The recent Global E-sports Market Report from market research company Newzoo forecasts that the global e-sports industry would have a year-on-year growth of 41.3% and reach a scale of $696 million, with income from independent brand operations (sponsorship, advertisement, and broadcast rights), event ticketing, fan merchandise, and investment from game publishers. Brand expense is estimated at around $517 million, among which $155 million would be advertisement, $266 million would be sponsorship, and $95 million would be media copyrights. Investments from brands will be doubled, driving the total volume of the market to $1.5 billion. The report also predicts that consumers would spend a total amount of $63 million on event tickets and fan merchandise.

　　The other $116 million would be the total investment from game publishers in the e-sports market. This suggests that for most game publishers, the e-sports business is not a profit generator.

　　However, their market education strategy is logical in some way considered the positive impact on income from games and the development potential of e-sports. Tencent’s move confirms this idea as the company started to treat Honor of Kings as an independent e-sports product last year.

　　In the traditional sports industry, the income contributed by each fan is the key indicator of the level of fan economy. The assessment covers the source of income, media rights, sponsorships, and expense. According to Newzoo’s forecast, each fan is expected to contribute $3.64 on average the industry. As the e-sports industry continues to mature, the number of local events and seasons increases, and the number of media right deals keeps on rising, each fan is expected to contribute $5.20 by 2020. However, that’s still lagging behind popular sports like basketball.

　　It’s easy to tell that even though KPL is running under the operation system similar to NBA and the FA Premier League, it still fails to dig up enough value from the consumer side, especially on fans’ direct consumptions. It’s essential to nurture a group of professional and attractive players before Honor of King becomes top in normal distribution for KPL to further develop its e-sports business.

　　Taking a step back, letting industrial chain players into the arena

　　As most people have already known, the seasoned player Faker of League of Legends is now valued at ￥20 million to ￥30 million. In 2016, it was common for commentators to get a contract of over ten million yuan. In February last year for instance, MISS was signed by livestream platform Huya at ￥100 million, bringing up a stir among industry insiders, media and players. It appears that there is a huge bubble in the industry.

　　So many might wonder: will players from Honor of Kings, seen by many as the mobile version of League of Legends, emerge to be as that expensive as well? The e-sports event organizer’s structure is similar to that of overseas mature sports league like the FA Premier League and NBA, and therefore within the contract expire date, the club members’ change of club is seen as a transfer. Industry insiders revealed to TMTPost that an average member’s transfer would cost around ￥200,000.

　　According to previous open reports, in February this year e-sports club QG’s CatGod set the transfer record at one million yuan in the Honor of Kings realm. This signifies that professional players of League of Legends are still 20 to 30 times more expensive than pros of Honor of Kings.

　　“When inviting us to play in Honor of Kings, Tencent promised us that the salary cap would be at on million, and that it would allocate the rest of the money and sponsoring fund (previously owned by Tencent) to the club and the event organizer,” QGhappy’s club manager Linko told TMTPost.

　　CatGod, who was involved in the deal, revealed that the transfer was between clubs and that he didn’t participate in the negotiation and the discussion on the details. He said that he only became aware of the deal after it was already signed. CatGod also said that he couldn’t reveal details of his transfer cost and how much he had got.

　　In 2017, the club’s contract with the players has been changed to a three-party agreement involving Tencent. The agreement was drafted by Tencent-led KPL, aiming to supervise and ensure the rights of all parties. However, clubs and the league have a confidential agreement, and therefore detailed statistics are not available yet. QGhappy’s manager Linko told TMTPost that part of the profit would be allocated without compromising players’ rights. “KPL players are not that expensive as most people believe to be,” Linko said.

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