中国互联网行业：虎牙和斗鱼依然主宰着游戏直播

1、Global Research14 April 2020China Internet SectorUBS Evidence Lab inside: Huya and Douyu still dominate hardcore game live streamingMany platforms stream games but Huya and Douyu offer differentiationWe believe investors are overly concerned about new entrants into Chinas game live streaming industr

2、y. UBS Evidence Lab data suggests competitive pressure on Huya and Douyu may not be as significant as feared, as users who go to short video platforms for game streaming have a different profile from Huya/Douyu users. In the survey, 26% of respondents not using Kuaishou for game live streaming claim

3、ed to prefer the more professional content on Huya/Douyu, while 70% of those who went to Kuaishou for game streaming chose it for its diversified content (Figures 4 and 5). Only 8% used Kuaishou for game live streaming, and only 8% of those said the use of Kuaishou impacted their time/ money spent o

4、n Huya/ Douyu (Figures 2 and 6). With Tencents proposal to take control of Huya, we think Huya could improve user engagement and monetisation, and further differentiate itself as a game live streaming-focused platform.Platforms with more professional broadcasters dominate game live streamingIt is no

5、t easy to excel at a game and be entertaining at the same time. Top reasons cited for not using Kuaishou for game streaming were related to broadcaster types. While games are available on many streaming platforms, it is harder to replicate the community and the type of broadcasters of more niche pla

6、tforms. Huya and Douyus talent agency networks create an entry barrier (Figures 16-19). We believe other platforms could enlarge their game streaming viewer bases, especially casual users; 18% of respondents who used Kuaishou for game live streaming said they had not used other platforms before and

7、started watching game live streaming on Kuaishou.Several platforms should divide up the game live streaming marketWe believe the industry can accommodate multiple platforms with different sources of traffic and community. We expect Huya to continue to focus on hardcore content, while short video pla

8、tforms are likely to cater to casual viewers. Bilibili will have some overlap with the rest, but also target different game genres. We think Tencent could help drive industry stabilisation, as an investor in Kuaishou, Bilibili, Douyu and Huya.Huya: monetisation and cost-savings upsideWe think Huya c

9、ould leverage Tencents resources to improve user engagement and monetisation (link). We expect 1-15% revenue upside in 2022 from game distribution. A falling broadcaster revenue share could be an even bigger earnings driver. We like Huya as we think the market is overly concerned about competition a

10、nd regulatory headwinds but overlooks revenue and cost-savings upside with Tencent taking control.Internet ServicesChinaEquitiesAngela Xu, CFAAnalyst S1460519060001 HYPERLINK mailto:angela.xu angela.xu+86-213-866 8813Jerry Liu Analyst HYPERLINK mailto:jerry.liu jerry.liu+852-2971 7493Zhijing LiuAnal

11、yst S1460515120001 HYPERLINK mailto:zhijing.liu zhijing.liu+86-21-3866 8847Curtis Li Analyst HYPERLINK mailto:curtis.li curtis.li+852-2971 5526 HYPERLINK /investmentresearch /investmentresearchThis report has been prepared by UBS Securities Asia Limited. ANALYST CERTIFICATION AND REQUIRED DISCLOSURE

12、S BEGIN ON PAGE 20. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor i

13、n making their investment decision.China Internet SectorInnovations to help industry reaccelerateUBS Research THESIS MAP a guide to our thinking and whats where in this report HYPERLINK l _bookmark1 OUR THESIS IN PICTURESMOST FAVOUREDLEAST FAVOUREDHuyaNAPIVOTAL QUESTIONSQ: Can leading short video pl

14、atforms disrupt game live streaming?We do not think so. We think the user base and user behaviour on short video platforms like Kuaishou are still largely different from professional game live streaming platforms like Huya and Douyu. UBS Evidence Labs survey data suggests that most respondents used

15、Huya/Douyu for professional game live streaming, while some users started to use Kuaishou for game live streaming because of its diversified content. Most of them claimed limited impact on their time/money spent on Huya and Douyu.moreUBS VIEWOver the long term, we remain positive on the industry and

