[Cape of Good Hope] Chen Yu of Tencent’s Photon Studio: Can Mobile Esports Match PC Esports?

Esports refers to video game competitions that have reached the level of “competitive” play. When people think of esports, the first things that come to mind are PC games like Counter-Strike, DOTA, League of Legends, and Warcraft III—no one would associate it with mobile games, let alone believe that mobile games could one day produce titles suitable for esports competitions.

In the early years of mobile gaming, mobile esports was probably unthinkable. Even today, many of us still can’t imagine how mobile games—with their simple controls and focus on casual play—could ever reach the level of competitive esports. But reality often defies expectations.

Today, some overseas figures have come forward to share their predictions and speculations. Kristian Segerstrale, COO of the foreign developer Super Evil Megacorp, stated, “Mobile esports will see significant growth and is poised to surpass PC esports in the near future.”Of course, this is merely a prediction. However, at this year’s Tencent Global Partners Conference, we saw the potential. During the “Internet + Games” sub-forum, Mr. Chen Yu from Tencent’s Photon Studio Group shared the following insights: (The following is a summary of Mr. Chen Yu’s remarks compiled by Tencent; some content has been edited for brevity)

Chen Yu: Good afternoon, distinguished guests. This afternoon, I’d like to share with you where the next “blue ocean” might lie.

Mobile gaming is growing extremely rapidly. I recall that when we were developing PC games, growth rates were around 50–60 percent; with mobile games, however, annual growth exceeds 100 percent—even reaching over 200 percent. In fact, Photon primarily develops three types of products: PC games and card/board games.Looking at our current strengths, we have a solid understanding of competitive esports. As IPs for game themes become increasingly expensive and new areas seem harder to find, could mobile esports be an opportunity? Today, I’d like to focus on introducing our product as a step toward the future of mobile esports.

 Here’s a statistic: We’ve held three major tournaments this year, and the number of registrants far exceeded initial expectations. Take *All-Out Attack* as an example—it had over 3 million participants.The year before last, when *Rhythm Master* participated in tournaments, the number of participants wasn’t as high as one might have imagined. With *Air Combat: Everyone’s War*, we began to see this trend emerge, and by the time *Assault: Everyone’s War* came along, we witnessed a leap to a whole new level.

You’ll find that mobile games can fully replicate the experience of PC games. For example, the video we just saw featured many advanced gameplay techniques, such as blind sniping without zooming in and spread sniping.Is this an opportunity for the future? By introducing more competitive gameplay elements—some even unprecedented in PC gaming—into mobile game development, we can transform PC gamers’ initially fragmented and casual engagement into deep, immersive play. This is something we’ve been discussing and actively working on.

Tencent got involved in esports very early on—we began laying the groundwork as far back as 2008. Esports has a long history,I remember that back in 1998, when I was in college, there were already large-scale tournaments in North America. If we divide the history of esports into three phases: the early phase consisted of single-player games from 1998 to 2002; the middle phase featured games like Warcraft III and Counter-Strike until around 2007–2008; and then esports entered a major downturn, making it difficult to break even, which left many people disheartened.I remember friends complaining about this back then. In 2008, Tencent launched three products that significantly reshaped the industry landscape. Recently, the entire esports scene has been booming. We attended a gaming venture capital forum in San Francisco where there were only two main topics. It feels like esports has become a major hot topic in North America as well.Back then, in “Delta Games,” there were three “Team 3” squads in Nanchong, Sichuan, that were ranked number one nationally—the same was true for “StarCraft.” In the second phase, the focus shifted to real-time strategy and first-person shooters. Then came the era of online games, evolving from “Counter-Strike” to “CrossFire,” and from arcade games to “Defense Force.” As this evolution continues, I feel the industry is poised to enter a whole new level of market scale.

If we look at the development of esports within China’s gaming industry, it has actually grown very rapidly—especially after 2008—and very promising business models have emerged. I remember that over a decade ago, when some of my friends were working in the esports industry, their biggest challenge was figuring out how to make money. They’d spend a lot of money organizing tournaments only to end up losing money. This was the main reason why the industry chain couldn’t take off.

Starting last year, following the success of a U.S. venture capital investment, a large number of esports streaming teams and individuals have emerged in China. The other day, while having dinner with a friend, I learned that a team in Chengdu has over a hundred streamers broadcasting daily on streaming platforms, generating annual revenue of over 100 million. I believe this signals a pre-explosive phase for the industry. The entire industry chain is now fully established, with each segment having found its place.

If we were to develop mobile esports games for the future, how should we approach it? How can we better leverage this traffic on our own platforms?

Let’s discuss this topic further below.

If we look at Photon’s past games, they’ve primarily focused on competitive titles. One category is asynchronous—led by *Air Battle*—but later, as hardware, network, and technical limitations were overcome, more real-time games have emerged, particularly this year’s releases *Assault* and *Super God*.

