Mobile Gaming industry keeps bombing the markets and investors while the Chinese gamers invest billions of dollars into their virtual properties and loving them. Apart from an unstoppable YoY growth in revenue for big producers like Tencent and Netease, watching game streaming has become one of the Chinese netizens’ favorite ways to spend their leisure moments.
The tremendous traffic brings profits to streaming platforms such as Tencent-backed Huya and Douyu. Panda TV, launched in 2015, ranked No.3 in Chinese, was founded by the ‘richest son of China’, once announced its IPO plan in the first quarter 2019, now going to an unexpected end.
The ‘Crazy Rich Asian’ in Reality
Wang Sicong, one of China’s biggest investors in the fast-growing online entertainment business, is the owner of streaming platform Panda TV, entertainment company Banana Culture and Esports club Invictus Gaming.
Regarded as “China’s richest son” and “China’s most eligible bachelor”, Wang is also known for courting controversy with his playboy lifestyle and lavish displays of wealth — as the son of billionaire Wang Jianlin, owner of the Dalian Wanda Group.
Wanda is the world’s biggest private property developer and the owner of world’s largest cinema chain—-Wanda Cinemas and the Hoyts Group. The Beijing-based conglomerate also owns AMC Theatres and even Hollywood’s Legendary Entertainment.
After graduated from UK’s Winchester College and University College London, Wang Sicong returned to China and started streaming himself playing video games. He was later reportedly given 500 million yuan (AUD$105.6 million) by his father, with which he founded private equity firm Prometheus Capital.
While Wang is considered one of the most important figures in China’s nascent esports scene, he also openly embraces his playboy celebrity persona in the style of Tony Stark (The Marvel superhero Iron-man), by throwing extremely lavish parties and for posting pictures which show off his wealth.
He once posted US$400,000 worth of receipts from a karaoke bar on social media. There are also instances where he posted pictures of his dog wearing two gold Apple Watches (worth more than US$37,000) and being surrounded by eight iPhone 7 boxes. ——edited from Abacusnews.com.
Despite of being backed by such a wealthy investor, Panda TV went into crisis after crises. A source commented on the corporate governance style of Panda’s through social media,saying from the management to the PR specialist, employees are ‘relaxing’ and some of the streamers only works for 5 hours per day.
Wang’s Panda TV Closing Down
In early March 2019, Panda TV announced it will end its service after the company failed to raise fresh funds to keep operations going in a cash-intensive business.
The Shanghai-based game streaming site said in a posting on Weibo that it has started a “wandering plan,” asking “engineers to gradually cut off the connection with the mother star,” an apparent reference to China’s recent blockbuster sci-fi movie The Wandering Earth, which tells the story of Chinese people saving humanity by moving the planet to another solar system.
A picture attached to the Weibo statement shows the back of a waving panda, with a text bubble saying “Bye.”
The official announcement comes after that Panda TV would file for bankruptcy and dismiss its workforce.
Panda TV’s chief operating officer, Andy Zhang Juyuan, on 7 March sent a message to employees in a WeChat group, saying that the company had been forced to “end” after it failed to inject new money into the business over the past two years.
A former Panda TV employee, who declined to be identified after losing her job, confirmed Zhang’s message. Zhang said that high bandwidth costs and rising salaries for streamers were major reasons behind the cash flow crisis – which mounted despite the platform grossing tens of millions RMB every day.
Panda TV raised one billion yuan (AUD$212 million) in its latest financing round in May 2017, led by Shanghai-listed Industrial Securities. In October last year, COO Zhang told media that the company was even considering an initial public offering as early as the first quarter of 2019.
By the end of last year, Panda TV still ranked as China’s No. 3 game streaming network in terms of monthly active users, trailing Tencent-backed Huya and Douyu, according to data firm Jiguang. But in recent months, many high-profile streamers on Panda TV have switched jobs to join the big two.
According to several media reports, Douyu is planning an IPO in the US following Huya, which went public in May last year. Panda TV shot to fame largely thanks to its celebrity founder and CEO Wang Sicong; last year, Wang Sicong’s debut as an e-sports player on Panda TV attracted over 50 million simultaneous viewers.
Wang also owns Chinese e-sports team Invictus Gaming, which in November won the 2018 League of Legends World Championship as well as the hearts of Chinese gamers. IG players are among the most popular streamers on Panda TV.
Wang is the largest shareholder in Panda TV with a 40 per cent stake, according to company registration information. Besides, Beijing-based software company Qihoo 360 is ranked second with a 19 per cent stake.
China is home to the world’s biggest live streaming user base, with industry revenue expected to grow from 2017’s US$5.5 billion to US$16.5 billion by 2022, according to figures cited by Huya’s filing to the New York Stock Exchange.
Like Panda TV, some live streaming platforms still struggle to turn a profit though, as they derive most of their revenue from the sale of virtual gifts to viewers, who buy them to tip their favourite streamers. The cutthroat competition has in recent years edged out smaller players, such as Shanghai-based Quanmin TV, from the market.
The last few hours on Panda TV was all about saying goodbye. “Last night when I laid on the bed, I couldn’t help but cry,” said one League of Legends streamer with 240,000 followers.——Edited from South China Morning Post
Although the fall of Panda TV is at hand, the journey of Wang continues. He will still show off his wealth through social media, and buy his dog some Iphones. For we entrepreneur and professional managers, Panda TV can be a classic case study, reminding us to stay eager, stay innovative in all times. Nothing lasts long otherwise, even you have someone like Wang Sicong on board.
Edited by Joreal Qian