16、 major platforms, expecting game live streaming industry growth to be fast enough to accommodate growth of multiple platforms. We believe competition is increasing with the entrance of newcomers, but UBS Evidence Lab PulseCheck data suggests that the competitive pressure may not be as significant as

17、 feared. Among major operators, we believe content/format differentiation will be the focus. We expect Huya to continue to focus on hardcore and more professional game live streaming content and users, while short video platforms would mainly cater to lighter users with more diversified content dema

18、nd. With Tencent announcing that it will take control of Huya, we would expect a more stabilised industry landscape, particularly if there were further market consolidation around Huya and Douyu.EVIDENCEIn the PulseCheck survey, 26% of respondents not using Kuaishou for game live streaming claimed t

19、o prefer the more professional contents on Huya/Douyu; 20% said they liked the broadcasters on the two platforms. Over 70% of respondents who watched game streaming on Kuaishou claimed that they went to Kuaishou for game streaming due to diversified content. Among the respondents, 42% of respondents

20、 who watched game live streaming on Kuaishou claimed no impact on their user behaviour on other platforms. Only 5%/3% of respondents who used Kuaishou for game live streaming spent less time and money on Huya/Douyu. Among the respondents who watched game live streaming on Kuaishou, 18% claimed they

21、had not used any platforms to watch game live streaming before and had only just started watching on Kuaishou. Xiaohulu data shows Huya and Douyu have been leading in numbers of live broadcasters of mobile and PC games, respectively. Huya has built the largest talent agency network.WHATS PRICED IN?W

22、e believe the market has been increasingly concerned about the competitive pressure in Chinas game live streaming industry, leading to underperformance of Huyas share price versus other online media platforms. We think Tencent taking control of Huya could help partly remove the overhang on Huyas com

23、petitive risk. Further market consolidation and/or better visibility on Huyas monetisation upside after the proposed deal could further drive sentiment for the stock.The impact of watching game live streaming on Kuaishou on time and money spent on other platforms0%5% 10% 15% 20% 25% 30%18%17%16%15%5

24、%3%No impact & use depends on different purposeDid not use other platforms before, only started watching on KuaishouHave shifted to KuaishouNo impact & use depends on different contentSpend less time and money on other platforms (except Huya/Douyu)Spend less time and money on Huya Spend less time an

25、d money on Douyu26%Source: UBS Evidence LabChina Internet SectorUBS ResearchOUR THESIS IN PICTURES HYPERLINK l _bookmark0 return Different platforms used to watch game live streaming among survey participants39%36%23%8%11%0%10% 20% 30% 40% 50% 60%Douyu Huya Bilibili Penguin KuaishouOther platforms48

26、%Douyu and Huya were the most popular platforms to watch game live streaming on while Kuaishous penetration remained low.Main consideration when choosing live streaming platforms20%19%11%0%20%40%60%Availability and popularity of content for specific gamesPopular game live broadcastersAvailability of

27、 specific e-sports tournamentUser experience (e.g., visual, speed)50%50% of respondents selected availability and popularity of content for specific games as the main consideration when they chose platforms.Reasons for not watching game live streaming on KuaishouPrefer more professional content on H

28、uya/Douyu etc.Like broadcasters on other platformsNot aware Kuaishou has game live streaming contentTournaments watched are not available on KuaishouGames watched are not available/popular on KuaishouOther reasons0% 5% 10% 15% 20% 25% 30%More professional game streaming content and availability of p

29、opular broadcasters were among the major reasons for viewers to choose Huya/Douyu.Reasons for watching game live streaming on KuaishouMore diversified content on KuaishouLike the game live streaming content on KuaishouThe broadcasters preferred moved to KuaishouOccasionally watched on Kuaishou on re

30、commendationsOther reasons0%20%40%60%80%15%8%7%0%71%Over 70% of respondents who watched game live streaming on Kuaishou chose it for its diversified content offering.Source: UBS Evidence Lab, Gamma Data (CNG)China Internet SectorUBS ResearchOUR THESIS IN PICTURES HYPERLINK l _bookmark0 return Top-ti

