There’s a misconception that an India without PUBG Mobile as an esport would doom the industry there, which has put a heavy focus on the game since its release in the region due to its popularity. But long before the popular battle royale game gained prominence, the esports industry was growing thanks to NODWIN Gaming and other key players working diligently over the years. In 2016, NODWIN partnered with MTG subsidiaries ESL and DreamHack, two global esports organizers, to create tournaments such as the first of its kind ESL India Premiership competition, laying the groundwork for future big-money events and helping spotlight India on the global stage as a region that was serious about esports.
The future seemed bright for the game as a centerpiece of Indian esports, until earlier this year after a military conflict between China and India on the border changed everything. As tensions between the two countries intensified, the Indian government found the best way to hit back at China: its pocketbook. It banned more than a hundred popular apps that are developed by Chinese companies in the country, including PUBG Mobile and TikTok.
To understand why this has happened and if PUBG Mobile and other Chinese apps have a future in India, The Esports Observer spoke with Akshat Rathee, NODWIN Gaming co-founder and managing director.
Hitting Them Where it Hurts
It’s easy to understand why Chinese companies, particularly app developers and publishers, want to do business in India: there are more than 1.38B people in the country and most of them have mobile devices and access to relatively cheap broadband. Tencent Holdings is one such company, and as the publisher of PUBG Corporation’s popular battle royale game it found a great amount of success. According to a June report from Sensor Tower, prior to the game’s ban, PUBG Mobile had more than 175M installs from India alone, accounting for 24% of the total installs worldwide.
The problem that Chinese companies know all too well is that sometimes they are going to get caught in the middle of geopolitical issues they have nothing to do with, and the price of doing business is to just stay out of it, even when you are losing millions of dollars. On the other hand, adversaries of China will also take aim at you, and that is exactly what happened to many companies doing business in India in 2020.
To retaliate against China’s actions on its border, India implemented a series of sanctions, to take aim at China’s profits generated in the region. According to Rathee, this was all about hitting China financially, and not about any particular games or apps.
“So India and America came together and said, ‘Hey, we are creating wealth for this thing called China and if you have to put sanctions on a country like China, we have to put sanctions on their wealth creation ability.’ And wealth is being created for Chinese companies in all these stock markets, and the only way to attack the stock market is to destroy value both from a consumer base and consumption base.”
Rathee notes that India is following America’s lead in what it is doing with China, particularly with banning apps such as TikTok, which is causing a fragmentation of the Internet with different ecosystems for China, India, America, etc.
“This is about money. And this is what money can lead into. In the 20th century, sanctions were used by countries that were dominant at that time, Russia and America, against countries that didn’t behave. And what were sanctions? If you look at the international diplomacy playbook, sanctions are not a means of punishment. They are actually a means of coercion where they’re supposed to go have an effect. It’s not punishment for the sake of punishment. Punishment is not sanctions.”
But in addition to actual sanctions, bans on Chinese products such as apps are an added tool to force China into compliance.
“America and India basically have said, ‘Hey, we understand this is the way to put sanctions on companies in China’ where they relocate and then comply with U.S. law.”
One thing he is sure of is that apps that have been banned in India are hapless victims of circumstance simply for being the most popular or profitable at the wrong moment in time.
“If you take a step back, then you understand what’s happening with PUBG Mobile; it’s literally collateral damage right now,” Rathee said, adding that “They [India, America] are saying ‘there is a sizable install base for your company in India, we will hurt you.’”
A Triumphant Return or a Tragic End?
Shortly after the game was banned in India, PUBG Corp. announced that it was taking over the publishing and distribution rights to PUBG Mobile from Tencent in the country. As we’ve reported, the company has begun talking to major stakeholders in India about taking over distribution of the game, including telecoms Reliance Jio and Airtel, but the biggest challenge is getting the Indian government to change its position on the game. As of this writing government officials who have spoken to the media have said that the status of the game won’t change anytime soon and that PUBG Corp. hasn’t made any efforts to engage officials on the matter.
