For years, China has been in a world-leading position in the global esports industry. According to Newzoo , China’s 619.5M players will spend $37.9B in 2018, making it the biggest gaming market in the world. Meanwhile, Tencent’s report shows the Chinese esports market size is expected to grow to $1.5B in 2020.

Every two weeks, The Esports Observer presents the biggest esports business news in China, including investments, acquisitions, sponsorships, and other major news from the region.

Tencent Expands Honor of Kings to APAC, WCG will return in Xi’An

Tencent is taking its top Honor of Kings competition to a global level, inviting eight teams from the Asia-Pacific (APAC) region, including China, Korea, and South Asia, to the 2019 King Pro League (KPL) Winter Champion Cup. The competition will be held in January, with a $500K (USD) prize pool. M&Ms and Volkswagen have also become new sponsors of the 2018 KPL season. In addition, promotion and relegation in the KPL has been removed as part of its franchise inititiative.[perfectpullquote align=”left” cite=”” link=”” color=”” class=”” size=””]On Sept. 19th, The World Cyber Games (WCG) announced it will return to the Chinese city of Xi’an in July 2019.[/perfectpullquote]

On Sept. 19th, The World Cyber Games (WCG) announced it will return to the Chinese city of Xi’an in July 2019. China has held competitions under the WCG brand before in 2009, 2012, and 2013, the last of which was the final WCG to date. Last year, Korean company Smilegate Holdings bought the WCG IP. It’s worth noting that Smilegate is also publisher of the hugely popular game CrossFire (CF) in Korea, which was published in China by tech giant Tencent. The FPS game was reported to have 6M peak concurrent users in 2016.

The International Olympic Committee (IOC) president Thomas Bach has stated that “so-called killer games” will not be allowed in any potential future esports events at the Olympics. In contrast, Olympic style esports events, such as the WCG or the World Electronic Sports Games (WESG) will still showcase violent games like CrossFire or Counter-Strike: Global Offensive (CS: GO).

Netease Plans $29M Spending for NeXT

Chinese tech company Netease has announced it will spend ¥200M Chinese RMB ($29M USD) in its esports tournament series NeXT. According to the announcement, Netease plans to reinforce its event management, advertising, and marketing operations. In addition, ¥50M RMB ($7.25M USD) will be spent on production for the first summer season of NeXT. The Chinese payment platform China UnionPay will be the chief partner of NeXT. Netease has also partnered with NVIDIA, JingDong (JD) smartphone sales platform, ALIENWARE, and SteelSeries.

Netease has a strong relationship with Blizzard Entertainment . The company has been the exclusive distributor in China for the developer’s titles since 2009. Multiple Blizzard esports games will be featured in the future NeXT competitions, including Warcraft III , Starcraft II , Hearthstone , and Overwatch .

QG and FEG Each Raise Close to $15M in Series A

Chinese esports organization QG has closed a series A funding round, raising close to ¥100M RMB ($14.4M USD, according to the announcement). The round was co-led by Chinese VC firm Toutoushidao Fund, which will help QG build its new headquarters in the city of Shenzhen and expand its brand to other entertainment areas, including music. QG is currently partnered with e-commerce brand JingDong (JD), sports brand Nike, and Chinese sports goods supplier 361°.

In addition, Chinese esports organization Fighting Esports Group (FEG) has also raised close to ¥100M RMB ($15M USD, according to the announcement) in a series A funding round. FEG is a China-based online gaming network. The round was co-led by China Sports Capital, a co-venture between Sequoia Capital and CMC Capital partners. SAIF Partners and Sea of Stars Capital also participated in the round. According to sources, FEG will partner with Tencent to expand Tencent’s top Honor of Kings competition KPL into South Korea. The competition will be named the Korean King Pro League (KRKPL).

EU Beats China in Hearthstone, Winner Receives an Aston Martin

The CN vs EU Championship 2018, a Hearthstone competition, ended on Oct 2. The tournament, which was the fifth in the series so far, was hosted by Blizzard in conjunction NetEase, with the production handled by Versus Programming Network (VSPN). Thijs “Thijs” Molendijk, representing G2 Esports, won the championship and claimed the final reward—an Aston Martin supercar. However, Thijs later cashed in his prize for the cash equivalent of roughly €175K EUR ($200K USD).

Don’t mind me just celebrating my EU vs CN win one more time pic.twitter.com/yJa2HOzDXk — Thijs (@G2Thijs) October 9, 2018

This is not the first esports tournament to reward a winning player with a brand new car. When Mercedes-Benz sponsored its first event in the ESL One series, the MVP Alexei “Solo” Berezin was rewarded with a new Mercedes. With more automotive brands like Mercedes Benz and Volkswagen getting involved in the esports industry, there are more opportunities available for new and valuable sponsorship methods.

RNG branding at KFC in China.

Sponsorship/Partnership Deals in Chinese Esports

For the 2018 League of Legends World Championship, Tencent has signed deals with KFC, Mercedes-Benz, and Chinese dairy product brand YILI, making them official partners for the global finals in China. Since the start of the main event in Busan, KFC China has operated 2018 League of Legends World Championship-themed stores. In addition, YILI has put the tournament logo on their dairy products.

KFC has also begun a one-year sponsorship deal with League of Legends team Royal Never Give Up (RNG). KFC China will produce RNG-branded exclusive products, such as toys and meals. The first RNG french fries began selling on Oct 1. In addition, the Chinese streaming platform Douyu also announced a new sponsorship deal with RNG.

Intel has signed a long-term sponsorship deal with Chinese esports organization Newbee. Newbee declined to provide more details to TEO, but referred to the deal as a “long-term partnership”. Newbee were the champions of The International 2014 (Dota 2‘s biggest event of the year), and were the second place team in The International 2017.

Edward Gaming (EDG)’s League of Legends team has signed a sponsorship deal with Chinese sports apparel brand Li-Ning. Details on the agreement have yet to be announced, but images have surfaced of EDG members promoting Li-Ning apparel. Li-Ning was previously an official marketing partner of the NBA, most notably signing a sponsorship deal with Shaquille O’Neal reportedly worth $1.2M. In May, Edward Gaming closed a funding round of nearly ￥100M RMB ($15.7M USD, according to the exchange rate at the time), co-led by Yao Capital, the firm of former NBA Chinese player Yao Ming.

Other recent sponsorships/partnerships:

Topsports Gaming (TOP) has signed a sponsorship deal with Adobe Flash Player. TOP was founded in Dec. 2017. The team’s owner, TOPSPORT, is one of the biggest sporting goods retailers in China and the second largest Chinese distributor for Nike. TOP’s League of Legends team has a franchised spot in the League of Legends Pro League (LPL), the game’s top competition in China.

The Chinese PUBG team Victory Five (V5) has signed a sponsorship deal with hardware brand Cherry. The team was founded in 2018 April, and its founder Youjun He is the president of Macao esports association.