31、er streamers distribution across platformsPC gamesTop-tier streamers distribution across platformsmobile gamesDouyu led in the top-tier streamer portfolio for PC games. It took nine and seven seats among the top 10 most-tipped live streamers of PUBG and LoL.Huya outperformed in the top-tier streamer

32、 portfolio for mobile games. It took five and four seats among the top 10 most-tipped on HOK and Peacekeeper Elite.Number of professional game streamers across platforms(000)8070605040302010HuyaDouyuKuaishouBilibiliPenguinNetEase CCChushouLongzhuHuomao030%25%20%15%10%5%0%Huya and Douyu have secured

33、most professional game live streaming broadcasters, raising the entry barrier for blockbuster game titles.Number of professioal game streamers in 2Q19 Share of total game streamers on the platformDistribution of streamers from talent agencies in Q219Bilibili 2.6%Penguin e- Sports 9.3%Chushou Kuaisho

34、u 0.5%0.5%Longzhu0.4% NetEase CC0.1%Huomao 0.1%Huya 47.1%Huya has built up the largest talent agency ecosystem for game live streaming in China.Douyu 39.5%Source: XiaohuluGame live streamingfast-growing industry accommodates growth of multiple playersWe are optimistic on the growth outlook for the g

35、ame live streaming industry in China, driven by both user expansion and improving monetisation, supported by the development of the e-sports ecosystem in the country. However, we believe competition is increasing with the entrance of newcomers, ie, short video platform Kuaishou, and also Bilibili, l

36、eading to concerns on legacy platforms like Huya and Douyu. Tencent announced on 3 April that it will increase its fully diluted voting share in Huya from 40% to 50.1%, and will consolidate the latter thereafter. Post the proposed deal, we expect a more stabilised game streaming industry landscape,

37、particularly if further market consolidation around Huya and Douyu ensued.Over the long term, we remain positive on the industry and major platforms, expecting game live streaming industry growth to be fast enough to accommodate growth of multiple operators. Further investment in the industry is pos

38、sible but in the meantime, we believe Tencent is likely to balance the competitive landscape to avoid irrational competition. Among major platforms, we believe content/format differentiation will be the focus. In a more reasonable case, we expect Huya to continue to focus on hardcore and more profes

39、sional game live streaming content and users, while short video platforms would mainly cater to lighter users with more diversified content demand. Bilibili mainly targets to take more user time share leveraging its game streaming content, in our view.Huyaaccess to Tencents resources to increase in

40、a more stabilised market landscapeAs we discussed in our recent report, we think Huya could better leverage Tencents resources to improve its market positioning, including enhanced content and further monetisation opportunities, as well as cost-saving synergies.Enhanced content to improve user engag

41、ement: 1) securing broadcasting of major e-sports tournaments; and 2) collaboration with Tencent on streaming of newly launched games (eg, getting streamers trained in advance).Revenue upside via more diversified monetisation opportunities: 1) game advertising, ie, promotion of new games that could

42、potentially generate ad revenue; 2) game distribution, particularly alongside the development of 5G/cloud games, facilitating Huyas penetration of the downstream industry chain (1-15% revenue upside in 2022E).Cost-saving synergies, particularly if the market continues to consolidation (12-74% upside

43、 to our 2022E earnings estimates): 1) potentially lower content cost for tournaments hosted by Tencent or its investees; 2) lower revenue sharing ratio with streamers from the current 50% level; and 3) higher margins from ads and game distribution revenue versus tipping in streaming.We believe inves

44、tors were overly concerned about Huya in the recent past due to regulations and competition. We think the proposed Tencent deal could help partly remove the overhang on competitive risk. Further market consolidation and/or better visibility on Huyas monetisation upside after the proposed deal could

45、further drive sentiment for the stock, in our view.UBS Evidence Lab PulseCheck surveycompetitive pressure may not be bad as fearedWe think the user base and user behaviour on short video platforms like Kuaishou are still largely different from those on professional game live streaming platforms like

