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With the recent growth of live streaming platforms, Daily Esports conducted an exclusive interview with Vera Ran Wei, Deputy General Manager of the Marketing Department at Chinese streaming platform Huya (NYSE: HUYA). She spoke on topics like the market landscape, mobile esports, rise of non-gaming broadcasters, streamer acquisition bidding wars, and how Huya envisioned the future of live streaming platforms.
Daily Esports: Huya has seen rapid growth in net revenue and paying customers, with numbers that have consistently beaten DouYu in the Chinese live streaming market. What is Huya’s take on the current landscape?
Vera Ran Wei: While Huya and DouYu both stream esports, Huya’s audience is more heavily focused on the gaming industry. As a result, we are able to focus on continually improving the esports viewing experience specifically, without diluting development to include other content.
The caliber of our platform has led to consistent growth in paying customers looking for the highest-quality esports experience – we believe our consistent investment in infrastructure and development of esports content creators will continue to improve our users’ experiences.
Mobile gaming is a huge part of Huya’s user base, with popular titles like Honor of Kings and Peacekeeper Elite. Can mobile esports achieve the same popularity in the West that it has overseas?
Mobile gaming is on the rise across the world as smartphones become more and more ubiquitous, and basic mobile games like Candy Crush and Clash of Clans have held onto consumers’ interest for a number of years, generating strong profits.
We believe that the growth in mobile gaming will include the Western market and that, in the next few years, we will see a pronounced increase in the popularity of mobile games.
In China, the majority of streaming revenue comes from virtual gifts donated to broadcasters. Only 5% in Q3 of 2019 was attributed to digital ads, but subscriptions and advertisements are significant on market leaders like Twitch. Why is there such a difference?
The biggest difference is cultural; in China, users demonstrate their experiences by giving virtual gifts to favorite broadcasters. In the U.S., users show support and loyalty through subscriptions instead. Both of these models generate profits for streamers based on the quality of users’ experiences, but the difference in expression varies from country to country.
That said, both models are growing closer to each other; in Q4, Huya’s advertising revenue increased 92%, to $17.1M USD. This was primarily due to higher demand from advertisers and a new advertising distribution platform we launched in Q3. We are continuing to develop more diverse forms of advertising on our platform to create better value for users and advertisers alike.
The Western market has a greater amount of game streamers. On the other hand, non-gaming broadcasters make up around half or even the majority of streams on Chinese platforms. Will the U.S. see a similar future theme?
Streaming is becoming less niche around the world, so we do believe we will see an increase in non-gaming broadcasters. However, at the same time, we are seeing increased traffic and interest in esports that will continue to develop that market specifically. So the U.S. will see both markets grow, especially as quarantines spike user demand for content.
Speaking of content, diversification is one of our long-term strategies. In addition to bringing more games and esports tournaments to our growing user base, we also cultivate non-gaming content such as anime and comics, outdoor and traditional sports, food, online theater, and education. In Q4, more than 55% of our users watched non-gaming content on our platform, and non-gaming content generated around 45% of our streaming gross revenues.
We have launched a series of initiatives to further enrich our non-gaming content, such as Huya Electronic Night — an ACG event featuring performances from virtual and live broadcasters. On the outdoor and traditional sports content front, we organized Huya Kungfu Carnival, a mixed martial arts competition that invited Huya’s celebrity outdoor broadcasters to join the stage and compete with professional fighters. The live event generated more views than the average daily viewership of League of Legends All-stars.
The streamer acquisition bidding war has only just recently begun in the West. However, this has been going on for several years in Asia, with some platforms failing even after poaching well-known names. How do you think this will play out?
Paying top dollar for famous streamers is part of the mix for esports companies, but it is not enough on its own. Streaming companies need to continually improve their platforms and listen to user feedback so they can deliver a high-quality experience to both users and content creators. Great content must be supported by a robust infrastructure and an engaging user interface.
Many Western platforms have not seen much innovation in recent years. How do you envision the future of live streaming platforms?
Broadly speaking, with more market entrants, we will see more competition. But while there is more competition, the market of gaming viewers is also expanding and changing.
We believe competitor pressure will force companies to innovate or shut down, and this innovation will increasingly differentiate the platforms that remain. As the streaming audience grows, remaining companies will be able to increasingly focus attention on their core audiences and markets and develop better products for those specific users.
In a more timely sense, the COVID-19 pandemic has locked many people at home. Platforms can take this opportunity to think about content innovation as people increasingly seek out entertainment, education, and exploration content online. We are continuing to innovate and operate based on user demand.
Daily Esports thanks Vera Ran Wei for her time.
Ethan Chen is a writer with over 3 years of experience covering esports, gaming, and business.