After eating bananas in Wang Sicong, Tencent personally breast-fed, and the domestic e-sports competition leader hit the market.

Text | Zhang Shule (columnist of People’s Daily Online and People’s Post and Telecommunications, observer of Internet and game industry)

What can you gain by backing the glory of the king?

Will Tencent control your fate?

Recently, e-sports operator Hero Sports VSPN (hereinafter referred to as "VSPN") submitted an IPO application to the Hong Kong Stock Exchange.

According to the data, VSPN is the only operator of the glory of the king KPL. According to the revenue in 2020, it occupies more than 75% of the market share in the organization and operation of e-sports events, making it a leader in the industry.

VSPN was founded in 2016, and its founder Ying Shuling is a well-known figure in the game circle, known as "the first mobile game player in China".

According to the prospectus, VSPN’s business includes the operation of e-sports events, earning commercial benefits from brands and sponsors, game developers and publishers, live broadcast platforms, and community operations.

Jost Sullivan reports that the company ranks first in the market share of the e-sports competition industry in China, and it is the only participant whose business covers all market segments of the industry.

As far as the first nine months of 2021 are concerned, the revenue of VSPN mainly comes from the operation and commercialization of e-sports events, accounting for 35.3% and 34.1% respectively, and the third contribution is community operation, accounting for 25.9%.　　

According to Jost Sullivan’s report, VSPN held official professional e-sports competitions for the glory of the king, Peace Elite, Jedi Survival, Jedi Survival Mobile Edition, Crossing the Line of Fire and Clash of Tribes: clash royale. In 2020, VSPN operated 77 e-sports events on 21 e-sports games in China and overseas, and held more than 2,000 competitions. In the nine months ending on September 30th, 2021, VSPN operated 94 e-sports events on 29 e-sports games in China and overseas, and held nearly 5,600 matches.

It is worth mentioning that in January, 2021, VSPN acquired Banana Game Media, which was praised as the performance of the company to further strengthen the operation ability of overseas events.

According to media reports, the company is a subsidiary of Shanghai Banana Plan Culture Development Co., Ltd. founded by Wang Sicong, which focuses on e-sports business.

However, Tianyancha APP showed that on January 14th, 2021, Wang Sicong had withdrawn from the list of shareholders of the company.

In addition, Tencent is the invisible pillar behind VSPN. As of the last practical date, Tencent owns 13.54% of its total issued share capital and is one of its major shareholders.

In terms of support, Tencent is also doing its best. Since 2016, Hero Sports VSPN has cooperated with Tencent, including the operation of sports events and the commercialization of some e-sports games, such as the glory of the king and QQ Speeding. The two sides also jointly managed the Peace Elite Professional League (PEL) from October 2019 to December 2021.

Taking the glory of the king Professional League (KPL) as an example, Tencent’s "hard work" is even more obvious.

The league is currently the world’s largest mobile e-sports league (based on the highest audience during the finals).

Since 2017, Hero Sports VSPN has been its sole event operator.

In this regard, Wu Liyang, a reporter from 21st century business herald, and Xu Xinyi, a reporter from China Business News, had an exchange with Shu Le respectively. Being original thought:

Under the background that e-sports has officially become an Asian Games project, VSPN, which takes e-sports events as the mainstream profit model, stands on the cusp of the times, and its application for IPO also represents the rhythm of the domestic e-sports industry from scratch to maturity.

On the surface, Tencent’s will may influence the fate of VSPN, but it is not.

Although, VSPN suggests risks in the prospectus, if the business relationship with Tencent cannot be maintained, the company’s business may be adversely affected.

However, the role played by e-sports operators in the e-sports industry is becoming an "irreplaceable" mode, and the possibility that game manufacturers will end up doing competitions themselves is getting smaller and smaller.

It must be recognized that event operation is a field different from game operation and promotion. In the past, many events in the e-sports industry were at best a game marketing promotion of game manufacturers, rather than a sustained and professional sports event.

E-sports must have professional operation and maintenance if it is to be truly transformed from a game into a sports event. The role of operators has also become crucial with the demand iteration of domestic e-sports cities, e-sports events and game manufacturers.

There is a cooperative relationship between e-sports operators and game manufacturers, and choosing a company with its own interests among multiple operators to run its own game events, or taking back power due to differences in cooperation, will gradually become the norm with the deepening of e-sports and the emergence of related companies.

However, it is not realistic for game manufacturers to directly end up. At most, the game manufacturer will set up a new company to take care of the games and avoid business conflicts.

One background to note is that Ying Shuling also founded Hero Entertainment, which focuses on the research and development and distribution of mobile e-sports games.

In a sense, the starting point of VSPN is precisely a fission in exploring the e-sports industry chain after Ying Shuling achieved the game company Hero Entertainment, and gained more development from hosting his own games to hosting more games of third-party game companies.

At the same time, e-sports events are becoming more and more like a sunrise sport.

In the prospectus, VSPN quoted Jost Sullivan as saying that in 2020, 488 million e-sports fans around the world specially watched e-sports programs. In addition, the audience number of e-sports events is close to that of traditional sports, but the audience is more diversified and has sufficient growth potential.

In fact, the life cycle of successful e-sports games is calculated in ten years, and entering the competition mode can further extend its life cycle and provide gamers with more experiences (watching games, participating in competitions and spending around).

As a young people’s game and sports experience, the viability of e-sports industry is actually very strong. As the forerunner of the rise of live broadcast and short video industry in the past five years, we can see that its strength is not limited to the event itself, and it has the ability to surpass traditional sports in the surrounding derivation.