Analysis of Investment Opportunities and Risks in the Esports Industry

Based on the latest market data and research materials, I provide a systematic analysis of the investment opportunities and risks in the esports industry.

---

The esports industry is experiencing an unprecedented period of rapid development. According to iResearch Consulting Group’s “2025 China Esports Industry Research Report”, the scale of China’s esports market reached approximately

in 2024, with a year-on-year growth of 5.5%, and the user scale stabilized at [1]. The global esports market scale reached in 2024, and is projected to grow to by 2032, with a compound annual growth rate (CAGR) of as high as [2].

Notably, mobile esports has become the core driver of industry growth. Take Mobile Legends: Bang Bang (the game you mentioned) as an example: as of the end of 2024, its monthly active users exceeded

, with total registered accounts surpassing ; its tournaments became the world’s top-viewed mobile esports event with of viewership in 2024, and it is also the first esports league system with total viewership hours exceeding 1 billion[3].

The “2025 China Game Industry Report” shows that the actual sales revenue of China’s domestic game market reached

, with a year-on-year growth of 7.68%, and the user scale reached , both hitting record highs[4]. Among them, the revenue of the esports game market exceeded , with a year-on-year growth of , becoming one of the fastest-growing segments[4].

---

The esports industry is receiving comprehensive policy support from central to local governments. In August 2024, the State Council issued the “Opinions on Promoting High-Quality Development of Service Consumption”, which clearly supports “consumption of animation, games, esports and their peripheral derivatives”[5]. In March 2025, the General Office of the CPC Central Committee and the General Office of the State Council issued the “Special Action Plan for Boosting Consumption”, encouraging consumption of animation, games, and esports, and promoting the integration of excellent traditional Chinese culture into digital product design[5].

At the local government level, Guangdong Province will build the “dual-core esports hubs” of Guangzhou and Shenzhen; Beijing issued the “Interim Support Measures for Promoting the High-Quality Development of Beijing’s Gaming and Esports Industry”, providing financial rewards for game R&D enterprises and major esports events; Chengdu released new policies, where gaming and esports enterprises can receive up to

[6].

Segmented Sector	Investment Highlights	2025 Market Scale
Game R&D	Under the trend of high-quality products, R&D capability becomes core competitiveness	RMB 257 billion (mobile games)
Esports Tournaments	International events like M7 drive viewership economy	RMB 170 billion (esports games)
Live Streaming Platforms	Dual growth in advertising revenue and user payments	Sustained high-speed growth
Hardware Devices	Strong demand for esports mice, keyboards, and monitors	Obvious high-endization trend
Peripheral Derivatives	Expansion of IP co-branding and virtual goods market	Broad incremental space

As one of the world’s largest game companies, Tencent has an in-depth layout in the esports sector. The latest data shows that the company’s market value reaches

, with a price-to-earnings ratio (P/E) of 22.20 times, a return on equity (ROE) of , and a net profit margin of [7]. The company’s Q3 2025 performance exceeded expectations, with revenue reaching USD 23.031 billion, a year-on-year growth of 11.63%[7]. Tencent’s esports ecosystem covers the entire industrial chain, including tournament operation, game R&D, and live streaming platforms.

The company’s stock price has performed strongly, with a

in the past year and a in the past three years[8]. The company is actively laying out the integration of AI and games, introducing VR holographic viewing and XR real-time sandbox technology into its gaming business, and exploring new business models for esports[9]. Financial data shows that the company’s net profit margin reaches , operating profit margin is , and its debt risk is low[8].

As the exclusive operator of DOTA2 and CS:GO in mainland China, the company has built a multi-tier tournament system covering mass tournaments, professional leagues, and international events[9]. The DOTA2 International 2026 (TI2026) will return to Shanghai in March 2026, which is expected to drive peripheral consumption and derivative revenue[9].

Artificial intelligence is gradually transitioning from the conceptual stage to practical application. Huaxin Securities’ research report points out that AI technology can optimize game R&D processes, improve content generation efficiency, and bring more immersive experiences to players[9]. The cutting-edge attempts of companies like Giant Network in integrating AI and games may cause short-term stock price fluctuations, but are expected to reshape the industry pattern in the long run[10].

---

Although the overall policy environment is favorable, regulatory uncertainty still exists. In 2024, Tencent Games disclosed that the proportion of minors’ game playtime dropped to

, hitting a new annual low[6]. The industry is moving from pure technical regulation to “constructive co-governance”, but changes in regulatory policies may still affect business operations. In addition, game version number approval, intellectual property protection, and content compliance are all policy risk points that require continuous attention[6].

