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Newzoo, Gamma Data Partnership More Bad News For NA Esports

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Esports market research company Newzoo announced a new partnership with Chinese esports research firm Gamma Data. This comes on the heels of Newzoo and The Esports Observer both being acquired by Advance Publications in October.

This puts the North American region further behind the strategic competition curve in esports. While China, Korea, and most of the EU and Africa jump on the technological bandwagon, the majority of North American business is still working to develop a profitable business model for esports.

China Is Ahead By More Than We Know

The acquisitions of TEO, Newzoo by Advance, and now this strategic partnership place the Chinese market firmly in control of the growth path for the next 10 years. Controlling the dissemination of information while also having access to insight available for sale to other major firms means China, and by default Tencent, will see every new idea and trend well before anyone else and be able to react appropriately.

I get that Advance is a media company based in New York City. Buying Newzoo then partnering with Gamma Data in such a short time frame means Chinese influence was there from the start. This is all part of a larger strategic plan, and it just came into the light.

So while we scream to our parents and those in power about the growth of esports and its potential, China has cornered the market on every pillar necessary for control. Media and authority, data and insight, online streaming, and also the on-site event structure are all part of the growing web of Chinese control.

For better or worse, we are now in a new era.

Using Media To Create and Control Authority

The written word still rules the world. It has a permanence to it that video does not. As proof, I offer the entire industry built around search engine optimization. SEO is built solely upon the written word specifically keyword frequency and image tags. So when Advance bought a majority stake in TEO and Newzoo, the Chinese knew they had a winner.

The authority created by writing is less understood in this era of video clips and memes. Pictures capture our immediate attention but words anchor us to the past and keep us mindful. Combining the two means having the heart, mind, and soul of esports in the palm of their corporate hands.

Esports Data
Image courtesy gooruf.com

Esports Data Is The New Oil

Newzoo built its reputation on interpreting large amounts of data into pieces it then sold to corporations for large amounts of money. They do the grinding, grunt work so brands don’t have to spend resources doing so. Brands pay hefty sums of cash for others to do that tedious task. Chinese esports now has its finger on the pulse of the global gaming community.

Every new trend, every emerging platform, game, every rising online star, and every whisper is now fed directly into the money machine that is Chinese esports. Make no mistake, Tencent will leverage all this new insight and cash flow to its own benefit.

Influencing the Influencers

The Chinese government controls ALL media within its borders. Google, Apple, Microsoft, and every major gaming brand must have federal approval to do business in China. This applies to streaming and every streamer, as well.

How does that matter? Twitch and Mixer, and every other streaming platform are essentially the blockchain for esports. Streams are the decentralized places (distributed ledgers) where the data creators (fans and consumers of esports) meet often to exchange ideas, talk about current events, and come to a consensus of how to feel about something while validating each other.

Google doesn’t exist in China as it does everywhere else on the globe. The Chinese government controls everything with an iron fist. As an example, they will launch a social credit system by 2020 to rank and track all their citizens. This means if anyone wants into the largest consumer market on the globe, they must play the game under the rules set by the Chinese.

On-Site Awesome

The first major purpose-built esports arena was constructed in China back in February 2018. It was the initial offering in what is now a network of sites followed very quickly by the Allied Esports venue in Los Angeles as well as the one in Las Vegas inside the Luxor on the strip.

There is nothing like going to a live event for any genre. Music concerts, industry-specific conventions like E3 and TwitchCon, and EVO all have a big game feel to them like the Super Bowl with all the noise, lights, pageantry, and free stuff. Now the Chinese esports system has buildings in the heart of the NA esports world.

The new esports stadium in Arlington, TX is a true competitor. It’s placed in the perfect spot with good money behind it and a spending mentality. However, it’s the lone beacon in the dark sea dominated by this massive power that is Chinese esports.

Esports long climb
Image courtesy Photoshop Nation.

Down But Not Out

This is assuredly a large hill to climb. North America is adopting esports as a viable entertainment offering faster than everyone except China. Catching the Chinese means doing a few things:

  1. Make friends with Latin America and India. Reaching across the southern border and into South America to form partnerships will work. India has 1.35 billion people and a great technology infrastructure. Combine India and Latin America and they crush China in terms of population and potential. I’m sure China is already thinking here, but just know there are plenty of people not living in China with money and a huge FOMO problem that want on this ride really bad.
  2. Collegiate esports must thrive. NACE, Tespa, and AVGL must keep growing and winning. Our college sports system is unlike any other on the planet. As long as the NCAA does not screw with anything, college esports can work and allow us to compete on the global esports stage.
  3. The national event system must grow. We need a place where dreams can thrive. I’m willing to bet Sony is already thinking on this path when they pulled out of E3 2019. There’s a ton of money to be made and authority to build by owning a traveling annual expo and convention. This means local and regional events must spring up and remain viable, too. The fragmentation will be difficult to overcome at first, but there are lots of smart people out there willing to spend the money for others to make their dreams a reality.

Featured image courtesy of Newzoo

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You can also follow Bill on Twitter @LearningBill and LinkedIn.

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