KPL’s profit allocation system gives clubs hope of profiting. In some way, the system resolves the clubs, event organizers, network providers and livestream platforms’ concerns on whether the mobile game e-sports sector lags behind the client-based e-sports in viewing experience, competition, and fairness.

　　Chenhai Capital’s Chen Yue told TMTPost that the wide gap in competitiveness, viewing experience and mass communication exists in all sports fields. Only when a balance is achieved, can we have a better sports event, and it’s the same for e-sports, Chen said. Tencent’s business model definitely needs more consumers to participate in the event.

　　At present, Honor of Kings has over 200 million registered users, making it the biggest MOBA mobile game in the world in terms of user base. In accordance with Tencent’s Q1 report in 2017, the revenue hit ￥49.552 billion, showing a year-on-year growth of 55%. Th company cashed in ￥19.272 billion, a 44% surge. Among all, Tencent Game contributed an income of ￥22.811 billion, grew by 24%. The Internet giant’s mobile gaming business had a 57% growth and hit ￥12.9 billion. Tencent explained in the report that the growth was mainly driven by existing and new games like Honor of Kings, and Dragon Nest etc.

　　Looking at these amazing numbers, it’s easy to tell that Tencent has made a great fortune. It’s a great comforting assurance for upstream partners like e-sports clubs, livestream platforms and event organizers to enter the mobile game e-sports field.

　　Currently, e-sports clubs rely on sponsorships and the fan economy to profit. QG’s sponsors include MayN, AutoFull, and Panda TV. In contrast to sponsors on the League of Legends event, the difference here is that Tencent will pide some of the money from sponsorships to the club. As for the fan economy here, it operates like that of Internet celebrities.

　　“The profit from content reward by users is very little.The club can’t even use it to buy some fruits. We mainly attract sponsors with our views.” Linko told TMPost.

　　That said, currently e-sports clubs are relying heavily on enterprise users in the mobile game e-sports sector while ordinary users can only provide very little income. But even if the same model was applied in 2016, e-sports clubs wouldn’t be able to make money either. The turning point was when Tencent started to give up part of the profits to the clubs. By taking a step back, Tencent pumps in stimulus into the industrial chain, which will bring greater profit to Tencent in the long run.

　　Tencent has monopolized the mobile game e-sports market, while Honor of Kings accounts half of the market

　　According to the Industry Report of China’s E-Sports Industry (January to March 2017) jointly published by CNG and China Music and Digital Association Game Committee, the e-sports market in China cashed in ￥18.29 billion in Q1 this year, a year-on-year growth of 42.6%.

　　It’s worth noting that in Q1 2017, the mobile game e-sports sector started to act as an income driver for the e-sports market, and surpassing the client-based games in e-sports for the very first time. However, Tencent has already taken over 80% of the market share of mobile game e-sports market. Honor of Kings has acquired half of the mobile game e-sports market share, generating an income of ￥5.5 billion.

　　As the copyright owner, Tencent is gradually opening up its mobile game e-sports operation. In the past, e-sports events are only a supplement activity of Tencent in the gaming market. For instance, the Cross Fie Pro League was a marketing campaign of Cross Fire. Tencent also had DNF Pro League for DNF. They all served the games themselves. But starting from last year, Tencent began to run e-sports events independently and set to build up an open system, making e-sports an independent product.

　　E-sports event organizer VSPN had been a direct beneficiary in Tencent’s opening-up strategy. It had agreed on a contract with Tencent on attracting investments for KPL, exclusive cooperation and agency on advertisements, as well as the right to organize events.

　　“After opening up, the market campaign has been having an tremendous increase in sponsorships and capital. We are hoping that the investments from both Tencent and the sponsors can push the development of the whole industry chain forward, bringing more income to the clubs and professional players and generating healthy income,” VSPN’s CEO Teng Linji told TMTPost.

　　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%.

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