China Bans Twitch as Crackdown on Video Games, Internet Usage Continues

Twitch

China has banned the use of the streaming service Twitch after the late August Asian Games drove a surge (23x) in the app’s downloads; gaming fans download the application to watch eSports competition that was not broadcast on state television (or domestic gaming livestreaming platforms). It’s been speculated that Chinese authorities are concerned with their inability to control the chat function within the Twitch service (as they can with their domestic competitors). Since the ban was implemented, it’s been confirmed that the Twitch app has been removed from the Chinese Apple App store and that access to the company’s website has been blocked in mainland China. While the site has risen to prominence in China over the last several weeks, competitors Douyu, YY and Huya all maintain “tens of millions of active monthly users”, far more than Twitch had accumulated.

Howie Long-Short: Last week, we noted that China’s Ministry of Education had recommended restricting the number of new video games released into the market, limits on internet usage, and an age-appropriate rating system for players, so it’s no surprise to see a wholesale ban placed on a Western video game streaming company. Of course, Twitch isn’t the first popular Western website/platform to be blocked by the Chinese authorities – YouTube, Facebook and Twitter also carry the distinction. Google isn’t banned, but has chosen not to operate in China for the last 8 years; the company is reportedly working on a censored search engine for use within the country.

China’s ban on Twitch is the country’s latest effort to control video gaming and dial back internet use, the perceived causes for the rising number of cases of myopia reported in minors. Back in August, when the government suspended the approval of all new games, Tencent’s market cap declined by $140 billion; TCEHY shares are down another -3.5% (opening at $41.79 on Tuesday) since the Twitch ban was implemented, but with the Chinese consumer already preferring to use alternative game streaming platforms (and thus never being reliant on Twitch), the company managed to avoid another double-digit percentage decline (in share price).

Fan Marino: Fortnite streamer Tyler “Ninja” Blevins built a following amongst gamers on the Twitch platform, but has now reached a level of fame that reaches far beyond the video game world. Just last week, ESPN The Magazine put “Ninja” on their oversized cover; the first professional gamer to receive that honor.

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Author: John Wall Street

At the intersection of sports & finance.

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