Behind the gambling turmoil of the CEO of Douyu, the challenges and future of the game live broadcast industry

21st Century Business Herald reporter Zhu Weijing reported from Shanghai

The news of the arrest of Douyu CEO Chen Shaojie once again pushed the already troubled industry of game live broadcast into the whirlpool of the storm.

An industry insider close to Douyu in Beijing revealed to 21 reporters that Douyu's accident this time may involve a group of head game anchors in the future, mostly because of participation in gambling and money laundering.

Why do platforms, which have always been at the forefront of the high-voltage line of content compliance, always take the initiative to loosen the restrictions for the gambling-related scale? The once glorious game live streaming vertical platform is in trouble, what new story can be told?

Why "loosen" compliance standards?

In recent years, the entire game live streaming industry has been in a low period. Taking Huya and Douyu as examples, the financial report shows that Huya's revenue in the second quarter was 1.8214 billion yuan, down about 20% year-on-year, and Douyu's revenue was 1.3922 billion yuan, down 24.1% year-on-year.

When it comes to attribution, both mention the "macro environment and industry challenges."

With the rise of platforms such as Douyu, Kuaishou, and Bilibili and aiming at live game broadcasting, vertical platforms such as Huya and Douyu are facing greater pressure, and top anchors are losing. In August this year, the popular betta anchor "Xu Xu Baby", who has about 20 million followers, switched to Douyin. In January this year, the anchor of Douyu's "Glory of Kings" section Saobai has also been transferred to Kuaishou live broadcast.

"The entire live streaming industry, including game streaming, is facing growth exhaustion. Fang Zinan, a lawyer at Global Jingwei Law Firm, analyzed in an interview with 21 reporters that not only Douyu, but also many platforms have vague attitudes towards live gambling and pornography. "In rare cases, even some of the risky content may appear with the encouragement and instruction of the platform. The goal is to achieve the growth of the platform's revenue through the high addiction of relevant content. He said bluntly.

In addition, the legal characterization of some models is controversial. For example, in terms of the common open-box mechanism (random selection) in games, there is currently no conclusion in the world whether the relevant mode is gambling or not.

Specifically, in order to improve the fun of the live broadcast experience, almost all major live broadcast platforms will embed probabilistic games such as "big turntable" and "treasure chest" in the live broadcast room. These probabilistic games are originally for the purpose of entertainment, but in practice, users usually reward the streamer with gifts drawn from the small and large probability games, and the anchor will return the cash back to the user in proportion to the value of the gift, so as to achieve "upper and lower points".

Xu Wei, a partner at Beijing Jingjing Law Firm, analyzed that in this process, if the platform is aware of the existence of the "lower branch" channel and encourages or allows the anchor to recycle gifts, then the platform is likely to be suspected of opening a casino.

Can you still leave it to chance?

As we all know, there has always been regulatory and compliance pressure in the game live streaming industry.

According to Fang Zinan's analysis, in addition to pornography and gambling, the regulatory direction of the live broadcast industry is mainly oriented issues, violence and blood, cyber violence, protection of minors, and morality. Specific to game live streaming, maybe the version number is also a key point.

Previously, the news about gambling on the Douyu platform was widely spread on the Internet, especially about the gambling in the live broadcast rooms of the two Douyu platform accounts, "Ganggang Nine Outdoor" and "Changsha Rural Death Squad", which had attracted widespread attention.

At the end of 2022, the court ruled that the three people in the "Ganggang Nine Outdoor" used the live broadcast platform to open a casino to attract nearly 120 million yuan, constituting the crime of opening a casino, and the case was the first live broadcast platform gambling case in the country supervised and handled by the Ministry of Public Security.

However, betta fish still seem to be lucky. On May 8 this year, according to the "Cyberspace China", in response to the serious ecological problems such as pornography and vulgarity on the Douyu platform, the Cyberspace Administration of China instructed the Hubei Provincial Internet Information Office to send a working group to the Douyu platform to carry out a one-month centralized rectification and supervision.