Despite the fact that the situation seems dire and untenable, Rathee believes that PUBG Mobile will be reinstated in India eventually.
“I don’t think PUBG Mobile is done in India at all. I think you have to go ahead and understand what is the risk and what are the requirements. What does India want in this? A company that will comply with democracy or the rule of law as defined by America and India. By definition PUBG Corp. based out of the U.S. complies, a South Korean company, fundamentally complies. And if they can find an Indian partner, whomever that may be, it doesn’t matter.”
Rathee believes that whoever becomes PUBG Corp.’s partner in the region will be a major player that will provide the greatest benefit to the country. The other challenge he sees is about personal data and where it will ultimately be stored. When the Indian government banned the apps earlier this year it cited concerns with where user data (personal, financial) was being stored, if it was being shared with the Chinese government, and how this access to information was a risk to the country’s national security. With Tencent out of the picture, the argument about PUBG Mobile user and financial data going to China evaporates. When these and other issues with the PUBG Mobile are dealt with, Rathee expects the game will be restored in India, but if it extends beyond that, organizations that have focused all their efforts on just PUBG Mobile will have some hard choices to make.
“It’s already been a month and a half that it’s been banned and I think it has another month and a half, maybe two, maybe two and a half months. If the ban extends beyond a quarter, maybe four months, that’s where you will start seeing massive change. Eventually, I do believe in the medium-term, not in the long-term, PUBG Mobile will be unbanned.”
Rathee does think that if the ban extends beyond a certain amount of time, there will be some hard choices to make for small-scale clubs and major esports organizations in India. In the short-term, he believes this is a good opportunity for the esports industry to evolve.
“Professional teams as defined by practice as having salaries, benefits, team houses, etc., are less in the country. Those teams are fundamentally going to have to question rosters. These are teams like Entity and Fnatic, and other good teams out there. So, this will create an opportunity for the team to diversify into other games, but also being able to generate revenue through things like streaming, streaming endorsements, overall just creating good content and exploring the business models of the team.”
Organizations that focus on one game do not work by Rathee’s estimation.
“We had four titles in the premiership; there was PUBG Mobile, but there was also Counter-Strike, FIFA, and also Clash of Clans …and we also had a Valorant tournament.. we had a lot of things. If you’re an esports team, and we’ve seen this Vitality, Natus Vincere, Cloud9, and every great esports team out there – you’re never a single esports title team. It just doesn’t work. It works in closed ecosystems where there’s a franchise league like Overwatch or League of Legends, but franchising has not happened in India and therefore every esports team in India should have a multi-game roster.”
And while he has done everything he can as a major player in India’s esports industry to bring stakeholders to the table and resolve the situation, Rathee also acknowledges that his influence can only go so far.
“As of right now, I’m creating value in India. India and China are fighting. India decided that Chinese apps are illegal. It’s above my pay grade. I can’t do anything about them. I can just try and solve the problem by introducing different partners that potentially can work with Google. But I am not the prime minister of this country, I am not anyone. And that’s it. It’s just an acceptance of that to go ahead and say, we will go ahead and do this.“
And while India may be a dead zone for PUBG Mobile right now, NODWIN is continuing to do business that revolves around the game by organizing events throughout Southeast Asia. Spots that were once dedicated to Indian teams are being filled by other regions.
“PUBG Mobile has only been banned in India. NODWIN has a very strong relationship with Krafton and PUBG Mobile and so we have gone on to run South Asia for them. So we run India, Pakistan, Bangladesh, Sri Lanka, Nepal, all these countries. We have also expanded into Africa. So PUBG Mobile is running in our South African championships.
“So right now we are doing the PUBG Mobile Pro League for South Asia and it doesn’t have Indian teams, it has other countries’ teams. It has more Nepali teams, it has more Pakistani teams… so four slots needed to be filled up out of 16 slots and we’re filling those slots.”
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