21st Century Business Herald Reporter Zhu Weijing reports from Shanghai
The news of Douyu CEO Chen Shaojie's arrest has once again pushed the already struggling gaming live streaming industry into a whirlpool of storms.
A Beijing industry insider close to Douyu revealed to 21 reporters that the Douyu incident may involve a group of top game anchors in the future, mainly due to their involvement in gambling and money laundering.
Why do platforms that have always been at the forefront of content compliance high-voltage lines always take chances to "voluntarily loosen ties" for gambling scale? What new stories can be told when the once glorious game live streaming platform is in trouble?
Why "unbind" compliance standards?
In recent years, the entire game live streaming industry has been in a downturn. Taking Huya and Douyu as examples, the financial report shows that Huya's revenue in the second quarter was 1.8214 billion yuan, a year-on-year decrease of about 20%; Douyu's revenue was 1.3922 billion yuan, a year-on-year decrease of 24.1%.
When attributing, both mentioned "macro environment and industry challenges".
With the rise of platforms such as Douyu, Kwai, and Station B and the targeting of live games, vertical platforms such as Tiger Teeth and Douyu are facing greater pressure, and head anchors are losing. Now in August, the popular Douyu anchor "Xuxu Baobao" with about 20 million fans has turned to Tiktok. In January this year, Sao Bai, the anchor of the "King Glory" section of the fighting fish, has also been transferred to Kwai live broadcast.
"The entire live streaming industry, including gaming live streaming, is facing the problem of growth fatigue." Fang Zinan, a lawyer at Global Times, analyzed in an interview with 21 reporters that not only Douyu, but also many platforms have unclear attitudes towards live streaming related to gambling and pornography. "In rare cases, even some risky content may appear under the encouragement and guidance of the platform. The goal is to achieve platform revenue growth through the high addictive nature of related content," he said bluntly.
In addition, the legal characterization of some models is controversial. For example, taking the common unboxing mechanism (random selection) in games as an example, there is currently no consensus worldwide on whether the relevant modes belong to gambling.
Specifically, in order to enhance the fun of the live streaming experience, almost all major live streaming platforms will embed probability games such as "Big Wheel" and "Open Treasure Box" in their live rooms. These probability games were originally designed for entertainment purposes, but in practice, users usually reward the broadcasters with gifts extracted from games with small and large probabilities. The broadcasters will refund the gifts to users in proportion to their value, in order to achieve "up and down points".
Xu Wei, a partner at Beijing Kyoto Law Firm, analyzed that during this process, if the platform is aware of the existence of the "down payment" channel and encourages or allows broadcasters to collect gifts, then the platform is likely to be suspected of the crime of opening a casino.
Can one still hold onto luck?
As is well known, the game live streaming industry has always faced regulatory and compliance pressures.
According to Fang Zinan's analysis, the regulatory direction of the live streaming industry, in addition to pornography and gambling, mainly focuses on directional issues, violent and bloody behavior, online violence, protection of minors, and moral values. When it comes to game live streaming, the version number may also be a key focus.
Previously, news about Douyu platform's involvement in gambling spread widely on the internet, especially regarding the gambling situation in the live broadcast rooms of Douyu platform accounts such as "Send Nine Outdoor" and "Changsha Rural Expendables", which had attracted widespread attention.
At the end of 2022, the court ruled that three individuals involved in "Sending Nine Outdoors" used a live streaming platform to open a casino and attract nearly 120 million yuan, constituting the crime of opening a casino. This case is the first nationwide gambling case involving a live streaming platform supervised by the Ministry of Public Security.
However, Douyu still seems to have a mentality of luck. On May 8th of this year, according to "NetEase China", in response to serious ecological problems such as pornography and vulgarity on the Douyu platform, the National Internet Information Office guided the Hubei Provincial Internet Information Office to send a working group to the Douyu platform to carry out a one month centralized rectification supervision.
