As competitive gaming becomes big business across the globe, with large tournaments and huge audiences, our experts discuss the challenges of the industry in Hong Kong

2 points of view

Derek Cheung, Chief Executive Officer, Hong Kong eSports Limited; Dr SM Lam, Programme representative, HKU Space eSports

ILLUSTRATION: MATTHEW GREEN

+852: How would you describe eSports’ momentum so far?

Derek Cheung (DC) When we launched six years ago, eSports wasn’t an established sector of the gaming industry yet. Now these multi-player gaming competitions are a billion-dollar industry worldwide. You also have live-streaming platforms like Twitch TV, which Amazon just bought for close to US$1 billion.

SM Lam (SL) From an academic perspective, we see a lot of potential for eSports. We introduced two eSports programmes last year, with another to come in 2019. The classes provide a structured training programme and explore business opportunities, such as IT, event planning, stage production, back-end technology services – the entire ecosystem of eSports. However, one of the biggest challenges we face is that of attitude. Many parents and teachers still think eSports are a waste of time and money. That mindset will not change overnight.

DC To add to that, a lot of people here misunderstand the business model, thinking it’s an events industry. That was the case a few years ago, but it’s shifted with the emergence of the “freemium” economy [which offers both free and premium paid services]. Now, as a third-party company, we focus on converting users to download our app and visit our eSports news channels.

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+852: Any other misconceptions?

SL It’s more than just playing a game – you need quick response time, strategic mindset, risk assessment and creative problem solving. Players have to be very smart to excel at eSports.

DC People don’t really understand how much training and thought goes into it. There are just 2,000 professional eSports athletes around the world and less than 20 in Hong Kong. It’s highly competitive. Just like any other professional sport, these players deserve a lot of credit.

 +852: In Hong Kong, what major obstacles does the industry face? 

DC We have seen industry growth, but there are only a few stakeholders who really benefit, such as the gaming providers. The big-name gaming companies have all the leverage, charging expensive licensing fees in order to host a tournament. That’s part of the reason why Hong Kong has never hosted a major international tournament.

SL We also don’t have any large, official eSports venues yet. But there might be one coming up at Cyberport [a government-managed technology and start-up hub]. The government has pledged to spend HK$50 million on a dedicated space for gaming competitions. With a great venue, and support from the government to pay the licensing fees, this could enable Hong Kong to host a major tournament and raise awareness.

+852: Will a venue boost credibility?

DC Yes and no. For greater awareness, it’s a good thing to be able to host tournaments in Hong Kong. But would these pay off? Organisers would have to offset huge licensing fees. Could they drive enough monetisation, attract enough viewers, create new jobs? I am not sure about the return on investment.

SL Yes, I think the venue is important. But government support is crucial where  licensing fees are concerned.

DC And then there’s the players. To have grade-A players, you need to pay them grade-A salaries. Government support could help in that regard, too.

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+852: What else is crucial for growth?

DC We need role models, too. South Korea is doing very well in eSports. They have lots of tournaments, awareness and star players with followings. Having a famous player in Hong Kong would drum up more momentum.

SL Yeah, I agree. If a Hong Kong player could win a League of Legends or OverWatch world championship, that would be huge. It’s great to hear there’s tournaments and investment from the government for a venue. But if Hong Kong can’t manage to find a way to drive revenue from customers for the third-party operators, it will never be a true eSports hub.

+852: What do you foresee happening? 

SL I’ve noticed a huge increase in casual tournaments in malls around Hong Kong – more teenagers are looking to participate. I think Hong Kong is in the early stages of eSports and it will continue to gain popularity.

DC I have stronger feelings about that, actually. A lot of those mall events might not last as they don’t really drive conversion. Hosting these events easily costs half a million Hong Kong dollars. As a company, you’d see better payoff with a billboard, an ad on the MTR, online marketing. We need to think up something new and creative to grow the industry more effectively.