Alibaba betting on long-term gain from eSports investment

The burgeoning electronic sports industry still does not attract the sponsors and television rights of the real sports, but the Chinese e-commerce conglomerate Alibaba believes that it is only in the past. a matter of time before his gamble on competitive video games is huge.

Alisports, the sports arm of Alibaba, was inaugurated in 2015 with the aim of enjoying the burgeoning world of electronic sports, where players compete in lucrative video games tournaments that attract millions of viewers.

"We are ready to lose money, we can accept the losses now because we hope to promote this sport," said Zhang Dazhong, CEO of Alisports, during the European final of the second edition of the World Electronic Sports Games of Alisports. (WESG) in Barcelona, ​​which ended on Sunday.

"For a sport that has a lot of participation, it must have a bright future, even if for the moment you do not win much money, in the future, you will certainly be rewarded Believe firmly in. "

In 2016, Alisports entered into an agreement with the International Electronic Sports Federation (IeSF) to create WESG, a leading international market tournament.

The first edition of WESG saw 63,000 participants from 125 countries face a $ 5.5 million pot.

Still, the results were not so lucrative for Alisports, which lost 70% of its investment. "We estimate that we will lose money for the next five years," Zhang admitted.

The strategy of Alisports, however, is a long-term strategy.

"We estimate that here five to ten years … the business model will be more complete, in addition to competitions, we must keep in mind the electronics and marketing related to eSports, "added Zhang. ]

Participation in eSports has exploded as virtual games gain ground with a worldwide fan audience estimated at 400 million people according to a Deloitte study, more than for the National League of Baseball or American Football.

The size of the electronic sports market will more than double to $ 696 million this year, up from $ 325 million in 2015, according to the Deloitte study. He predicts that the market will be worth $ 1.5 billion in 2020. But the market is fragmented, with different operators organizing their own tournaments, and sales of television and merchandising rights remain low.

An eSports fan earns only three euros a year on average, according to a recent study by the Nielsen Sports market research group, against 30 euros for a football fan.

Yet, Alibaba believes that its position as the market leader in China, the global eSports hub, ensures that the return on eSports will be plentiful. "In China, we have 1.8 million eSports fanatics and 65% of them are between 18 and 25 years old," Zhang continued. "They play video games, but they also buy all kinds of Alibaba products, we understand them very well."

The surge in popularity has contributed to the belief that professional gaming could become an Olympic discipline, but not everyone is convinced.

"I think we need to differentiate between e-sports and games in general," Zhang said when asked to talk about the controversy.

"The game is of course not a sport, but electronic sports involve a high-level showdown, teams, individual resistance, so I think it's a sport." And I think that sport in general is evolving towards a combination of technology and physical activity. "

Zhang said that he hoped that eSports will be part of the 2024 Olympics in Paris or the 2028 Olympics in Los Angeles.

"This could happen because at this year's Asian Games and Asian martial arts, we have already made a demonstration of games: at the Asian Games in Hangzhou in 2022, it is already an official event ".

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