Competition in the gaming industry is becoming increasingly fierce, with concentration among leading players rising. Small and medium-sized manufacturers face pressures such as underperformance of newly launched products and declining revenue of leading products[4]. As pointed out in the “2025 China Game Industry Report”, most new products launched in 2025 failed to meet expectations, and the revenue of mobile anime games decreased by

year-on-year[4].

Physical games are significantly affected by international trade policies. Trump’s new tariff policy imposes an additional 10% tariff on goods produced in China, which may increase the production costs of game consoles, optical discs, etc.[6]. During economic downturns, consumer spending on entertainment may contract.

Rapid technological iteration requires enterprises to continuously invest in R&D. Changes such as the “Apple Tax” (App Store commission), third-party payment policies, and the rapid evolution of AI technology may alter the industry’s competitive landscape[6]. Enterprises need to continuously adapt to technological changes, otherwise they may be eliminated by the market.

Guangzhou Maichi Network Technology was sued by The Pokémon Company for copyright infringement of its mobile game Pokémon: Replicate, and was ordered to pay

in damages in the first instance[6]. Such cases remind manufacturers to attach great importance to intellectual property protection during R&D and distribution, and avoid borrowing design elements from others.

---

Investment Type	Recommended Targets	Strategy Logic
Core Allocation	Tencent Holdings (0700.HK)	Full industrial chain layout, stable performance, reasonable valuation
Growth Allocation	Giant Network (002558.SZ)	AI + gaming layout, high performance growth, high elasticity
Value Allocation	Perfect World (002624.SZ)	Esports tournament operation, exclusive operator of DOTA2 in China
Thematic Allocation	37 Interactive Entertainment, Kaiying Network	Rich product pipeline, benefits from normalized version number issuance

1. Monitor policy trends
   : Normalized version number issuance and local government support policies are important catalysts
2. Emphasize R&D capabilities
   : Under the trend of high-quality products, companies with independent R&D capabilities have stronger long-term competitive advantages
3. Layout overseas tracks
   : Game overseas expansion and esports globalization are key incremental directions
4. Beware of valuation risks
   : Some companies have seen large short-term gains; need to focus on valuation rationality
5. Diversify investments
   : The esports industrial chain is long; it is recommended to diversify allocation across segments such as game R&D, tournament operation, and live streaming platforms

---

The chart above shows:

1. Market scale growth
   : China’s esports market scale grew from RMB 110 billion in 2019 to approximately RMB 202 billion in 2025, showing a steady upward trend
2. Market structure
   : Mobile games account for the largest share, and the esports game market is expanding rapidly
3. Investment opportunities
   : Segments such as game R&D, tournament operation, and hardware devices have high investment attractiveness
4. Risk factors
   : Regulatory policies and intensified competition are major risk points that require continuous attention

---

As an important component of the digital economy, the esports industry is in a critical period of rapid growth and value revaluation. Driven by policy support, technological advancement, and consumption upgrading, the industry is expected to maintain high growth. However, investors also need to pay attention to risks such as changes in regulatory policies, intensified market competition, and macroeconomic fluctuations.

: It is recommended that investors focus on leading companies with R&D capabilities and full industrial chain layout, while appropriately allocating to growth-oriented enterprises with first-mover advantages in emerging fields such as AI, overseas expansion, and esports. Given the long-term growth space of the esports industry, the current stage is still a good time for layout, but position management and risk control should be emphasized.

---

[1] iResearch Consulting Group, “2025 China Esports Industry Research Report” (https://www.scribd.com/document/886620476)

[2] Fortune Business Insights, “Global Esports Market Report” (https://www.fortunebusinessinsights.com/zh/esports-market-106820)

[3] IT Home, “Mobile Legends: Bang Bang M7 World Championship Kicks Off” (https://www.ithome.com/0/912/162.htm)

[4] China Audio-Video and Digital Publishing Association, “2025 China Game Industry Report” (https://finance.sina.com.cn/tech/digi/2025-12-19/doc-inhciykc7504280.shtml)

[5] Securities Times, “Valuation Repair + Performance Improvement: Good Times Are Back for the Gaming Sector” (https://www.stcn.com/article/detail/2347815.html)

[6] GameNews, “Gaming Policy News” (https://www.gamenewstc.com/nr.jsp)

[7] Jinling API - Tencent Holdings Company Profile Data

[8] Jinling API - Giant Network Company Profile Data

[9] Huaxin Securities, “Perfect World Company Dynamic Research Report” (https://finance.sina.com.cn/roll/2026-01-03/doc-inhfafph7973054.shtml)

[10] Futu News, “Year-End Review | 2025 Gaming Stock Investment Guide” (https://news.futunn.com/hk/post/66811869)