January saw VSPN, one of the biggest Chinese esports companies publicly announce their plans to IPO on Hong Kong Stock Exchange, as the business of esports in China continued to evolve and develop with new sponsorships and partnerships. Every month Mailman will share the biggest stories from China along with expert analysis on why this matters.
1. China’s biggest esports company VSPN files for Hong Kong IPO
Chinese esports solutions provider Versus Programming Network Group Limited (VSPN) filed an A1 Listing Application Form for an Initial Public Offering with the Hong Kong Stock Exchange on January 31st 2022, with the Bank of America, Merrill Lynch, China International Capital Corporation, and Credit Suisse AG as underwriters. VSPN reported that the company generated $208M USD in revenue from Q1 - Q3 in 2021, an increase of 144% from the same period in 2020 ($85M). Tencent owns 13.54% of VSPN’s shares, while founder and CEO Dino Ying controls 35.05% of the total voting power.
💡 Mailman Take: VSPN is widely regarded as one of the most influential esports companies in China, operating over 80% of the country’s esports events, including Honor of Kings’ King Pro League (KPL) and Peacekeeper Elite League (PEL). This is exciting news for the China esports industry to see VSPN plan for an IPO in Hong Kong, potentially setting the way for others to follow suit. We've seen that VSPN has been profitable through their relationship with Tencent and their esports titles, however, there is still a challenge for VSPN to cooperate with other publishers including NetEase, Perfect World, and ByteDance.
2. Olympic Council of Asia signs strategic partnership with Tencent for esports development
The Olympic Council of Asia (OCA) and Asian Electronic Sports Federation (AESF) signed strategic partnership deals with Tencent, with plans to establish a regional esports tournament ecosystem built on Asian characteristics. Tencent Esports will provide the technology to help the OCA and AESF host an esports event called “the Road to Asian Games (RDAG)” in Asia. In addition, Tencent and the OCA will jointly promote cross-cultural exchanges and provide educational programs for players and practitioners.
💡 Mailman Take: Tencent already has relations with the Olympics, including the media rights around the Tokyo 2020 Summer Olympics and the Beijing 2022 Winter Olympics. Tencent will use this opportunity to further establish itself as a key partner with the Olympics and their influence on potential Virtual Games in this region, especially with esports being featured at the 2022 Hangzhou Asian Games.
3. OnePlus and Jing Dong join League of Legends Pro League
On January 7th, Chinese League of Legends operator TJ Sports announced its new partner list for the League of Legends Pro League (LPL), adding two new brands, smartphone OnePlus and e-commerce platform Jing Dong as official partners. Apart from OnePlus and Jing Dong, the partner's list includes Mercedes-Benz, Nike, KFC, Super Mobil, Wahaha, TCL, and several others.
💡 Mailman Take: OPPO used to be the smartphone sponsor for LPL, but OnePlus has now taken on this category following its merger with OPPO in June 2021. For OnePlus, sponsoring the LPL is a wise decision to grow brand awareness in China given it has greater recognition in the West. OPPO will now look towards the West with its global partnership with Riot Games for League of Legends tournaments.
4. Durex and Philips sponsor NetEase’s KARAKA: Bladepoint World Championship
Electronics company Philips and condom brand Durex signed sponsorship deals with NetEase for the NARAKA: Bladepoint World Championship in Guangzhou from January 13-16. This is NetEase's first large-scale global esports event in 2022, featuring $1.2M in total prize pool money and 24 global teams from China, Singapore, Japan, and Vietnam, including Nigma Gaming and Alliance. The competition will be broadcasted in Japanese, Mandarin, English, and Vietnamese.
💡 Mailman Take: NetEase is the second-largest game publisher in China and the event shows the company’s ambitions in building its own esports ecosystem. It should be noted that NetEase did not find a third-party tournament organizer like VSPN to help them host the event. After two years of development, NetEase now has two popular esports titles - Identity V and NARAKA: Bladepoint.
