Tencent-Backed Dream11 Wins Title Sponsorship For IPL: Global PC Games Market Leader Tencent Makes Investments As Part Of Its Growth Strategy

20 Aug, 2020

Indian fantasy sports platform Dream11 recently announced winning title sponsorship rights to cricket’s biggest title deal, the Indian Premier League (IPL). This announcement came after the Board of Control for Cricket in India (BCCI) and Chinese phone maker Vivo – the previous title sponsor - agreed to pause their five-year deal for this year, amidst anti-China sentiments in India. Interestingly enough, Dream11, which replaces Vivo, itself is backed by Tencent Holdings of China. Tencent Holdings is a leading player in the global PC games market, which includes genre-based PC games such as shooter, action, sport games, role-playing, adventure, racing, fighting, and strategy.

Vivo was previously paying ?440 crore ($58.8 million) per year, which is nearly double of what Dream11 will be paying this year as the title sponsor. Dream11 was the highest bidder, outbidding companies such as Unacademy and Byju’s. In case of any tournament delays, Dream11 will continue to remain the sponsor until 2020 ends. The 13th edition of IPL will be held in the United Arab Emirates from 19th September. Tencent is among the four other investors in Dream11, namely Kalaari Capital, Think Investments, Multiples Equity, and Steadview.

Tencent is an investment holding company that provides Internet, mobile value-added services (VAS) and advertising services, in China and internationally. It was founded in 1998 and is headquartered in Shenzhen, China. Tencent’s growth strategy aims at increasing its share in the PC games market through strategic acquisitions and investments. For instance, in 2018, the company acquired a majority stake in Grinding Gear Games (GGG), a New Zealand-based video game developer. GGG was founded in 2006 and developed Path of Exile, a free-to-play action role-playing video game for PC and consoles in 2013. Similarly, in 2017, the company acquired 1.5% stake in Bluehole Studio, a developer of an online battle royale game PlayerUnknown’s Battlegrounds (PUBG), for KRW 70 billion ($0.06 billion). In addition, in 2016, the company acquired a 5% stake in Paradox Interactive, a video game publisher based in Sweden, for $21 million.

According to Global Market Model estimates, the global PC games market size reached a value of nearly $28,733.3 million in 2019, and is expected to grow to $29,661.5 million in 2030 at a compound annual growth rate of 0.32%. Going forward, increasing use of internet and facilitation of cross-platform publishing and play will drive the PC gaming market size. Companies in the PC games market are launching games which are cross-platform publishing and play, making gaming more flexible for users. Cross-platform publishing gives players the ability to play the same video games on different platforms through progress retention. Similarly, cross-platform play is a characteristic of a video game which enables gamers to use different gaming platforms such as console, mobile and PC to play with each other simultaneously. In many cases, these cross-platform games are restricted within the respective publisher’s platforms. For instance, some games in the RPGs series Monster Hunter are cross-platform games between Nintendo’s platforms such as the 3DS, Wii U, and the Switch.

The increase in cross-platform gaming can be attributed to the development of scripting languages, software libraries and game engines, allowing PC games companies’ to efficiently use platform-specific details of the users. For instance, Microsoft is expanding Xbox Live’s cross-platforms from 400 million to over 2 billion, to include iOS, Android and Switch in 2019. Similarly, Hero Siege – an RPG published by Panic Art Studios which was available for cross-platform play between PC, Mac, mobile and Switch - was extended to include PS4 in 2018. PC based game players are seen to have a competitive advantage over players using a console or a mobile, due to additional features in game settings that improve visibility. These additional features in PC based games are expected to drive the demand for PC based video games in the forecast period.