By Xavier Kong
eSports continues to grow both locally and globally, with the Asia-Pacific region and Southeast Asia being major consumers of this particular brand of entertainment. However, the media coverage of this burgeoning global entertainment industry is expected to provide minimal contributions to the ailing media sector in Malaysia.
According to MIDF Research analyst Khoo Zhen Ye, “earnings contribution from eSports is expected to remain minimal, and the media industry is still experiencing tough times amidst the transition from traditional to digital media.”
MIDF defines eSports as “an activity of playing computer games against other people on the internet, often for money, and often watched by other people using the internet, sometimes at special organised events,” citing the Cambridge Dictionary.
Khoo noted that the audience and viewer count for eSports content has been spurred by the network effects of popular games, growing amounts of prize money, the rising demand of live-streaming, and the increasing availability of proper infrastructure for eSports leagues.
At the same time, with eSports being featured as a medal sport at the 2019 Southeast Asian Games and being considered for inclusion in the 2024 Paris Olympics, the sector steps closer to being considered on par with traditional professional sports leagues moving forward.
eSports have seen a growing trend of investments over the past five years, with a total global investment of US$4.5 bil in 2018 alone.
“For instance, Tencent Holdings has invested US$632 mil and US$461 mil in Douyu and Huya TV, the two streaming platforms where most of the eSports contents in Asia are viewed from. This indicates the future potential of the eSports economy and its staying power through the increasing investment dollars into this space,” Khoo said.
The MIDF analyst also noted that media companies will be the catalyst for Malaysian eSports, considering the business potential of the activities.
“Given that YouTube Malaysia reported that gaming content is about three times bigger than all sports combined in 2018, this indicates a growing demand for eSports content in the country, especially on mobile gaming.
“Two of the largest media companies in the country, namely Astro Malaysia Holdings Bhd and Media Prima Bhd, have launched their own eSports arms which are “eGG Network” and “MyGameOn (MGO)” in 2016 and 2017 respectively. The eSports arms have taken on the mixed roles of tournament organisers, media platforms and game publishers,” Khoo added.
Challenges ahead
Unfortunately, Khoo also sees challenges ahead in terms of eSports growth here, citing the lack of a synergistic ecosystem, unappealing monetary incentive, and the lack of prioritisation of local content and services.
“At present, the ecosystem is still in its nascent stage and many of the initiatives are still not fully developed and thought through. We understand that there is still some confusion surrounding the allocation of the eSports budget. There has also been some resistance in providing eSports curriculum, citing the negative side-effects of gaming such as addiction, poor time management and lack of social skills, among others,” Khoo said.
There is also concern among industry leaders on the lack of funding and low monetary value for eSports teams, which has led to a brain drain. Local players joining China teams due to better remuneration is a case in point.
While there is a growing interest in Malaysia from foreign game publishers such as Sony Interactive Entertainment and Larian Studios, this is insufficient, and results in a slower pace of growth in terms of promoting and nurturing local eSports talents and events.
“Meanwhile, local products are also not supported by Malaysians. There are plenty of local companies providing services and goods to the eSports ecosystem such as Todak Gaming, the Orange Cybercafe chain, Pantheon, and Sades in which Malaysians could opt for,” Khoo said.
Ultimately, while Malaysia possesses the right set of factors to develop the eSports industry, the industry remains in its infancy here, with the potential for growth. Khoo believed the upcoming set-up of studios by international game developers and reputable game entertainment companies in the country would further cement Malaysia’s position as an eSports and gaming hub in Southeast Asia.
In addition, the attractive business potential of eSports and gaming content as well as a vast eSports enthusiast base would allow Malaysia’s eSports industry to continue to grow at a healthy rate.
“The investments made in eSports by Astro and Media Prima and their efforts in exploring this new segment of revenue are beginning to bear fruit. This can be seen from the occurrence of eSports tournaments and events taking place in the country.
“We also postulate that monetisation opportunities remain aplenty once the ecosystem becomes more mature and less fragmented.
“Nonetheless, the revenue and earnings contribution from eSports at this juncture remain minimal. While there is notable traction in the eSports realm, the media industry is still overwhelmed by grave concern on the traditional media front. On this note, we are maintaining our negative stance on the media sector,” Khoo concluded.
