The whereabouts of Douyu CEO Chen Shaojie have finally been revealed in announcements from Douyu Company and the police recently. This company, which once had a foothold in the field of live gaming, was pushed to the forefront due to its CEO being deeply embroiled in public opinion turmoil.
As an industry giant with a market value of over 50 billion yuan, today's Douyu not only faces fierce market competition from the outside, but also needs to solve the internal turmoil and instability of the company. Under internal and external troubles, it can be said that it is difficult to move forward.
Internal turmoil is difficult to quell
The CEO and Chairman of the Board of Directors of the company, Chen Shaojie, was arrested by the Chengdu police around November 16, 2023. The company has not yet received any formal notice regarding the investigation into Chen Shaojie or the obvious reasons for his arrest. "In the public announcement released by Douyu, although there were only a few dozen words, it put the company in the forefront of public opinion. In the subsequent notice issued by the Dujiangyan Irrigation Project police, the reason was further explained: Chen Moujie was arrested in accordance with the law on suspicion of opening a casino. The case is under further investigation.
In the eyes of the outside world, when a company's CEO experiences such a significant illegal incident, it will bring a significant blow to the company. However, for Douyu, CEO Chen Shaojie's "East Window Incident" seems to have foreshadowed: Douyu, as a game live streaming platform, has long been known for its internal "chaos" in the industry.
According to the iQicha App, Wuhan Douyu Network Technology Co., Ltd., an affiliated company of Douyu live streaming platform, was established in May 2015 with a registered capital of approximately RMB 22.34 million. The legal representative is Gao Jie, and Douyu CEO Chen Shaojie holds approximately 50.2% of the shares. Risk information shows that the company has multiple administrative penalty messages. In September 2022, the company was fined 30000 yuan and confiscated 435.9 yuan of illegal gains by the Wuhan Municipal Bureau of Culture and Tourism due to violations of vulgar performance methods in some live streaming rooms. In 2022, the Douyu platform also fell into a gambling frenzy. The court of Dujiangyan Irrigation Project City, Sichuan Province, heard the case of using the live broadcast platform to open a casino. The defendants, Fu, Pan, and others guided users to participate in gambling games in the live broadcast room of "Send Nine Outdoors" on the fighting platform. According to the announcement of the Dujiangyan Irrigation Project Municipal Court, from March 2017 to September 2020, Fu and Pan used the lottery module of the "Fans Welfare Club" on the fighting platform to set the amount and number of prizes in advance and organize "Water Friends" to draw prizes. By the time of being captured, a total of 4200 lottery draws were organized, with over 4.42 million participants and a gambling investment of nearly 120 million yuan.
In addition, among the top ten cases of anti unfair competition and anti monopoly in the internet field first released by the Guangdong High Court, the dispute over unfair competition between Huya Company and Douyu Company is among them. The result of the judgment shows that the behavior of Douyu Company in publishing content and articles on its microblog account and WeChat official account spread false or misleading information, which caused negative comments on Tiger Teeth Company by the relevant public, damaged its business reputation and commodity reputation, and constituted a commercial defamation behavior as stipulated in Article 11 of the Anti Unfair Competition Law. Douyu Company was judged to issue an apology statement and compensate Tiger Teeth for its losses.
Industry insiders have analyzed that Douyu, as a listed company, has repeatedly engaged in illegal and irregular activities in different fields, indicating that its internal management has encountered the problem of "internal turmoil difficult to smooth out".
Turnover fatigue technique
Affected by news such as the CEO's arrest, the market value of Douyu has plummeted, and several investment banks have even given a "sell" rating. According to relevant data, from 2020 to 2022, the revenue of Douyu was 9.6 billion yuan, 9.1 billion yuan, and 7.1 billion yuan, respectively, continuously declining. In the past two years, Douyu's net profit has continued to suffer losses, and its stock price has also continued to decline. At the beginning of 2021, Douyu reached a maximum of $20.54 per share. As of the close on November 20, Douyu closed at $0.962, with a total market value of $308 million. In two years, Douyu's market value has dropped by over 90%.
As one of the two giants in the domestic game live streaming field, Douyu was once a leader in the game live streaming industry, and as early as 2018, it received a financing of $630 million from Tencent. In 2020, as the major shareholders of Douyu and Huya companies, Tencent proposed an invitation to merge the two into one. Although the plan was ultimately unsuccessful, it also highlighted the market value and position of Douyu at that time.
In the eyes of industry insiders, it is precisely because of the failed merger that Douyu and Huya have gone their separate ways, and their different choices have created a completely different development path. Huya has chosen to extend to fields such as esports, while Douyu has chosen the shortcut of "making quick money".
With the increasing number of entertainment methods available to users, the ceiling of entertainment live streaming has arrived. In this context, using some 'crooked ways' to improve financial data has become the choice of some business operators. In the opinion of Zhang Yi, CEO of iMedia Consulting, the large number of users who have accumulated in entertainment live streaming rooms should have a better monetization outlet, rather than using' crooked ideas'. Southern Daily reporter Ye Dan