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Konvoy Ventures is a thesis driven venture capital firm focused on the video gaming industry. We invest in infrastructure technology, tools, and platforms.

Activision and Hong Kong

Activision vs. Hong Kong, data points on streaming

Activision vs. Hong Kong

Activision Blizzard banned a professional Hearthstone esports player because of his comments in support of the Hong Kong protesters. Here is a good synopsis from The Wall Street Journal:

“Activision Blizzard, one of the world’s biggest video game companies, on Tuesday said in a blog post that “Hearthstone” competitor Ng Wai Chung, known as “Blitzchung” in the game, violated its rules that bar players from actions it considers offensive to a public group or that could damage the company’s image.

The gamer, in a live online interview after winning a match on Sunday, said “Liberate Hong Kong, revolution of our time,” a slogan commonly associated with the protests. He wore a gas mask and goggles while he spoke. Hong Kong last week banned protesters from wearing masks.

Activision Blizzard said the player, who had no immediate comment, won’t be allowed to compete in the second season of the digital card game’s Grandmasters competition and will be banned from playing any of the game’s company-run competitions for one year. He also lost the $7,000 awarded for making it into the tournament’s second season plus the chance to win up to $200,000 in prize money.”

China is one of the largest video gaming markets in the world ($40B in 2018), so Activision Blizzard has a keen interest in not upsetting Chinese authorities. While the backlash from the gaming community is substantial (#BoycottBlizzard - the backlash is intense), Activision Blizzard is unlikely to do anything to upset their revenue out of China. Activision Blizzard derives ~5.2% ($377M) of its total revenue ($7.26B in 2018) from mainland China, nearly double from a year ago.

Blizzard is also watching China’s backlash at the NBA, which is undoubtedly influencing their reactions to the Hearthstone player’s comments. In the past week, China has canceled the preseason broadcasts of the NBA after the Houston Rockets GM (Daryl Morey) posted a message on Twitter last week also in support of the Hong Kong protesters.

Unfortunately, China does not share the core value of free speech we enjoy here in the United States and much of the world. Hong Kong’s situation is a difficult one to navigate given many of its values are in stark contrast to much of its absorber.  My fear is that we will see China’s further crackdown on free speech continue to impact game publishers like Activision Blizzard, who are economically handcuffed to the Chinese economy’s purchasing power.  

In conclusion: Activision Blizzard’s choice to ban a player for taking a stance on something he views as an injustice is a slippery slope. I’m unimpressed by the management of Activision Blizzard today.

3 Data Points on Streaming

Streamlabs and Newzoo came out with a report on the streaming platforms. Below are 3 highlights that I found most interesting and my takeaways on each.

1) Hours Watched by Genre: The top 5 genres generate a relatively similar amount of viewership on Twitch. I find that interesting because regardless which genre I personally prefer, there seems to be an equal amount of viewership for the others. There is only a 15% delta between Role Playing and Adventure, showcasing how mature the video gaming market has become over the past 50 years.

2) Hours Streamed by Platform: hours streamed is in reference to the content creators (streamers), not the viewership side. Mixer has increased from 11M in 2Q19 to almost 3x in 3Q19 at 32M hours, which coincided with the exclusive deal with Ninja that likely led to other streamers following him over to Mixer. YouTube Gaming remains a platform for the discovery of historical content, as it has seen lackluster growth in it’s Live streaming, which is down from 12M in 1Q19.

3) Hours Watched by Platform: viewership on each platform still has Twitch well in the lead with YouTube in a commanding 2nd place. Even though Ninja came over to Mixer, totals hours watched hasn’t changed dramatically from 83M in 1Q19 to 90M in 3Q19. Going forward, I’d expect Mixer to slowly close the gap to YouTube, who should be doing a better job of catching up to Twitch than they are today.