Tue, Aug 13, 2019 - Page 13 News List

The billion-dollar race to become China’s game-streaming boss

With superstar players, millions of fans and a US$3 billion industry on the line, game-streaming rivals Douyu and Huya are duking it out to become the Twitch of China


China’s e-sports team Invictus Gaming reacts on stage after winning the League of Legends World Championship final in Incheon, South Korea in November last year. The multiplayer online battle game is played by an estimated 100 million fans worldwide.

Photo: Bloomberg

Cameras flashed and fans screamed, as Liu Mou stepped into the spotlight on a sweltering summer evening.

In the industrial heartland city of Wuhan, tens of thousands of spectators jam-packed the waterside strip that bore witness to Chairman Mao Zedong’s (毛澤東) iconic swims across the Yangtze River half a century ago.

In unison, the mob roared “hubby” — the moniker jokingly assigned to many male celebrities in China — and Liu, 28, waved back with a smirk. The crowd was mostly men.

Their adulation was a testament to Liu’s status — not as marriage material — but as one of the brightest stars among China’s gamers. Liu and his fans were on the waterfront for a carnival celebrating the industry, hosted by one of China’s largest game-streaming companies, Douyu (鬥魚).

Liu is its biggest celebrity. Every day, he spends at least four hours playing League of Legends and other popular titles, streamed to more than 10 million fans. Here, at the carnival, they were getting a chance to see him in person.

For two nights, out of his own pocket, Liu bought dinner for 3,000 of his followers at two nearby restaurants. As he shuttled between tables of noodles and crayfish for selfies, groupies swarmed to pat his rotund belly, and he laughed out loud. It was an endeavor to thank his fans.

“I had a hard time taking care of everyone,” Liu said.

The three-day festival raked in about 20 million yuan (US$2.9 million) in ticket sales, and it’s all part of the race to create China’s equivalent of Amazon’s Twitch, only bigger and potentially more profitable.


Douyu is counting on people like Liu to generate revenue via virtual gifts bestowed by fans, potentially showing tech giants like Facebook and Amazon a new way to monetize game-streaming beyond advertisement and sponsorship.

Liu and Douyu’s fate are also intertwined by the same challenge: to prove their spectacular rise is more than a fad but can withstand competition, cash burn and government censorship. Analysts predict the industry could grow to be a US$3 billion business in China.

“I choose Douyu because the platform has accumulated a huge base of League of Legends fans,” said Liu, better known by his moniker PDD. “So far our success is built upon each other, and we complement each other.”

Twitch, acquired by Amazon for nearly US$1 billion in 2014, is the dominant game-streaming platform in the US. Yet its absence from China — due to a government ban — has given local start-ups a chance to fight for the world’s largest gaming market.

Unlike Twitch, which has multiple revenue streams like subscriptions and ads, Chinese platform operators live and die on virtual gifts from fans.

Liu plays exclusively on Douyu, and that partnership is key for the company, which went public in New York last month. 91 percent of Douyu’s revenue came from virtual gifts in the quarter ended March.

Liu alone may have contributed as much as three percent of Douyu’s revenue in the second quarter, according to Ke Yan, a Singapore-based analyst with Aequitas Research. He based his analysis on stats from xiaohulu.com, which monitors virtual gift spending across Chinese streaming services.


Liu’s ability to turn his Internet addiction into a fortune reflects a shift in values and consumption amid rising wealth in China.

As a teenager, Liu disobeyed his parents when he moved to Shanghai to become a professional gamer for one of the world’s most popular games, League of Legends. Back then, he earned a monthly salary of just US$200. He lied to his parents that he was getting as much as US$440,000 a year. Plain steamed buns were his go-to food. KFC was a luxury.

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