In 2016, VSPN’s revenue had already hit over one hundred million and a 200%-300% growth is expected in 2017, VSPN revealed. All business lines will also have major changes in revenue ratio. For instance, the income from advertisements might take up 30% of the total income, while lines like player agency, shows, and others will account for around 20%.

　　NEOTV (first e-sports company to be listed on the New OTC Market, considered as the first e-sports share), the first traditional industry player that set foot in the mobile game e-sports sector, is facing a similar situation. NEOTV’s CEO Lin Yuxin told TMTPost that the company’s advertisement income took up quite a large percentage in the total income last year. “In the future, the income ratio of event organizing will gradually drop. It doesn’t mean we are having less projects, but shows the fact that other businesses are generating more profits. Income from the advertisement business is expected to account for 30% to 50%,” Lin said.

　　Upstream clubs and event organizers are all eyeing advertisement clients’ pockets. But can downstream broadcasting channels and technology providers in the e-sports industry rely on fans’ consumption to survive?

　　At present, livestream platforms like Huya, Chushou and Douyu etc. have purchased the livestream broadcast right of KPL 2017 at a price around ten million yuan. An insider from Douyu told TMTPost that the income generated by a certain project is not the focus. “What really matters for the platform is the diversification of the platform’s content and the increase of data flow,” the insider said. “When the platform’s data flow is increased, we can cash in better as a platform.”

　　As a direct beneficiary, accelerator service provider YFCloud’s CEO Tong Yongyue said that to evade risks, livestream platforms tend to only work with the top ten providers in the industry. “These providers will make optimization on the graphic quality and beautify function, offering a complete set of solutions. But its’ up to the clients whether to choose a complete solution or just parts of it,” Tong explained.

　　It’s easy to tell that advertisement business remains the main source of income for companies from all parts of the e-sports industry chain. On April 28th, KPL 2017 was sponsored by Sprite, BMW, and vivo. Vivo Xplay 6 has become the official smartphone model for the 2017 KPL event. Last year the official model had been Honor V8 from Huawei.

　　According to open reports, Sprite has sponsored KPL with several tens of million yuan. VSPN’s CEO Teng Linji told TMTPost that Honor of Kings’ professional league is the leading e-sports event in the industry. Invited sponsors had sponsored an amount of several tens of million as well while sponsors of specific products generally make an investment of several million. From this perspective, Vivo has at least sponsored KPL with around several million of yuan.

　　Aside from Sprite and BMW, let’s examine the sponsoring smartphone makers here in the e-sports arena. Honor V8 was the official event smartphone of the last KPL. In general, the brand would have continued to appear in the new event since Honor of Kings is the dominating mobile game in China. But surprisingly, Honor V9, rolled out in the first quarter of 2017 claiming to be the best phone for mobile gaming, changed its partner to NetEase and is sponsoring Onmyoji.

　　If the Honor series gave up on Honor of Kings, the only phenomenal mobile game at present, for misjudgment, it would be devastated by now.

　　TMTPost had therefore contacted Honor for a comment, who replied: “Honor V9 hasn’t had any official cooperation with Honor of Kings. However, using Honor V9 to play Honor of Kings and Onmyoji will provide the users with an excellent experience.”

　　There are also other smartphone makers involved in the e-sports industry, including Meizu’s Noblue E2 that was the official training smartphone for club Xiange. However, when Meizu was promoting the phone model by introducing its “do not disturb” mode for gaming, Tencent’s Honor of Kings was included on the promotion poster. Apparently, Tencent wasn’t happy about it, and later Meizu apologized officially on Weibo for that. Before that, 360N5 had also cooperated with NetEase and became the official smartphone of the mobile game Land of glory.

　　Looking from the tendency of industrial consumer electronic products, this is a strategy that focuses on specific vertical sectors and catering to gamers who care about the specs a lot. The flocking in of car makers and phone makers, which are from major markets of trillions, proves that the e-sports industry is recognized by the market.

　　We have analyzed that the main sources of income of clubs, event organizers and livestream platforms have been the advertisement clients and sponsors, the business side clients. Although Tencent’s Honor of Kings has 200 million players, only a very small percentage of the ￥5.5 billion income was generated by the fans from the consumer side.

　　Utilizing the fans before Honor of Kings loses its popularity is the key to building a mobile game e-sports industry for Tencent.

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　　The article is published with authorization from the author @Zhu Taowei, please note source and hyperlink when reproduce.]

　　Translated by Garrett Lee(Senior Translator at PAGE TO PAGE), working for TMTpost.