Korea’s top esports league faces worsening conditions in China
League of Legends Champions Korea (LCK), Korea’s top-tier esports league, is expected to grapple with publicity and financial challenges despite its success in the Asian Games and World Championship last year, according to industry officials, Thursday.
For South Korea, 2023 marked a big win for its esports industry, especially for Riot Games’ League of Legends (LoL), one of the world’s biggest esports titles. Korea bagged two of the seven gold medals for esports, including one for LoL, at the Asian Games in the Chinese city of Hangzhou.
T1, the LCK team backed by SK Telecom, beat China’s Weibo Gaming in November to win the annual championship of the LoL world tournament.
While the win was regarded as strong proof of Korea’s status as a global esports powerhouse, LCK league seems to be getting off on the wrong foot in 2024.
As LCK kicked off its spring season last week, Huya, a video game streaming platform in China backed by Tencent Holdings, which also owns Riot Games, has stopped the official Chinese-language broadcasts of the new season. That marked the first time that LCK broadcasts have been halted in mainland China since 2018, when Huya became an exclusive streaming partner with Riot Games for the regional tournament.
Riot Games Korea told local media that the suspension was due to the lack of a broadcast rights holder in the country. While the company did not give any further explanation, some industry insiders said the issue is related to the recent controversy around Generation Gaming (Gen.G), one of the top esports clubs in Korea.
In December, Gen.G caused online fury in China after referring to Taiwan as a country in a Facebook post. It made the matter worse after issuing an apology that “reaffirmed its unwavering commitment to respecting and upholding China’s sovereignty and territorial integrity,” and then retracted it and said it remained neutral on political views, which led to widespread criticism among both Chinese and Korean fans.
Ke “957” Changyu, a professional gamer-turned-commentator for LPL, the LoL pro league in China, said earlier this month on his personal streaming channel that the broadcasting halt was due to the recent issues with Gen.G.
A source working in China’s esports industry also confirmed with The Korea Times on condition of anonymity that Gen.G was a major reason for the suspension.
Both Riot Games and Huya did not respond to requests for comment on the broadcasting issue.
South Korea, with strong government support for esports-related policies and infrastructure, is at a critical point for the global esports industry. The country has established an extensive talent pool across the world’s major esports titles, including Lee “Faker” Sang-hyeok, the legendary player for League of Legends. The professional teams are backed by some of the largest business conglomerates in Korea, including SK Telecom, KT and Samsung.
The move came as a surprise for many Chinese esports fans, who had taken to social media to express their disappointment following the incident.
Wang Ruiwen, a 22-year-old LCK fan in Shanghai, said she was “super sad” when she opened the Huya channel and found it was just replaying previous matches last year instead of streaming the new season. Instead, she has to turn to the English-language streaming channel for LCK on Youtube, which is not accessible under China’s Great Firewall unless through a VPN service.
“It’s a pity that the move by a sole team had screwed the access of the entire Chinese fan group to the tournament,” said Wang.
The suspension would undoubtedly deal a blow to LCK’s profitability through the loss of licensing fee revenue, as the regional league has already landed itself in hot water over its inability to secure revenue growth.
On Jan. 17, the opening day of the LCK Spring season, a group of teams affiliated with the league released a joint statement to voice their concerns of financial sustainability under Riot Games Korea.
“…the league’s viewership, performance and fandom have continued to grow. However, despite this continued growth, the LCK League Corporation has not been able to grow the league’s business value over the past three years,” according to the statement, which was originally written in Korean.
The financial dilemma is a headache not just for LCK, but also the whole global esports industry. “The profitability of esports events is often limited to sponsorships by game studios and hardware makers, and has a weak relation to companies with other product categories,” said Zhang Shule, an analyst with CBJ Think Tank. “Possibilities outside the competitions have also been barely explored.”
Amid the difficulties, Dylan Jadeja, CEO of Riot Games, announced Monday that the U.S.-based developer is going to eliminate 11 percent of its workforce, or about 530 jobs, as the company trims less-profitable businesses and focuses on core titles.
“We’re changing some of the bets we’ve made and shifting how we work across the company to create focus and move us toward a more sustainable future,” Jadeja said in a letter published on the company’s website. It was yet unclear how the Korean unit will be affected, but for sure, the new battle is just beginning.
It’s a pity that the move by a sole team
had screwed the access of the entire Chinese fan group to the tournament.