Hangzhou, China is a tourism hotspot with scenic lakes, thousand-year-old temples, and now a brand new esports town complex spanning 3.94 million square feet. (That’s the size of about 68 football fields.)
The esports town, operated by the local government, opened its doors to the public Nov. 16. It cost 2 billion yuan to build, Fox Sports Asia reports. LGD Gaming, a Chinese esports organization that owns several successful teams, and Allied Gaming, which owns a network of esports arenas around the world, have a joint office and esports venue in the complex.
According to an article on People.cn, the city expects the complex to attract more than 10,000 aspiring esports professionals and 1 billion yuan in tax revenues. Hangzhou said it plans to build 14 esports facilities before 2022 and will invest up to 15.45 billion yuan to do so. These new projects will include a theme park, an esports academy, an esports-themed hotel, and even a hospital specializing in treating players.
The complex is the first of its kind to open in China. It will not be the last. Chinese company Tencent, the largest video-game company in the world, is building in the city of Wuhu in east China. That development will have an esports university and an esports theme park, among other facilities. Earlier this year, Taicang, also in east China, announced plans to open an esports town.
Hangzhou has an edge on the global stage. The city will play host to the next Asian Games in 2022, where esports are expected to be an official medal event (in 2018, it was a demonstration sport). A Forbes report estimates that esports industry revenues could be $1.65 billion by 2021 worldwide, and China alone is estimated to drive 18% of total esports revenues in 2018. With its investments, Hangzhou is getting ahead in the game.
Invictus Gaming, the Chinese team, thrashed its European rival Fnatic 3-0, taking home the giant silver “Summoner’s Cup” and more than $840,000 in prize money.
The rise of esports in China has been even more dramatic than elsewhere. Nevertheless, money has poured into Chinese esports, and the country now has a pivotal influence in the global market.
Esports will generate $906m in revenue globally this year, according to consultancy NewZoo, while a Goldman Sachs projection suggests 35 percent annual growth and a revenue figure of $2.96bn in 2022.
The main winners from esports have been game developers, for whom China is their biggest market, according to consultancy Niko Partners.
“Our optimism and support for esports is long term,” Tencent’s chief operating officer Ren Yuxin told a conference in June. “In the future, we will invest far more resources, personnel and capital in esports compared to in the past.”
China is home to more than a dozen professional esports teams. But those revenues are outweighed by the rising costs of wages in an increasingly competitive environment. Top players can demand more than 1 million yuan a year in wages, while transfer fees for top players are typically around 1 million yuan -2 million yuan.
“We are making a loss, but its less and less each year,” said Lu Wenjun, chief executive of Team OMG. “We expect to break even in a year.”
Teams are becoming more professionally run. “Wealthy founders realise that it is no longer enough to rely on their own money,” said David Ng, EDG’s chief executive. “They must introduce investors and find a business model.”