Photo credit: UN Women/Ryan Brown
Although Alibaba is a familiar name to many worldwide, there is a section of the Esports community who are unfamiliar with the firm. This lack of context for the Esport world is a great reason to look deeper into what Alibaba represents, their origins and exactly what sort of influence they could have on the rapidly growing Esports scene.
After fifteen years of successful business, the Alibaba Group is one of, if not the most successful Chinese company in the world, but first let’s go back and see how it all started. The Alibaba Group was founded, in the now already ‘distant’ 1999, when a businessman called Jack Ma decided to start something revolutionary in China.
Jack Ma currently stands as the wealthiest Chinese citizen, taking eighteenth place on the prestigious Forbes rich list in 2014. However, as is often the case, his road to success was thorny and difficult, full of different obstacles. Ma has on several occasions expressed how his driving force in life came from his love for the English language, but even in academia he struggled initially, being denied University entry three times after failing to pass the entry exam. He finally managed to graduate and obtain a bachelor’s degree in 1988, a small victory through tenacity that would serve as a sign of things to come.
After graduating, Ma was trying to find a job in various different ways. This lead to him applying for thirty different places, receiving the same answer from all of them – no. Although he didn’t have a luck getting a job, Ma was lucky in another field, despite being unaware of it. The first time Ma heard about the Internet was back in 1994, but the first real contact with it was in 1995, the year he visited the United States. There is an anecdote from his life, which says while he was in the States, Ma searched on the internet for the word ‘beer’, to see what kind of information he would receive from a different parts of the world. To his big disappointment, no information was received from his country of origin. This encouraged him to take the next step in his career.
Ma’s first big project was through his first Internet company, 'China Yellow Pages', which he founded with the intention of building Internet sites for other Chinese companies. He invested $20,000 to start this project, which returned a whopping $80,000 profit over the next three years.
The next move in his career was the founding of Alibaba, the Chinese business-to-business marketplace site. He decided on this step after a closed meeting held in his apartment, together with seventeen co-workers. The decision was made and something big was born, although at the time they were unaware of what it might become. Today, Alibaba serves 79 million members from over 240 countries and regions, with Ma the founder of companies like Taobao, Alipay, Ali Mama and Lynx. eBay was interested in acquiring his sub-company, Taobao, but Ma decided to reject this offer and instead partnered with Yahoo’s co-founder, Jarry Yang, who invested $1 billion into the business.
Their ascension was complete in 2014, the year Alibaba received $25 billion in investments, putting them at the very top level of the tech industry. But let’s go back. Now we know who Jack Ma is and what Alibaba stands for the question is – is this even their first step into the Esports? The answer is no.
Through his Taobao company, Ma and Alibaba have been present in Esports for a few years through their sponsorship of the biggest Chinese Esports organization, LGD. LGD placed third at the biggest Esports event of 2015, The International 2015, where they definitely opened eyes and pushed back boundaries. Now, it seems the analysts in Jack Ma's team have come to the conclusion that Esports is a powerful marketing and communications channel, and worth further investment.
Today, Alibaba and Jack Ma have the opportunity to move Esports to a whole new level, investing huge capital, and it seems like they've firmly grasped the true potential of the sector. A few years back the top teams in Esports were competing for prize pools of maybe $5,000, which actually was a very big stake back then. Today, we are talking about the sums in millions of dollars. While this is definitely not the biggest prize pool we've seen for an Esports event, as The International 2015 boasted a whopping eighteen million dollars, it is still a huge step forward keeping in mind that this is an independent project, most likely not connected to Valve and Blizzard, without any crowd-funding.
What can we expect from this event?
Putting Dota2 aside, the rest of the games from this list (Counter-Strike, StarCraft 2 and Hearthstone) will definitely profit from a tournament of this scale. But, with a prize pool to match the biggest events in the sector, the question therefore is whether Alibaba can provide a similar level of organisation and quality to that which we've come to expect from the current Esports giants. It is hard to give a definitive answer, but it is very likely that they will face the same teething problems we've seen other groups experience. Whenever we've had a chance to see a new company dabble in the Esports waters, the challange has been in organizing, and any perceived shortfall can create a negative image. This, however, doesn’t mean that Alibaba’s investment doesn’t have its own weight, as it is proof the biggest players in the tech scene are stepping in and moving their focus towards Esports. It is hard to forecast where will this lead us, but it seems unlikely this is anything other than a step in the right direction.