46、 Huya and Douyu at the current stage. As per UBS Evidence Labs survey data, most respondents were using Huya/Douyu for game live streaming due to professional contents. While some users had also started to use short video platforms like Kuaishou for game live streaming because of their more diversif

47、ied content, the purposes of using Kuaishou versus Huya/Douyu were different, according to survey respondents. And most of them claimed limited impact from the use of Kuaishou on their time/money spent on Huya/Douyu. However, competition might increase if those short video platforms become more aggr

48、essive at pushing for hardcore content.The UBS Evidence Lab PulseCheck survey of China game live streaming users indicates relative low penetration of the game live streaming industry in China, suggesting growth potential. Of the survey respondents, 71% heard about and watched game live streaming, b

49、ut only 22% claimed they regularly watched game live streaming.The UBS Evidence Lab survey data suggests that Douyu and Huya are the most popular platforms for watching game live streaming and few chose Kuaishou for the same purpose. Among respondents who had watched game live streaming. 48% claimed

50、 they used Douyu and 39% claimed they used Huya. However, only 8% chose Kuaishou in the survey. Bilibili is another popular platform: 36% of respondents claimed they used Bilibili to watch game live streaming.Figure 1: Awareness and watch frequency of game live streamingFigure 2: Different platforms

51、 used to watch game live streaming22%22%7%39%36%23%8%11%0% 10% 20% 30% 40% 50% 60%0%10%20%30%40%50%60%Heard & regularly watchHeard but rarely watchHeard but never watchedNever heard & never watched48%Douyu Huya Bilibili PenguinKuaishouOther platforms48%Source: UBS Evidence LabSource: UBS Evidence La

52、bIn the survey, 50% of respondents selected availability and popularity of content for specific games as the main consideration when they chose platforms for watching game live streaming. Popular game live broadcasters and the availability of specific e-sports tournaments were the next important con

53、siderations.Figure 3: Main consideration when choosing live streaming platforms0% 10% 20% 30% 40% 50% 60%20%19%11%Availability and popularity of content for specific gamesPopular game live broadcastersAvailability of specific e-sports tournamentUser experience (e.g., visual, speed)50%Source: UBS Evi

54、dence LabMore professional game live streaming content and the availability of popular game live broadcasters were among the major reasons for viewers to choose Huya and Douyu, instead of Kuaishou, to watch game live streaming. Of the respondents not using Kuaishou for game live streaming, 26% claim

55、ed they preferred the more professional game live streaming-related contents on Huya and Douyu; 20% claimed they liked broadcasters on the two platforms; and 19% had not noticed that Kuaishou offers game live streaming services. The availability of games/tournaments was another reason for not choosi

56、ng Kuaishou.More diversified content offering was the major reason for viewers to choose Kuaishou for watching game live streaming contents. Over 70% of respondents who watched game streaming on Kuaishou claimed that they went to Kuaishou for game streaming mainly due to the diversified content offe

57、ring on the platform. In comparison, only 23% of respondents preferred the game live streaming contents and broadcasters on Kuaishou. Also, 7% of respondents occasionally watched game live streaming on Kuaishou after browsing recommendations.Figure 4: Reasons for not watching game live streaming on

58、KuaishouFigure 5: Reasons for watching game live streaming on KuaishouPrefer more professional content on Huya/Douyu etc.Like broadcasters on other platformsNot aware Kuaishou has game live streaming contentTournaments watched are not available on KuaishouGames watched are not available/popular on K

59、uaishouOther reasons0%10%20%30%More diversified content on KuaishouLike the game live streaming content on KuaishouThe broadcasters preferred moved to KuaishouOccasionally watched on Kuaishou on recommendationsOther reasons0%20%40%60%80%15%8%7%0%71%Source: UBS Evidence LabSource: UBS Evidence LabIn

60、the survey, 42% of respondents who watched game live streaming on Kuaishou claimed no impact on their user behaviour on other platforms since they used different platforms for different purposes and different content. For instance, viewers chose Huya and Douyu when they wanted more professional game