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24 June


Chinese analogue Twitch want to attract American gamers

The company expects to receive about 500 million dollars on the stock exchange in the US

Photo: SCMP

/NOVOSTIVL/ Douyu International Holdings Limited, China’s biggest gaming-focused live streaming platform, has filed to go public in the US as it seeks to fund efforts to gain more eyeballs from the country’s younger generation. This article appeared in the South China Morning Post.

The Tencent Holdings-backed company on Monday filed for an initial public offering on the New York Stock Exchange, with plans to raise up to US$500 million to invest in e-sports content, R&D, and marketing, according to its prospectus. The filing comes almost a year after its closest rival Huya Inc, also backed by gaming giant Tencent, raised US$180 million in the US.

While Douyu has often been dubbed "China’s Twitch", a closer examination reveals the Wuhan-based company’s business model is actually quite different to the Amazon-owned game streaming service.

For one thing, Douyu’s revenue stream is highly dependent on its users, who buy virtual gifts ranging from toy rockets to fish balls to tip their favourite streamers. In 2018, live streaming revenue kept growing to contribute 86 per cent of Douyu’s total net revenue for the year, according to its IPO prospectus.

San Fransico-based Twitch, owned by e-commerce giant Amazon, makes money through various channels including tipping, subscription and advertising. In 2017, ads generated 58 per cent of the platform’s gaming video content revenue, according to an estimate by research firm SuperData.

In 2018 Twitch set a US$1 billion target for ad revenue, Bloomberg reported last August, citing unnamed company sources. By comparison, Douyu booked a mere US$74 million in ad revenue last year, according to its prospectus.

Tencent has put more than US$1 billion into China’s top two game streaming networks over the past year.