Google Introduces Games Streaming Service Into Chinese Market

Alphabet Inc.’s Google has joined a funding round for a Chinese games-streaming service, making its second direct investment there since largely withdrawing from the country in 2010.

The Mountain View, California company is joining a Series D investment round for Chushou, whose name translates into “Tentacle,” a Chinese mobile-centric game live-streaming platform with 90 million registered users. Existing backers including Qiming Venture, Shunwei Capital and Alpha X Capital also joined the round, Chushou said in a statement that Google provided. 

The Chinese market alone is expected to generate 3 billion yuan ($462 million) of revenue and attract 140 million users this year, according to IResearch, as users track the online exploits of gamers within PlayerUnknown’s Battlegrounds or League of Legends. Chushou also competes with Huya, DouYu -- or “Fighting Fish” -- and Panda TV for dominance of game-streaming.

Google has been re-building its presence in China, where it defied the government in 2010 by refusing to self-censor search content and later had most of its services blocked. Chushou is only Google’s second direct investment since, after a 2015 decision to back local AI startup Mobvoi. The U.S. giant has been ramping up hiring and promotion of its TensorFlow AI tools, features Chief Executive Officer Sundar Pichai highlighted when he visited the country last year. It launched a Beijing-based AI research center in December.

With its latest deal, Google’s getting into an industry that’s subject to persistent and aggressive Chinese censorship. Beijing has launched periodic crackdowns on video streaming sites, aiming to root out everything from portrayals of violence to game addiction. Some of Chushou’s most popular streams feature PlayerUnknown’s Battlegrounds, a gore-splattered title in which players duel to the death.

The latest cash injection brings Chushou’s total funding to $120 million and will help it expand services around the world. Like Twitch, it offers viewers the chance to watch gamers hack and slash their way through over 1,000 titles. Since launching in August 2015, the platform has garnered 8 million unique streamers with an average of 250,000 live streamers active on the site each day -- most of whom are viewed via smartphones.

“Chushou has built an impressive platform, with a dedicated and quickly growing base of content creators and consumers, and smart expansion plans,” said Frank Lin, Google’s principal, corporate development for North Asia.

Google’s investment in Chushou comes after it lost out to Amazon.com Inc., which bought Twitch for $970 million in 2014. Since then, it’s attempted to launch live-streaming services for gamers via YouTube. Live-streaming of games has attracted the attention of technology giants, with Alibaba Group Holding Ltd. and Tencent Holdings Ltd. pushing into the sector. - Bloomberg