"It can be said that the direction of regulation is clear, but the focus and granularity of regulation are different in different periods." Fang Zinan told 21 reporters that after the Douyu gambling incident, many gameplay methods that were previously considered to be in a gray area, such as lottery, red envelopes, treasure snatching, and roulette wheel models with randomness, small, broad, and two-way circulation characteristics, may not necessarily constitute gambling, but are subject to administrative penalties The risk of initiating a criminal investigation is definitely increasing compared to before.
The advancement of internet technology has provided great convenience for the implementation of new types of cybercrime. Compared with traditional forms of crime, criminal acts committed through the internet are more covert and less easily pursued. In addition, "smart" platforms have also learned to cleverly avoid risks and keep broadcasters at the forefront of the storm.
A service live streaming industry insider who has been in the industry for over a decade revealed to 21 reporters that many game anchors have been forced to tie up in battle vehicles. He pointed out that in addition to large-scale salary cuts for game anchors, some platforms will also establish rules and kidnap big anchors. "If big anchors don't participate, there will be no traffic."
Fang Zinan specifically analyzed the "Sending Nine Incident" related to the Douyu incident. He pointed out that this case, on the surface, is only a lottery provided by the anchor to users for their reward behavior. On the surface, it is a lottery sales nature, and the monetization process that forms a gambling loop occurs outside the platform and belongs to the anchor's behavior. Therefore, it is believed that the platform can "fully withdraw" from it, but some things are actually "dancing on the edge of the knife". "It may be fine now, as soon as the granularity of regulation changes, something may happen," he said.
Angel investor and senior artificial intelligence expert Guo Tao predicted in an interview with 21 reporters that in the future, regulatory authorities may formulate stricter regulations and policies to clarify the responsibilities and obligations of game live streaming platforms, in order to protect user rights and social public interests. In addition, regulatory agencies may also collaborate with game live streaming platforms to jointly promote industry self-discipline and standardized development.
Is there any story to tell?
How should the game live streaming industry, which used to make money while lying down, endure the storm and wait for change?
On the occasion of its seventh anniversary, Huya is undergoing strategic transformation. The three-year plan it has formulated mainly includes developing business such as game distribution, game prop sales, and game advertising, promoting a shift in commercialization focus.
"Our main goal is to increase game related service revenue to 30% of total revenue within three years, create a more balanced and diversified revenue structure, and lay a solid foundation for long-term success." Huang Junhong, Acting Co CEO and Senior Vice President of Huya Company, stated in the Q2 financial report analyst conference call.
On August 16th, Huya Live announced a strategic partnership with China Mobile's Migu UFC (Ultimate Fighting Championship) copyright. Huya made a high-profile cross-border move and incorporated the comprehensive fighting event UFC into the content ecosystem of esports and pan entertainment live broadcasts, hoping to supplement more content through new collaborations.
In addition, Guo Tao believes that the game live streaming industry can also embrace the latest technological trends. For example, the application of virtual reality (VR) and augmented reality (AR) technology will bring more immersive experiences to game live streaming, attracting more users to participate. "The future game live streaming market still has potential and opportunities, and sustainable development is expected to be achieved through technological innovation, content regulation, and improved user experience," he said.
A senior gaming market practitioner analyzed to 21 reporters that in order to maintain competitiveness in the gaming live streaming industry in the future, a series of strategic measures need to be taken, including expanding international markets, building diversified business models, improving advertising service capabilities, and so on.
According to AppGrowing's data, currently in the race of live streaming going global, Bigo Live, the leading product of Juju Era, is leading the way. Jojoo's real-time video chat, Uplive, a live social product under the Asian Innovation Group (AIG), and Pococha, a local live streaming application from Japan's DeNa, have also performed outstandingly. In addition, Mico, which was acquired by Chizi City, focuses on a "social+pan entertainment" model and maintains a hot development momentum and investment.
Previously, Chen Shaojie's last public appearance was during Douyu's Q2 2023 earnings analyst conference call. At that time, when commenting on performance, he stated that the company continued to be committed to its core strategy: creating a vibrant, game centric content ecosystem; Stable business development will enhance Douyu's competitive advantage and leading position in the domestic game content industry.
Now it seems that this story has not been told well.