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SBD Global/December 5, 2017/Finance

Alibaba's First World Electronic Sports Games Results In 70% Loss In Investment

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The Alibaba Group "has invested heavily" in esports during the past 18 months, according to Angelos Anastasopoulos of THE ESPORTS OBSERVER. The first series of its World Electronic Sports Games cost a reported $22M but resulted in a 70% loss in investment for the Chinese firm. Alibaba "predicts these tournaments will continue operating at a loss for the next five years," but according to Alisports CEO Zhang Dazhong, "this is a financial hit the company is willing to take, in order to win long-term." Dazhong said, "We are prepared to lose money. We can accept the losses now as we hope to promote this sport. For a sport that has a lot of participation, it must have a bright future." Months after announcing its entry into the esports industry in March '16, Alibaba revealed its plans for the first WESG, which featured a $5.5M prize pool and endorsement from the Int'l e-Sports Federation. Zhang said, "We estimate that in five to 10 years the business model will be more complete. On top of the competitions, we have to bear in mind the electronics business and marketing related to esports" (THE ESPORTS OBSERVER, 12/1).

For more coverage of the business of esports, visit our partners, esportsobserver.com.
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