VSPO, a Chinese esports startup specializing in tournaments, venues and production, has obtained a 1.8 billion yuan cash ($265 million) investment from Saudi Arabia’s Savvy Games Group, setting a record for cash investment in the esports industry and the sports industry as a whole in the last two years in China. Savvy, owned by Saudi Arabia’s Public Investment Fund, will now become VSPO’s single largest equity holder.
VSPO was established in 2016 and has accumulated extensive operating experience in Asia. Since its establishment, the company has received many rounds of financing with investors such as Tencent, Tiantu Capital, Sequoia Capital and ZhenFund climbing aboard. Especially after winning Tencent‘s investment, VSPO successfully became the exclusive operator of competitions such as League of Legends, Honor of Kings and PUBG.
With the ending of the epidemic, offline esports events are finally expected to fully recover in 2023. “Attracting international capital this time is a matter of course,” Dino Ying, CEO and Founder of VSPO, said. “The company has been cultivating the esports market in the Middle East in recent years. We have successfully held the first esports festival in Dubai and a competition in Saudi Arabia, and established cooperative relations with local government departments and a large number of partners.”
There are 23.5 million gamers in Saudi Arabia, accounting for 67% of the total population. However, there are only about 100 professional esports players in Saudi Arabia, and there is a lack of well-known esports clubs and local competitions.
In the technical field, with the popularization of 5G, cloud technology and artificial intelligence, higher requirements are put forward for the live broadcast of esports events. “This year, our AI-Camera and AI-Ob will be launched one after another. The goal in the next three years is to replace more than 50% of competition production work with AI,” said Ying. The company is also paying attention to VR, AR and AIGC technologies.
Affected by the epidemic, the income of China’s esports industry declined in 2022. According to China Audio-video and Digital Publishing Association, the revenue of China’s esports industry in 2022 was 144.503 billion yuan ($20 billion), down 14.01% year-on-year. Among them, China’s esports game revenue was 117.802 billion yuan, down 15.96% year-on-year. In terms of types of events, only 31% of these esports events were held completely offline.
However, Ying is full of confidence in the development of China’s esports market, especially the upcoming Hangzhou Asian Games in the second half of this year. The tournament will include eight games, such as Honor of Kings, League of Legends and DOTA2, in the list of the official medal sports.