Gaining Prominance

By Carl Friedmann
We continue our look at the emerging esports vertical’s popularity across Asia, focusing on the Hong Kong market with Bird & Bird sport, media and tech counsel Alex Norman

Hong Kong has always inhabited a unique position in the world of business and commerce, and its positioning in the esports ecosystem is no different.

On the one hand, it can be seen as an access point to (or, indeed, part of) the huge market in the People’s Republic of China (PRC) for gaming and esports. On the other, it’s seen as part of the emergent South East Asian (SEA) ecosystem, where publishers, event organisers and teams jostle for consumers and marketing dollars across a huge geographic expanse. The truth is, inevitably, somewhere between the two. Many gamers in Hong Kong have a strong affinity to the professional and well-established esports leagues in the PRC, but are also increasingly exposed to the more nascent South-East Asian equivalents. In short, Hong Kong has a foot in both camps.

It is worth pausing for a moment to understand a little more about the differences between the PRC and SEA esports scenes. SEA is, of course, not one homogenous market. The demographics of gamers and, perhaps most importantly, the popularity of different games and hardware across SEA varies wildly. While some countries lean towards mobile first titles such as Mobile Legends: Bang Bang, others skew towards the PC-based Dota 2. Accordingly, developing pan-regional competitions like the professional Pacific Championship Series (PCS) organised by Riot Games for its flagship League of Legends title is still the exception rather than the rule in SEA.

By contrast, the PRC has seen an explosion of well-financed professional leagues and competitions, helped inno small measure by the fact that organisations are dealing with a single huge and potentially very lucrative jurisdiction. While SEA is quickly catching up with the PRC in terms of levels of professionalisation in esports, there is currently a vast chasm between the two in terms of some of the key financial, and marketing and engagement metrics.

 

So what does this mean for the Hong Kong esports ecosystem?

From what we have seen, it appears that in terms of viewership, gamers in Hong Kong are still drawn towards the big professional leagues in the PRC, and this is still seen as the gold standard for professional gaming for a number of titles, not least League of Legends. That said, there aren’t currently any Hong Kong-based teams competing in the major esports leagues in the PRC. Instead, Hong Kong teams are typically competing in SEA-focused tournaments and competitions, such as the PCS mentioned above. This is an interesting dynamic, meaning the challenge for Hong Kong-based teams competing in these SEA events will be to engage Hong Kong viewers with Hong Kong teams, even if they aren’t currently competing in the most watched events (which typically emanate from the PRC).

 

Esports regulation in Hong Kong

Hong Kong has historically operated a reasonably laissez-faire attitude to regulating esports, and there aren’t many signs of this changing in the near future. In contrast to other jurisdictions, which are looking to adopt a more structured approach to the regulation of esports, Hong Kong needs to assess more general laws and regulations to understand if and how they apply to esports.

That said, the Hong Kong Government has shown a keen interest in promoting gaming and esports, including through hosting international events like the Hong Kong esports and music festival, and the more business focused Digital Entertainment Leadership Forum. Accordingly, Hong Kong authorities may consider a more comprehensive and specific set of regulations for esports in the longer term, and it’s likely that developments in other jurisdictions in this regard will be followed keenly as Hong Kong attempts to establish itself as a leader in the esports industry in the region.

Given there’s no single set of laws and regulations for esports, this can be confusing for those who wish to stage esports events in Hong Kong. For example, event organisers will need to carefully consider if they require an exemption from the relevant authority in relation to the licensing requirements under the Amusement Game Centres Ordinance (Cap 435). Similarly, game publishers who organise events or promotions in Hong Kong will also need to consider if any elements of what they are promoting contravene the provisions of the Gambling Ordinance (Cap 148), which provides that gambling and lotteries are generally illegal in Hong Kong (both online and offline), except in very specific circumstances. In addition, organisations that undertake prize promotions in Hong Kong may need to get a licence to do so.

 

Recent controversies

One unique trait of the gaming audience is that it has typically been quick and unafraid to voice opinions on social and cultural issues, which has forced esports event organisers to confront some complex and controversial issues. Following the recent political upheavals in Hong Kong, this was demonstrated as a player from Hong Kong of the popular game Hearthstone was sanctioned by the publisher of the game Blizzard for remarks made during a live stream. As well as creating a huge public controversy, this episode highlighted the sensitive PR situations that event organisers and publishers can find themselves in. In a Hong Kong legal context, this issue is now especially important since The Law of the People’s Republic of China on Safeguarding National Security in the Hong Kong Special Administrative Region was brought into force in 2020.

As we look forward, we expect esports to grow in importance in Hong Kong, as it is likely to continue to do all over the world. While 2020 has undoubtedly been a catalyst for the industry and has catapulted it into the public consciousness, there is still some way to go for esports to be considered truly mainstream. Hong Kong stands, as it always has, in a unique position to exploit this growing trend, and to help develop the players, teams, infrastructure and ecosystem for the future. We certainly look forward to being part of it.

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