We believe that with technology now mature and users highly engaged, a new business model can emerge. We’ve recently been analyzing our overall market data and have found that casual competitive games have already become a massive segment, rivaling card and board games. There’s a vast pool of data waiting for new game content to emerge.Looking ahead, we’ve also identified significant gaps in our product lineup—many genres remain unexplored, such as sports games.As a developer, what can we do to create such games? Is it possible to turn the 3 million-plus registrations we saw for a single tournament into a regular occurrence? In *All-Star Super God*, we’ll launch a comprehensive tournament series with a complete tournament system that runs on a biweekly cycle: registration on Monday and Tuesday, with matches on Wednesday and Thursday.Paying to compete was something we could hardly have imagined before, but now that the first tournament has concluded, we’ve seen 800,000 users pay 5 yuan to participate, and the tournament generated several million yuan in revenue. This is a business model that can sustain itself.Users continue to sign up for our tournaments; a small number of experienced experts can earn substantial income, while a large number of casual enthusiasts help build a complete business model—without the need to run Taobao stores or shout in livestreams.

In addition to comprehensive online tournaments, we’ll also periodically bring users together for live finals.Taking card and board games as an example, we’ll select the top players annually in Hainan to compete in the year-end tournament finals. We hope to combine this online and offline approach so that users have something to watch year-round—from the beginning to the end of the year—just like in soccer, with leagues, qualifying rounds, and the final championship.

At the same time, we’re exploring whether we can integrate live-streaming modules directly into our game development. The idea is that while you’re playing, the stream would already be active—currently, we rely on external live-streaming software for PC games. We’re currently conducting early-stage technical analysis on this.A user can become a content creator: by clicking on my link, viewers can watch my matches—for a fee of 1 or 2 yuan, of course. We plan to support this kind of activity.

Additionally, regarding tournaments, we’ve observed that—if we look back—Tencent used to host its own annual competitions where players competed in its game titles, culminating in a finals tournament.At the same time, we developed a large “LeDou” system that lists all the players’ names. With a certain update rate each month, we found that this system has actually become the biggest feature of all our tournaments—the one with the highest user engagement.We’re also exploring ways to forge a closer connection between users and the tournaments. Users enjoy this kind of fun and are mentally engaged—they have to calculate odds, keep track of the action, and invest even more deeply.

We’re also aware that in the U.S., competitions are crowdfunded and can reach scales in the tens of millions. I was quite surprised when I first heard about this, but I don’t think that’s the limit. It’s quite possible for a single contestant to earn over 100 million, or even more, from a single competition.As for the biweekly tournament cycle we mentioned, a single event already attracts 5 million participants, so the total entry fees alone could reach 100 million. Assuming all that money is allocated as prize money, the total prize pool could reach hundreds of millions of RMB.

But these are just elements beyond the core gameplay. Each of these is also a window of opportunity. When we’re considering what kind of “blue ocean” our next-generation games should target, this approach will provide stronger momentum—with strong social elements, the ability for player-versus-player competition, and a solid business model.Are we replacing certain core gameplay elements? A system like this can help us manage the game effectively. This is also the direction our team has been constantly pondering and striving toward.

Social aspects of tournaments. We’re also in discussions with WeChat to fully integrate in-game team allegiances with QQ groups. With this kind of “gaming clan” strategy in place, the entire ecosystem will be interconnected. Management, organizational structures, announcement systems, and payment models for your team members will be displayed within the game and mirrored in QQ groups.Perhaps we can extend this tournament-based in-game social networking to larger platforms as well. We’re still exploring this.

That’s a brief overview—I hope this serves as a starting point for today’s discussion. Later, more experts will share their long-term visions for the future of mobile gaming. We look forward to collaborating with industry partners. As for esports, I’m personally very passionate about it—I’ve been involved since the 1990s, from PC gaming back then to mobile esports today. I’d also like to thank AppStore and the Open Platform, and thank you all.

We recorded a video of Mr. Chen Yu’s presentation. Here is the video: (This video was recorded and edited by Game Tea House. The presenter is Mr. Chen Yu, President of the Photon Studio Group.)

After reviewing this presentation, our editor looked up some data and is sharing it with you again: “Of 1,262 Chinese mobile gamers surveyed, 56.6% explicitly stated they would consider participating in competitions if given the opportunity; 42% indicated that while they wouldn’t compete, they would be willing to watch competitions” (data sourced from iResearch).

Mobile esports is a vast arena and a massive industry, supported by a complete industrial chain. In my opinion, mobile esports tournaments will not be outdone by PC esports,based on game modes, gameplay, and visual appeal. Of course, this isn’t an absolute rule, but I believe that once mobile esports has developed further, its scale will certainly be much larger than that of PC esports.Although mobile esports is limited in terms of the excitement and intensity of the games themselves, it offers tremendous advantages such as the ability to participate anytime, anywhere, a massive user base, and broad appeal across all demographics—including men, women, the young, and the old.

In the future, none of us can predict exactly how the mobile esports industry will evolve or what scale it will reach. However, since mobile esports games are still relatively few in number—at least representing an opportunity within the highly competitive mobile gaming market—whether they’re worth investing in ultimately depends on how each of you views the situation.