To put it in perspective, the biggest event to date for Counter-Strike:Global Offensive boasted a $1,000,000 prize pool. Now, we are witnessing a new player in the game, Alibaba, offering 50% more than that, bringing new levels of outside investment to competitive CS:GO. The same goes for any other game except Dota2, but even the impact on Dota2 is worth mentioning. We can keep repeating how The International 2015 featured a mammoth prize pool, but having a $1,500,000 tournament run by someone other than Valve will mean a lot to a Dota2 community, and there is no doubt that this has huge implications for the progress of Esports as a whole.
Following the tournament’s announcement, the Esports community had mixed reactions to the news. One part of the community was posting negative comments, citing problems at WCA and Shanghai Dota2 Major, where things didn’t really go as planned. Others were quick to point out that while those weren’t the only Chinese events which had issues, that is not enough to create a stereotype. Could that sort of debacle be the sum total everything that the most populous country in the world has to offer to Esports? No, most definitely not.
First impressions and past experiences are always important, but in the Esports world, where everything moves at lightning pace, where we see changes overnight, and big improvements every day, anything is possible, especially for a nation moving as fast as modern China. Firms from that region may have had a rocky start in the world of international Esports, but Alibaba and Ma have proven time and again that they are not just innovators, but also fast learners, and there is no reason to think they won't have learned the lessons of previous events on their shores. Bringing their vast experience and knowledge of business into a new area, Alibaba Group surely have a chance to set some new standards in Chinese Esports, as well as change the perception of China in the eyes of the wider Esports world.
The battle of the giants?
Two years ago the news of Amazon buying the popular streaming platform, Twitch, exploded worldwide. The biggest newspapers reported on this, stating that the serious money was now being invested in something related to computer games, with the numbers revealed when Amazon acquired Twitch serving as a simple indicator of how this video platform is playing a big role in the gaming community. Back in July 2014, Twitch had 55 million unique users and more than 15 billion minutes of content produced by the users. Even to the layman, those numbers are self-explanatory as an indication of both the strength and potential of the sector
Photo taken from newzoo.com
Now, with 43% projected growth in eSports for 2016 set to take the value of the sector close to a $500m, it is clear other multi-nationals are starting to catch on. Aside from the not-insignificant numbers, the most important part of Esports is the gaming community, that captive audience all partners want to buy the attention of. When the news broke, there was a ripple of comments from both directions, where one part was holding the guard and defending the fact that this is a good move which will potentially bring more big players into this sphere, while others were sceptical about it, afraid of possible change and the potential ruination of what was built by the community itself.
With hindsight, we can look back and say with some confidence that Amazon’s move was healthy for Esports, partly as it may have prompted other huge names such as Yahoo, Disney, etc. into joining us. As one of the more recent additions, we can add the Alibaba Group to this list as well. Now we are facing the new situation of having two big E-commerce giants investing in Esports, which surely can’t cause harm. On the contrary, it should only bring progress as they will be able to strive to compete against each other via bigger investments, which will in turn lead to new names coming to our field as well.
Conclusion
Today, people in some countries can brag about being able to watch their favourite teams and players participating in the biggest tournaments on national TV. If we were having this discussion a few years ago, everyone would say that we were crazy to think that way, but in the current market it seems like there is no such thing as a crazy idea. Esports is like a mini-Universe or the old wild west to some - a vast, unexplored territory which we can strive to explore and understand, but no final judgement can be made. Moreover, while we can try to shape it the way it fits us best, it has shown that it will evolve independently and we must keep up as progress comes thick and fast.
The following question is raised then: 'Why should we put effort into helping the growth of Esports if we can’t have a direct impact on it?' Simply put, without us, the audience, Esports would be an empty sphere, with none of the potential we see today. The community is the backbone and foundation of it, that the big companies investing big money want to market to and leverage. Both of them must be synergetic, otherwise the whole system could die.
Amazon, Yahoo, Disney, Alibaba, what is the next big company which we can expect to step in and invest in Esports? Is it even possible to predict? Probably not, so instead, let’s put this all aside, and actually enjoy the benefits our favourite games have given us, and earned. Every headline about a big company stepping into our small world, ready to invest money, is priceless, and we definitely have to learn to enjoy it. In the end, we are the ones living our own dreams through Esports, but the big companies are the ones that will allow us to continue doing it, funding the growth and nurturing the scene built by gamers, for gamers.
Be sure to check GosuGamers next week for part 2 of this feature, when we'll have an exclusive interview with AliSports Esports General Manager, Mr. Ivan Wong.
All quotes were taken from BrainyQuote.
