Chinese technology behemoth Tencent is proceeding with a previously hinted at merger that would create a games and esports streaming giant. Tencent already owns the developer (Riot Games) behind the biggest esports franchise in the world, League of Legends, and next year, it looks like it’ll control the biggest streaming platform as well. Tencent is the biggest shareholder in Huya and owns about a third of DouYu – the company is mediating a stock-for-stock merger deal that would combine these two streaming platforms and yield Tencent a 67.5% controlling stake.

The combined entity would dominate the Chinese streaming landscape with about 80% market share. This would effectively give Tencent the power to be a “gatekeeper” of any and all games or esports content that’s streamed in the country – and considering that China is home to about 1.4 billion people, the potential audience is certainly vast as esports continues to gain traction as an industry. To put the numbers in perspective, Twitch, which is the leading esports streaming platform in the West, has around 17 million daily average visitors, and is reportedly on track to reach around 40 million active viewers in the US some time next year. Huya, meanwhile already has 168.5 million monthly active users (according to its Q2 2020 fiscal report) and DouYu has about 165 million users.

A Huya-DouYu platform will dwarf Twitch when it comes purely to viewership, and that’s going to make it an extremely attractive platform for both endemic and non-endemic brands. It also provides content creators with the potential for larger audiences and the chance to grow their personal brands on a larger scale. Additionally, Tencent, which operates the START cloud gaming service, could enjoy significant synergies by integrating cloud gaming with live streaming on the platform (not unlike what Amazon seems poised to do with newly unveiled Luna and its Twitch platform).

China’s influence on the esports market cannot be overstated. Not only is the 2020 League of Legends World Championship taking place throughout October in Shanghai, but the country is continually at or near the top when it comes to game and esports streaming engagement, according to Interpret’s NMM: Global Profiles^®. About 42% of the country streams either esports or game-related videos, far ahead of the US and nearby neighbor South Korea.