Hong Kong and ESports: An Economic and Social Look at a Booming Business.

By Angus Yam and Emil Aaby

On most days at around 2 to 3 o’clock in the afternoon, Daniel Chok wakes up. Daniel is 19 years old, and at first glance and with these bits of information, most people would probably write Daniel off as a lazy teen who spends too much time in bed. But this is nowhere near the truth.

During the early hours of the evening at around 6 PM, Daniel starts going to work. He does this from his living room in the apartment he shares with his parents. At night time the traffic on the North American servers of the game Players Unknown BattleGround (PubG) is at its highest, which is why Daniel has to be awake for it.
“This time is the peak times for professional gamers, as most of the talent scouts are from North America as well as most of the leaderboard scoring players.”

Daniel is on a quest, for which he has given himself an ultimatum. He has three years to become a signed professional gamer within the growing eSports industry.
He’s currently ranked as the 9th best player in Asia and has previously figured in the top 1% overall in worldwide player rankings, but the gaming community is full of young men and women like Daniel, who have dedicated their time to becoming the best there is.
Like in any sport, the road to the top requires hard training and uncompromised focus, with personal sacrifices bound to occur along the way. Daniel commented, “It is like a fulltime job with a lot of commitment, if I suddenly take a few days or a weekend off it will make a lot of difference when compared to the other similar tiered pro-gamers. Also the rankings may slide in just a matter of days. So I have to plan my schedule weeks in advance.”

Daniel Screenshot
Like the vast majority of serious gamers, Daniel also livestreams his games on twitch.com under the name qgschoolq1gen. This screengrab is taken from the dying moments of a PubG match.
Photo by Daniel Chok

A paradigm shift is happening at the moment regarding the general attitude towards gaming. In the past, and to some extent still in the present, gaming has been thought of in many negative senses. It has been seen as a catalyst for bad health, growing escapism, mind-numbingness as well as a medium that encouraged aggression and violence. But these assumptions are now being addressed and challenged due to the emergence and growing popularity of eSports.
“It really depends on the person, if you’re a violent person you’re going to be violent anyways regardless of video games. But if you’re a peaceful person then you’ll be pretty chilled out like me.” Daniel reflected upon the link between violence and gaming.

Daniel has played video games his entire life, but it was only 4 years ago, that he realized, that one could make a living out of it. “When i got recruited by eSports Hong Kong, I was only 16. So I caught the initial wave of pro-gamers, so the management level and agents know who I am. That’s when I realized, “Why not give it a try?” I’m good and I enjoy what I do. It was also a rare opportunity seeing that entering the market now is more difficult.”
Daniel decided to put every effort into reaching his goal of becoming a pro gamer. To support himself economically for now, Daniel – who is also a talented dancer – teaches dance classes in Hip Hop and Breakdancing.

Daniel’s parents are very supportive of his decision to try and make it in eSports, as they too see the rising trends of e-gaming as well as Daniel’s competence in gaming as shown by his global rankings, along with the fact that Daniel keeps a fit, healthy and active social life. “They don’t mind at all. As long as I can make a living income and I can support myself, then it’s fine.”

Daniel explains the importance of good health among pro gamers.

Video gaming is a modern form of entertainment that started during the 1970’s and quickly gained popularity by capturing the hearts of its audiences. Nowadays, coupled with the rise of the internet era, players with the same taste in games can connect with each other and explore the virtual electronic world together no matter where they are located in the real world.

The current genres of choice for gamers globally include: First Person Shooters, Multiplayer Battle Royale, Multiplayer Online Battle Arenas, Fighting games, Role Playing Games and Collectible video card games. These games serve unique thematic experiences too. Some games feature sci-fi, horror, realism, fantasy and many more. With all these different choices video gaming can cater to almost everyone’s interests.

The rise of the internet provided the perfect conditions to not only develop a global market, but it also started a culture and an industry known as eSports. Esports, much like its real-life sports counterpart, involves professional teams of gamers that compete with and against each other in front of stadium-packed audiences that are as captivated as much by eSports, as regular audiences are by popular sports such as rugby and football.

