China's Alibaba and Tencent esports partnership

Tech giants Alibaba and Tencent have now joined forces, showcasing their flagship brands in the esports arena.

China's Alibaba and Tencent esports partnership
Spectators watch video games as gamers from different countries play during an esports and gaming festival Gamers8 at Boulevard Riyadh, Saudi Arabia, July 9, 2023. REUTERS/Ahmed Yosri

The backstory: For the last few years, China’s government has looked to regulate gaming, especially to prevent addiction issues among minors that love playing video games. It’s done that with measures like limiting playtime, requiring age verification and enforcing real-name registration rules. The goal was to strike a balance between gaming, academics and physical activities. In 2021, China froze the licensing of new games, which have to be approved before hitting the commercial market.

More recently: China's approach to gaming seemed to be shifting last April when it approved its first batch of games following the licensing freeze. The country has also turned its attention towards esports, which is essentially professional gaming where players compete in large-scale tournaments while fans watch them on livestreams. China has a huge esports market, with the world's highest number of players and tournament viewership, followed by the US. On top of that, for the first time ever, esports will be an official medaled event in the upcoming Asian Games.

Earlier this month, Tencent, one of the biggest players in the tech industry, pointed out how esports is gaining a strong global influence. It’s calling it an "emerging sport" that’s in a crucial phase of development.

The development: Tech giants Alibaba and Tencent have now joined forces, showcasing their flagship brands in the esports arena. Tencent’s popular game Honour of Kings has been operating on Alibaba’s e-commerce platform Taobao for the past four years. Now Taobao is taking it a step further by sponsoring gaming livestreams on the platform. In a collab with Tencent’s Honour of Kings, the two are launching an invitation-only competition, with the finals to be livestreamed on Taobao Live on August 5.

Key comments:

"In 2023, China's online gaming will get back to growth, but (it won't be) huge at all," said Chenyu Cui, an analyst at research firm Omdia in January. "Growth will be slow and gradual."

"Out of our top 15 games, 12 were up year on year," said Tencent Chief Strategy Officer James Mitchell in May. "Whether that is due to pent-up demand or underlying demand, time will tell."