According to the "Science and Technology Innovation Board Daily", the reporter learned from people familiar with the matter that Chen Shaojie, the founder and CEO of Douyu, has been released on bail pending trial. Some legal sources have extrapolated from the circumstances of his case that Chen Shaojie's specific sentence may be between 5 and 7 years.
Chen Shaojie Source: "Douyu Live Platform" WeChat public account
On suspicion of opening a casino, in November 2023, Chen Shaojie was arrested by the Chengdu Dujiangyan Public Security Bureau. After the incident, Douyu set up an interim management committee, and said on the third quarter earnings call at that time that "at present, Douyu is operating normally, and the investigation has not had a significant impact on the company's operations." Since then, there has been no disclosure of Chen Shaojie's information about Douyu.
A "post-80s" billionaire who founded a live broadcast giant
Arrested on suspicion of opening a casino
According to public information, Chen Shaojie was born in Jinan in 1984. Since the fifth grade of elementary school, he has been obsessed with games, and when he arrived at university, he even spent all night in Internet cafes. When I was a freshman, I dropped out of school and became a "squatting at home".
Chen Shaojie's entrepreneurial experience is quite legendary. After the Spring Festival in 2006, 21-year-old Chen Shaojie came to Wuhan. With a 10-year track record as a veteran gamer, he quickly landed a job developing a platform for game battles.
In 2010, Chen Shaojie, who was only 26 years old, bought Station A, the "originator of the ACG website" in China. At station A, the "live broadcasting" channel of station A was established.
In 2014, he made the "Shengbo" channel independent from Station A and renamed it "Douyu TV".
Image source: Photo by reporter Dong Xingsheng
In just a few years since then, Betta has grown by leaps and bounds, and has received investment from well-known capitals, including Sequoia China.
Headquartered in Wuhan, Douyu is a game-centric live streaming platform that allows users to enjoy interactive games and entertainment live streaming through platforms on PC and mobile apps.
In July 2019, Betta was listed on the NASDAQ, with a market capitalization of nearly $4 billion on the day. Chen Shaojie's personal wealth also skyrocketed. In October of that year, Chen Shaojie ranked 1507th in the "2019 Hurun Report" with a net worth of 2.5 billion yuan.
In 2020, Douyu and Huya (NYSE: HUYA), another game live streaming platform, had planned to merge, but on July 12, 2021, Douyu announced on its official website that it would terminate the merger agreement with Huya.
On November 21 last year, Douyu announced that the company's CEO Chen Shaojie was arrested by Chengdu police around November 16, 2023. Douyu said Chen's continued detention and any subsequent related legal proceedings and enforcement actions against the parties involved could have a material adverse impact on the company's reputation, business and results of operations.
On November 22, 2023, the Chengdu Dujiangyan Public Security Bureau issued a police notice: After investigation, our bureau found that Chen Moujie (male, 39 years old) was suspected of opening a casino. At present, Chen Moujie has been arrested in accordance with the law. Further investigation is ongoing.
Mr. Chen's last public appearance before his arrest was during a conference call after Douyu's second-quarter earnings report on Aug. 14 last year. At that time, he said that he would continue to build a healthy and sustainable game community ecology of Douyu, attach importance to the operation of core users, implement the development strategy of "a diversified content ecological platform with games as the core", and devote himself to the production of high-quality content and the innovation of product models.
A number of top anchors stopped broadcasting and changed jobs
Revenue continued to decline, and market value shrank
The arrest of the company's helmsman involved in the case has brought a lot of aftermath to Douyu. The turmoil and loss of top anchors are particularly significant here.
After Chen Shaojie was arrested, a large number of Douyu's head anchors suspended the live broadcast, and then only some anchors announced the resumption of broadcasting. At that time, it was rumored in the industry that it was related to Chen Shaojie, and the reason was mostly involved in gambling and money laundering.
According to the "Science and Technology Innovation Board Daily", in March this year, the well-known anchor "Xiao Tuantuan", who had been off the air for more than a month, was confirmed to be arrested. A person familiar with the matter told reporters that "Xiao Tuan Tuan" was also suspected of large-scale gambling and was related to Chen Shaojie's case.
On January 27, "Xiao Tuan Tuan" posted a dynamic announcement at Douyu Fish Bar to stop broadcasting, and there has been no news since then, and her Weibo update is stuck on December 2, 2023.
It is understood that the commercial value of "Xiaotuantuan" is very high, with 26 million Douyu fans and 37 million Douyin fans. In May 2019, in the list of betta gift income rankings, "Xiaotuantuan" got a gift income of 5.39 million yuan, which was second only to the "first brother" Xu Xu baby on the list at that time, surpassing PDD. With more than 10 million users, it is one of the most popular navigation voice packs.
And Douyu "Hearthstone First Brother", the well-known anchor "Dog Thief" was also rumored to be involved in the case and arrested, and the live broadcast room has been suspended since November last year.
After Chen Shaoming's incident, the head anchors of Douyu are like "the tree is falling and scattered", Zhang Daxian, Xu Xu Baobao, etc. are now on Douyin, while PDD, Da Sima, etc. are still on the air.
At present, Douyu's paying subscribers continue to churn, with MAUs (monthly active users) in the fourth quarter of 2023 being 51.7 million, a decrease of 5.7 million compared to the same period last year, and an average of 3.7 million paying users in the fourth quarter, a decrease of 1.9 million year-on-year.
In 2023, Douyu will usher in its first annual report in nearly three years, but its revenue will continue to decline. Douyu's revenue from 2020 to 2023 will be 9.6 billion yuan, 9.1 billion yuan, 7.1 billion yuan, and 5.53 billion yuan respectively, which is on a downward trajectory, and in terms of net profit, Douyu will lose money for two consecutive years in 2021 and 2022, and finally turn losses into profits in 2023, with a net profit of 154 million yuan.
However, like most Internet platforms, the improvement of Douyu's profitability does not come from the growth of revenue, but from cost control. While reducing costs, improving operational efficiency, and boosting performance, after experiencing the founder shock, a number of changes in Douyu also began in the fourth quarter of last year.
As of the close of trading on April 19, Douyu's stock price was $8.06, with a total market capitalization of $258 million. At the beginning of 2021, the market value of Betta Fish exceeded $3 billion, and now it has evaporated by more than 9%.