Esports is an emerging market which grew tremendously during the 2010s with the initial cluster of companies within the eSports industry that formed in the early 2000s. From 2012 to 2017, the total market revenue from eSports grew from 130 million USD to 655 million USD. Most of the revenue came from sponsorships and advertising, with North America and Asia being the largest eSports market. With the total eSports audience size globally being 380 million individuals.

Hong Kong has a substantial video gaming industry too, with a total 301 million USD revenue generated in 2017.  The majority of the revenue generated within the video gaming industry is not sourced from the eSports industry, as the Hong Kong eSports industry is still at its infancy compared to America and European countries. Mobile games across iOS and Android take up most of the market share in terms of revenue with 148.1 million dollars (2017) generated from these games either through microtransactions, one-off purchases or periodic subscriptions. However, the online gaming industry which is the underlying industry that eSports grew its roots from doesn’t lag behind mobile gaming by a large margin with 112 million (2017) generated.

The user base in Hong Kong that generates the revenue for online games consists of 1.14 million users. With Hong Kong’s total population being at 7.42 million, that is a 15% market penetration for just online games alone. Mobile games however have a market penetration rate of 35%, with 2.64 million users. With such a large potential market in Hong Kong, along with examples of esport’s financial success in North America regions, the future of eSports in Hong Kong is bound to expand exponentially.

ESport events in North America and Europe hold extravagant tournaments with massive earnings for players and their investors/stakeholders alike. These factors present a large growth potential for eSports companies and investors to grow in Hong Kong. With Hong Kong’s iconic billionaire business mogul Li Ka Shing investing into Razer, a major player in the eSports industry, as their main hardware supplier and sponsor for eSports events and professional players.

The investing into Razer by Li Ka Shing in order to back the company’s Initial Public Offering and the fact that Razer raised 3691 million HKD (470 million USD) means that even top investment banks within Asia’s financial center sees the potential of gaming as an industry within the near future.

All these events has allowed for online gaming to become recognized as a legitimate industry with potential for both the prospective professional players and the developers.

A PubG gamer checks his in-game inventory in the packed i-ONE Internet Café in Causeway Bay.
Photo by Emil Aaby

The most popular opinion amongst the older generation of the local Chinese population on online gaming and its impact on the youth are often negative. Gaming is viewed as unconstructive and a waste of time for their children.

“My son Joshua uses a large portion of his free time playing computer games or games on his phone, he doesn’t understand that he can use his time more constructively. Like on learning a bit more about anything through reading books or even exploring our neighborhood and playing outside.” Mrs. So, parent to a secondary school pupil, commented.

These opinions are more prevalent within the traditional Asian parents, however westernized local Chinese parents with kids in international school often view gaming in a more liberal sense. “It’s just a form of stress relief, everybody has one. I’m just glad its not drinking or smoking for my kid.”  Ms. Nyian a parent of a pupil in an English Schools Foundation (ESF) school commented. Most expat parents also see it in this perspective as well, where gaming is just a method of unwinding, de-stressing and having a good time.

The cultural difference of traditional Asian Hong Kong Chinese parents and westernized parents is obvious. This is due to Hong Kong local Chinese parents prioritizing academic achievement above everything else, often times the parents do not give much thought to their children’s leisure activities. As academic achievement in their perspective almost always guarantees success in the future. This results in large amounts of pressure through expectation towards their children.

Despite the sometimes negative views from parents, Hong Kong’s netcafe’s are most often fully booked by eager young gamers. At i-ONE Internet Café the business has been booming for the past 2 – 3 years, according to the café’s manager Mr. Shi.
Photo by Angus Yam.

Riding along with these opinions towards online gaming, how will these different groups of parents view gaming as a career? Mrs. So commented, “I would never even think of my children ever participating in the gaming industry as gaming professionals, maybe as a part of research and development staff or a part of their corporate structure.” To the same question Mrs. Nyian commented, “Whatever my kid does, its up to them as long as it’s a responsible and well thought out decision. The freedom is theirs.”

For Daniel, who still has a year and a half left to complete his three year ultimatum, the future is hopeful. “Things are looking good, I’m in talks with a few agencies in Hong Kong and China. If I can turn this dream into something that also guarantees me success and stability, I would be the happiest man ever.” 

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