, what we’re a little concerned about is e-sports fans and e-sports. will do for future generations of professionals … and what it could do for China’s historic dominance in space,” Champlin told CNBC.
Despite a widespread crackdown on youth gaming, there appears to be government support for e-sports. Last year, the major city of Shanghai built a 500,000 square meter e-sports arena.
Japan and South Korea are the two largest Asian markets for eSports revenue.
While China continues to dominate, there are other regions and countries that are growing rapidly.
Esports revenue in Greater Southeast Asia totaled $80.1 million in 2021, up 27.3% year-over-year. E-Sports revenue in India grew to $20.3 million last year, a 26% increase over 2020.
“It is [India] is a huge market and has historically been undervalued as a dollar-to-participant ratio,” Champlin said.
“This means that as the purchasing power of Indians increases, the potential player base and audience base expands dramatically as the market becomes more saturated by smartphones. What we are seeing is a lot of investment from key players in the Indian games market,” he added.