"It can be said that the direction of supervision is clear, but the focus and granularity of supervision are different in different periods. Fang Zinan told 21 reporters that after the betta gambling incident, many of the games that may have been considered to be in the gray area before, such as lottery, red envelopes, treasure hunting, turntables and other models with randomness, small and large, two-way circulation possibilities, do not necessarily constitute gambling, but the risk of being administratively punished and even initiating a criminal investigation must be increased than before.

The advancement of Internet technology has provided great convenience for the implementation of new types of cybercrimes, and compared with traditional forms of crime, criminal acts committed through the Internet are more concealed and not easy to be traced. In addition, the "smart" platform has also learned to cleverly avoid risks and keep streamers at the forefront of the storm.

An industry insider who has served the live broadcast industry for more than ten years revealed to 21 reporters that many game streamers have been forced to tie up the chariot. He pointed out that in addition to large-scale salary cuts for game anchors, some platforms will also formulate rules to kidnap big anchors, "If big anchors don't participate, there will be no traffic." ”

Fang Zinan specifically analyzed the "Ganggang Nine Incident" related to the Douyu accident. He pointed out that this case is only a lottery for the anchor to give users a reward, which is in the nature of prize sales, and the realization link that makes it form a closed loop of gambling occurs outside the platform and belongs to the anchor's behavior, so it is believed that the platform can "get out of it", but some things are actually "dancing on the tip of the knife". "It may be okay now, but as soon as the granularity of regulation changes, it may be fine. He said.

In an interview with 21 reporters, Guo Tao, an angel investor and senior artificial intelligence expert, predicted that in the future, the regulatory authorities may formulate stricter regulations and policies to clarify the responsibilities and obligations of game live broadcast platforms to protect the rights and interests of users and the public interest. In addition, regulators may also cooperate with game live streaming platforms to jointly promote the self-regulation and standardization of the industry.

Is there still a story to tell?

The game live broadcast industry, which used to "lie down to make money", how should it endure after this round of storm?

On the occasion of its seventh anniversary, Huya is undergoing a strategic transformation, formulating a three-year plan that mainly includes the development of game distribution, game item sales and game advertising, and driving a shift in commercialization focus.

"Our main goal is to increase our game-related services revenue to 30% of total revenue within three years, creating a more balanced and diversified revenue structure that will lay the foundation for long-term success. In the second quarter earnings analyst call, Huang Junhong, acting co-CEO and senior vice president of Huya, said.

On August 16, Huya Live announced a strategic cooperation with China Mobile Migu UFC (Ultimate Fighting Championship) copyright, Huya high-profile crossover, and incorporated the mixed martial arts UFC into the e-sports and pan-entertainment live broadcast content ecology, hoping to supplement more content through new cooperation.

In addition, Guo Tao believes that the game live streaming industry can also embrace the latest technology trends. For example, the application of virtual reality (VR) and augmented reality (AR) technologies will bring more immersive experiences to game live streaming and attract more users to participate. "There is still potential and opportunity in the future game live streaming market, which is expected to achieve sustainable development through technological innovation, content moderation and user experience improvement. He said.

A senior game market practitioner analyzed to 21 reporters that if the game live broadcast industry wants to maintain competitiveness in the future, it needs to take a series of strategic measures, including expanding the international market, building a diversified business model, and improving the ability of effect advertising services.

According to data from App Growing, Bigo Live, the leading product of the Huanju era, is leading the way in the live streaming market, while Jojoo's real-time video chat, Uplive, a live social streaming product owned by Asia Innovation Group (AIG), and Pococha, a local live streaming app from Japan's DeNa, are also outstanding. In addition, Mico, which was acquired by Chizicheng, focuses on the "social + pan-entertainment" model, and its development momentum and investment have remained hot.

Previously, Chen Shaojie's last public appearance was in Douyu's earnings analyst conference call for the second quarter of 2023. At that time, he commented on the results, saying that the company continues to be committed to the core strategy: to build a vibrant, game-centric content ecosystem, and to develop a steady business, which will enhance Douyu's competitive advantage and leading position in the domestic game content industry.

Now it seems that the story is not well told.

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