Edited by Guojin Securities: "Mobile e-sports special analysis report: IG team on behalf of China lifted the LOL World Championship for the first time, but then what?" "

Guojin Securities pointed out that after IG entered the LOL World Finals, "People's Daily" published an article that "games are not scourges". Today, when there is great regulatory pressure in the game industry, the champion of IG can be described as providing timely help and may strive for a looser regulatory and media environment.

E-sports (Electronic Sports) is an intellectual confrontation sport with electronic equipment as sports equipment and electronic games as sports content.

Guojin Securities believes that the future of the game depends on e-sports, and the future of e-sports on Mobile e-sports. The so-called Mobile e-sports is an e-sports activity based on mobile devices (mainly smartphones). Mobile games have long been the main growth engine of the global industry, but Mobile e-sports has just entered the mainstream.

1. Mobile e-sports industry chain

Thanks to the scale and popularity of China Mobile Limited's game industry, China can be said to be one of the fastest growing countries in the global mobile e-sports industrial chain. After years of development, the industrial chain has become mature. In addition to the upper, middle and lower reaches, the whole industry chain also involves policy supervision, e-commerce channels, commercial sponsorship and other links.

• Upstream: game content provider

Guojin Securities believes that without a large audience and well-produced games, e-sports events can only be castles in the air.

In the field of PC e-sports, Blizzard's "Warcraft", "StarCraft", "hearthstone Legend", "Watch Vanguard", "DOTA2" of V Society, "FIFA" series of EA, "League of Legends" of Riot, and "PUBG" of BlueHole are all unavoidable projects. In the field of Mobile e-sports, Tencent's "Arena of Valor" and Supercell's "Royal War" are also outstanding of their kind.

Guojin Securities believes that in the upstreamTencent is a well-deserved overlord.Is the producer or strategic investor of most popular mobile e-sports games

• Mid-stream: event organizers and content producers

Guojin Securities believes that the event is the core link of Mobile e-sports, which directly determines the number of spectators and word of mouth. The game is organized by both game companies (first party), independent commercial organizations or governments (third parties), and players participate in the event.

It is generally believed that the first-party event not only has independent value, but also a means of game marketing and promotion, which has a stronger impact than the third-party event. at present, the well-known mobile e-sports event is indeed almost the first-party event. However, Guojin Securities believes that as the value of the event itself is further discovered, there will be more third-party events in the future.

• Downstream: content disseminator

There are mainly three kinds of content dissemination of Mobile e-sports: e-sports media, TV channels and major live broadcast platforms. in addition, in the hot self-media industry, there are also a number of vertical self-media focusing on e-sports content production and dissemination.

2. Important links of the industrial chain.

• Policy support: an important factor affecting development

In recent years, more and more state departments have begun to openly support e-sports 's industrial development. In 2018, the game industry is facing a lot of regulatory pressure, such as the suspension of version numbers and total control, but when e-sports of China won the gold medal and the IG team won the LOL world championship at the Asian Games, the state media will still applaud, bringing a rare dawn to the game industry.

Guojin Securities believes that e-sports will continue to face a relatively relaxed regulatory environment, and even feed the entire game industry.

• E-sports Live: the link with the most commercial potential

In the whole industrial chain, the business model of the upstream game content side has long been verified. Game giants such as Tencent and NetEase, Inc all have a lot of income from mobile e-sports games; the clubs and event organizations in the middle reaches have not yet made a profit, and the scale of event content production is still relatively small. Therefore, Guojin Securities believes that the downstreamE-sports live broadcast platform is the most potential part of the whole industry chain.。

3. Investment suggestions

Middle and upper reaches:TencentIt has realized the closed loop of e-sports industry from product supply and event holding to content production and content dissemination.NetEaseFill the deficiency in competitive games and launch the brand "NetEase, Inc e-sports NeXT"AlibabaHe entered the game late, but actively held events, promoted e-sports 's entry into Asia and the Olympic Games, and set up offline venues to enhance their strengths and circumvent their weaknesses.Giant networkAlso around the active layout of its products and agent products.

Downstream:HUYA Inc.And DouYu International Holdings Limited are currently in the first echelon of the game live platform.

4. Risk hint

• The game industry as a whole, including e-sports, still faces the risk of tighter regulation.

• Mobile e-sports may face the risk of being replaced by emerging technologies such as VR/AR.

• Industries such as e-sports events and live broadcasts may face the risk of immature business models.

• The game giant's investment in e-sports 's industry may fail, resulting in write-down risks.

• The risk of e-sports 's live broadcast platform being overvalued.