The Indian government’s decision to ban the country’s most popular title, PUBG MOBILE was always going to have a ripple effect across the entire industry and the effects are already being felt. Having lost out on what was their biggest market for the game, Tencent has reportedly lost nearly $42B USD in market value in just two days since the announcement. This is the second-largest market capitalization loss for the Chinese conglomerate following a $66B loss spurred by an executive order against WeChat by the US, which was mostly regained after two weeks. Tencent also lost $6B in market capitalization when India decided to ban TikTok on June 29. 

India continues to crack down on Chinese tech companies and investment operating in the country amidst growing military and political tensions between the two countries. The entire chain of events was sparked by the Galwan Valley clashes between the Indian Army and the People’s Liberation Army. The violent clash over a border dispute saw 20 deaths on the Indian side and over 35 on the Chinese side. This was followed by both countries deploying more troops in the region, leading to further escalation. While India maintained that border disputes would not affect trade between the nations, the country has taken economic action against Chinese firms in the form of additional scrutiny and outright banning of certain products. Coupled with a strong anti-China sentiment in the country and calls to boycott Chinese products, tensions between the two countries continue to escalate. 

India had already called for bans on Mobile Legends: Bang Bang and Clash of Kings when it banned 59 apps including TikTok on June 29. This was followed by reports of the Indian Army asking its staff to remove Chinese apps from their phones. On Sept. 2, the Indian government announced its decision to ban an additional 118 apps from Android and iOS devices. This included PUBG MOBILE and Arena of Valor among other games and apps. On both occasions, the Indian government said that the apps were involved in “activities that are prejudicial to the sovereignty and integrity of India, defence of India, security of state and public order.” The Indian Ministry of Electronics and Information Technology also said that it had received several reports from various sources regarding the misuse of these apps for “stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers which have locations outside India.”

China’s Response

China’s Commerce Ministry has already opposed the ban calling it a violation of legal interests of Chinese investors and service providers and asked India to correct its mistakes. In a statement to the Business Insider, Tencent said that the company “takes the protection of user privacy and data seriously. Our apps have always remained in compliance with data protection laws in India. We look forward to engaging with the Indian authorities to clarify our long-established policy and action in protecting user data and hope to ensure the continued availability of our apps in India.” Reports also suggest that India and China are expected to hold talks in Moscow. Indian Defence Minister Rajnath Singh will possibly be meeting with his Chinese counterpart, Wei Fenghe with the request for a meeting coming from the Chinese side. 

Indian Esports Community Unsure of Future

With the Indian Esports industry built largely on the back of PUBG MOBILE’s success, there certainly is a lot of uncertainty surrounding the incident. The title has allowed India to be a part of the conversation and form a massive community. Over the last year, there have been significant investments, both local and foreign into the Indian Esports ecosystem, fuelled by PUBG MOBILE’s popularity. From homemade teams cropping up with the help of private investment to the entry of legacy brands such as Fnatic and TSM entering the market, Indian Esports has seen more growth in the last year than ever before. The growing ecosystem also led to the formation of ancillary industries such as producers, designers, talent management agencies, and marketing agencies, all of whom will be affected by the ban.

Speaking about the ban, TSM told TEO, “We are sorry to hear about the ban, and hope that the situation can be resolved so players and fans alike can continue to connect through their passion for PUBG MOBILE and PUBG MOBILE Esports. As for the team, we are exploring multiple options. No decision has been made yet.” 

Another team that recently invested in India is Hong Kong-based mobile-first Esports organization, Nova Esports. Barely two months since it started fielding an Indian roster, the team has hit a proverbial wall with this ban. Nova’s CEO Oktay Olcen told TEO that the organization had big plans for the Indian region. 

“Our investment was planned for the next three years and we were planning to feed the Indian community with gaming events with participation of talented Chinese players and coordinating global tournaments (Scrim Series). This ban decision from the Indian Government suspends our plans. The Indian Government needs to understand that Esports and gaming is a culture and will be replaced with traditional sports in the near future. Esports is a main income source for thousands of people in India and a great way to bring investors and sponsors to the country to help Indian people and teams to help to grow in the Industry. This decision is breaking down the dreams of millions of youngsters to become professional players or streamers,” he said. 

Another major stakeholder in Indian Esports is NODWIN Gaming (a client of and a minority investor in AFK Gaming), one of the biggest tournament organizers in the region having brought in IPs like DreamHack and ESL One to the country. The company also operates the majority of the Tencent-sanctioned PUBG MOBILE events in India. NODWIN CEO Akshat Rathee said in a statement issued to TEO: “It is not our place as NODWIN Gaming to make a comment on this case since this is between the publisher and the government. We support the Esports and the gaming community at large and are dependent on the publisher and the nation to make it work. We look forward to an amicable and expeditious resolution.”