Tencent to expand investment in eSports tournaments

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Chinese tech giant Tencent will look to expand its investment in eSports, with plans to cooperate with local authorities on organizing and expanding tournaments for hugely popular games like "League of Legends" and "Honor of Kings."

Talking to the Financial Times, Tencent's eSports division manager Hou Miao said, “We will organize more eSports events this year, because many local governments want to increase their investment,” pointing to a sector that is expected to see its audience grow to 454 million people this year, according to gaming consultancy NewZoo.

The overall eSports sector will be worth an estimated 1.1 billion U.S. dollars, and China represents a large and growing slice of the market, with NewZoo expecting the country to overtake Western Europe in terms of revenue in 2019 (hitting 210 million U.S. dollars).

Tencent has played a major role in the growth of eSports in China, developing games like "Honor of Kings," which made revenue of 1.3 billion U.S. dollars in its own right in 2018.

"Honor of Kings" has its own eSports league, established by Tencent, with some games attracting tens of millions of views online.

"League of Legends" has long been a staple of the eSports sector, and a high profile 7.5 million-U.S. dollar sponsorship deal signed last week between Nike and the LoL Pro League shows just how big it is both in terms of size and financial pulling power.

Chinese authorities have noticed the financial potential in eSports, investing heavily into infrastructure such as stadiums, training facilities and even an entire eSports town in Hangzhou.

After a slowdown in approvals for new video game releases in 2018, regulators have resumed handing out new licenses since the start of this year, with Tencent eagerly awaiting approval for "PlayerUnknown: Battlegrounds" (PUBG), a game it acquired the rights to in November 2017.

PUBG has been a global smash hit, with an estimated 400 million players as of last year. The battle royale-style game has huge potential for eSports, monetization and tournaments in China, where it is still awaiting official approval.