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How Google’s Relationship with Chushou Works

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Helping Chushou reach offshore users

A few weeks after Alphabet (GOOGL) set February 1, 2018, as the date for its 4Q17 earnings reporting, Google disclosed investing in China-based (MCHI) eSports platform Chushou. Google, which is Alphabet’s largest branch, didn’t reveal the amount of investment or stake it was taking in Chushou, but it disclosed how it wanted the partnership to work.

In building a relationship with Chushou, Google said its plan is to help the Chinese startup expand its services so it can reach more overseas audiences. Chushou was founded in 2015, and it claims to operate the most active mobile gaming community in China.

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250,000 live sports daily

The Chushou platform hosts 250,000 live sports events daily and has attracted roughly 8 million content contributors or streamers in the industry. eSports involves players competing on virtual games in tournaments.

The investment in Chushou seems to fit with Google’s push into the eSports industry, which it has been doing through its YouTube platform. In 2017, Google made its first major investment in eSports with YouTube signing a multi-year deal with eSports platform FACEIT for exclusive rights to live stream the Esports Championship Series, a virtual gaming league that draws millions of online spectators.

Boosting the appeal of YouTube

Research firm Newzoo estimates that eSports audiences grew to 385 million people in 2017 compared to 200 million in 2015. The audience is expected to continue swelling, thanks to efforts such as Google’s move to help China-based eSports platform Chushou increase its overseas reach.

With Facebook (FB), Twitter (TWTR), and Snap (SNAP) doubling down on their online video investments to take on YouTube, the move into eSports provides an opportunity for Google to enhance the appeal of YouTube and, in turn, mitigate the impact of the competition.

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