Huya Reduces League of Legends Esports License Fees

Key insights

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Key number

Huya's live-streaming revenue declined by 21.3% in 2023.

The company's live-streaming revenue fell from ¥8.2 billion in 2022 to ¥6.5 billion in 2023. This decline was driven by reduced user spending and a shift towards more prudent operational management.

New agreement

Huya reduced its League of Legends license fee for 2024–2025 to ¥230 million ($32.8 million).

Through a second supplemental agreement with TJ Sports, Huya renegotiated its broadcasting license. The new fee for the 2024–2025 period is ¥230 million ($32.8 million).

¥230M

Huya's renegotiated League of Legends license fee for 2024–2025.

Equivalent in USD.: $32.8M
Previous fee for 2024–2025.: ¥300M

Operational strategy

Huya's decision to amend the agreement reflects a strategic shift toward more prudent operations.

This strategic shift is a response to a soft macroeconomic environment and increased industry competition. The company aims to optimize investment efficiency by adopting a more selective approach to content procurement.

It's like a household tightening its budget during tough economic times, choosing carefully where to spend to get the most value.

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Summary

Huya Inc. has secured a significant reduction in its licensing fees for broadcasting League of Legends esports content in mainland China. Through a second supplemental agreement with TJ Sports—a joint venture between Tencent and Riot Games—the live-streaming platform has lowered its aggregate license fee for the 2024–2025 period to ¥230 million ($32.8 million). This represents a substantial decrease from the previously established fee of ¥300 million ($42.8 million) for the same timeframe.

This financial adjustment reflects a broader strategic shift for Huya as it navigates a challenging macroeconomic environment and intensified industry competition. The company reported a 21.3% decline in live-streaming revenue in 2023, falling from ¥8.2 billion to ¥6.5 billion, driven by reduced user spending and a shift toward more prudent operational management. Furthermore, the loss of sub-licensing rights for League of Legends matches, which occurred under a January 2023 agreement, has significantly impacted the company’s revenue streams.

The renegotiated terms are intended to alleviate financial pressure while allowing Huya to maintain access to high-value esports content. By moving away from exclusive rights and adopting a more selective approach to content procurement, the company is attempting to optimize its investment efficiency. Despite these fiscal constraints, Huya remains a major participant in the Chinese esports market, focusing on high-quality broadcasts to retain its user base amidst ongoing economic headwinds.