At that time, NetEase announced that it would team up with Blizzard Entertainment on War3 and DOTA, while launching self-developed strategy games, with an emphasis on the MOBA game Heroes of Kingdoms.

　　The e-sports platform dj.163.com from NetEase that later came online was powered by a ￥30 million fund.

　　Ding Lei promised continuous funding to support the e-sports development and announced to launch the global e-sports event NET in late 2017. The event has regular programs like Heroes of Kingdoms, StarCraft 2, WarCraft 3 and DOTA.

　　Image Credit: Gamecrate

　　However, NetEase’s e-sports strategy lacks diversity and it’s destined to fail. Heroes of Kingdoms couldn’t achieve an outstanding performance in the market under sieged by DOTA2 and League of Legends. Heroes of Kingdoms doesn’t have many livestream shows on NetEase’s livestreaming platform NetEase CC.

　　Blizzard, a gaming giant with tremendous gaming resources, doesn’t help out NetEase either under these circumstances. For instance, dj.163.com, which NetEase has been putting a lot of hopes on, has changed to dz.163.com. Blizzard hasn’t authorized NetEase any of its game’s e-sports right either.

　　That being said, even though NetEase is the operator of almost every Blizzard game in China, the Chinese company’s role remains as a game operator. NetEase can not decide to include Blizzard’s games in e-sports events.

　　As a matter of fact, any company that wants to hold e-sports events involving Blizzard’s games, has to contact Blizzard’s HQ instead of Blizzard’s partner in China, NetEase.

　　In March this year, Overwatch’s professional league OWPS was held. It’s another e-sports event cooperation with Shanghai Project Banana after the APAC.

　　NetEase wasn’t involved in the two e-sports events as Shanghai Project Banana directly worked with Blizzard’s HQ in the U.S.

　　Blizzard’s action was not surprising. On one hand, e-sports events are at core different from games.

　　According to China’s policies, overseas games have to have a Chinese partner to operate in the country. But there isn’t such restriction for e-sports events.

　　On the other hand, holding onto e-sports rights is beneficial for quality control. It prevents the chaotic situation where the developer, the operating agent and the e-sports event organizer to fight over disagreements.

　　NetEase, therefore, lost the only advantage it had. It has no control over all those popular games when it comes to e-sports. And NetEase’s original plan was tap into this realm through Blizzard’s products.

　　NetEase is a replaceable role in terms of e-sports like Project Banana and NeoTV. There is no incentive for Blizzard to stick to NetEase.

　　It’s probable that professional e-sports organizers like Project Banana are better options than NetEase since it has little experience in the field.

　　It’s fair to say that Heroes of Kingdoms had a disastrous performance. In addition, Blizzard’s attitude towards e-sports also made NetEase an observer in the e-sports era.

　　However, there is no denying that NetEase itself is to blame partially for the failure. The result was not mainly contributed by Heroes of Kingdoms, but more of NetEase’s own strategies.

　　For a long time, NetEase has been focusing on steady growth and money making businesses. That’s how NetEase climbed to today’s position and also how it missed many opportunities.

　　Under such strategies, it’s natural for NetEase to neglect the e-sports business. On one hand, e-sports will cost money burn in the early phase. On the other, NetEase is still considering the risks presented by the uncertainties of China’s policies on e-sports.

　　In earlier years, NetEase’s move had been conservative but we couldn’t really say it had taken a bad move. However, looking from today’s perspective, NetEase had it wrong.

　　The recent success of Tencent’s Glory of the Champions (王者荣耀) has been a big hit in NetEase’s face. It breaks the NetEase’s dominance in the sector created by Fantasy Westward Journey (梦幻西游). Although NetEase’s Onmyoji (阴阳师) had made huge success last year, Glory of the Champions is still the leading product in the market.

　　Users and the industry trend have shifted from Onmyoji to Glory of the Champions, forcing Ding Lei to reiterate the appeal of Onmyoji on users during the Q1 Earnings phone meeting.

　　For NetEase, it can still win over the market with quality games, but it appears to have fewer advantages in the e-sports sector.