Chapter 20. Duowan's Killer Move

A chapter from ONE MORE WAY: The History Behind Chinese Esports, by BBKinG (Liu Yang). Translated from the Chinese original: 二十 多玩的绝招

First published in the author's Zhihu column on December 10, 2013: https://zhuanlan.zhihu.com/p/19634259

This translation was reviewed against the Chinese original on August 1, 2026. If you spot a mistranslation, a wrong name, or a factual error, please open an issue or send a pull request.

"If you are going to hit him with ninety-nine moves, why not just finish him with one?" Li Xueling, founder of Huanju Shidai

On November 22, 2012, Huanju Shidai (Nasdaq: YY) listed on Nasdaq in the United States with a market capitalisation of US$606 million. Huanju Shidai is the parent brand of both Duowan Games and YY. Most people are still more familiar with the name Duowan, so that is the name I will use in this chapter.

To be fair, Duowan did not start out in esports, so plenty of readers may wonder why it belongs in a history of what happened behind the scenes in Chinese esports.

Turn back through its own history, though, and you will find that Duowan is a very important link in that story, whether you look at the backgrounds of many of its long-serving staff or at YY Voice and the League of Legends Box that are so popular under its name today. It is worth understanding its past so that we can pay better attention to its future.

Duowan Games was born in style

Founder Li Xueling and general manager Zhang Yunfan, who later founded 178, set Duowan up in April 2005, and at that same moment secured a US$1 million angel investment from Lei Jun, chairman of Kingsoft Corporation and later the founder of Xiaomi.

Duowan Games may have started from a high position, but like many other Chinese games media, profit was a headache for a long time. Advertising revenue could not cover the company's day-to-day operations. Duowan itself admits that it was still losing money as late as 2011. Revenue kept growing, but costs kept swelling too. What many people may not know is that the YY project group alone employed more than 500 technical staff, and that is before counting marketing and operations, customer service and maintenance, and the enormous cost of servers and bandwidth. Fortunately investors kept believing in its prospects over those years, which is the only reason Duowan was able to hold on.

So the story behind Duowan has been a hard one. Let us start from the beginning.

Li Xueling, the philosophy graduate who went into IT

Li Xueling graduated from the philosophy department of Renmin University of China in 1997. By rights that makes him a typical humanities student, yet he was interested not only in news reporting but in IT as well. He went on to be editor-in-chief of Programmer magazine, editor-in-chief of Sohu IT and editor-in-chief of NetEase, and his network of contacts ran from the media world across into IT. Lei Jun, now Duowan's largest shareholder, is said to be someone he met while working as an IT reporter in Beijing.

Why bring up Li Xueling's attachment to IT? Because it shaped a great deal of what followed.

Duowan's offices today sit in the Yangcheng Creative Industry Zone, not far from central Guangzhou. The company is split into three business groups: the website, YY, and games. It has an imposing building of its own and more than a thousand employees, with a research and development team of several hundred more said to be in Zhuhai. In the beginning, though, Duowan struggled even to hire people.

In 2005, Li Xueling interviewed a candidate. The conversation went well and Li thought highly of him. Then the man said he was going out for a cigarette, and never came back. Li Xueling was still telling that story around the office years later.

The company had very few staff at first. When Sanmu, now editor-in-chief of Duowan Games, joined at the end of 2006, his employee number was only 35.

Small as it was, internal competition was fierce. The project PK system dates from that period: everyone wanted the good game projects, and if you wanted one you had to compete for it with a proposal.

Duowan Games grew slowly at first, which is easy to understand, because building up that first base of users takes the longest. In 2006 the sections for standalone, handheld and console games were drawing only 50,000 page views a day. The DKP system and the guild sections showed some signs of life, but not enough. Staff even went into games together to shout for users. Not until Duowan built a section for Perfect World's Wulin Waizhuan and passed 100,000 page views did it get a real fresh start.

By around 2006, World of Warcraft was the hottest online game there was, with nothing else close. Everyone wanted a piece of it, and Duowan and its staff were no exception.

When Duowan started building its World of Warcraft section, however, NGA, short for National Geographic of Azeroth, was already well established. Users were used to the NGA forum, and habits like that are very hard to change. Even now, all these years later, NGA is still the most active World of Warcraft forum there is, so you can imagine how formidable the opponent Duowan faced was.

Given that shape of the market, how do you make your own site different? Duowan began with a careful analysis of its competitor and of what players wanted.

After discussion and analysis, they found several weak points at NGA.

1. NGA had always run as a forum, with people posting to talk to each other. That really only served high-end online game users and questions about raids. At the time NGA offered no easily searchable, detailed database and no clearly organised section homepage, which made things hard for new players.

2. The content was not systematic enough. NGA had many people translating material from abroad, but the content of each individual post was not organised into a whole, and the forum refreshed so quickly that it was hard for users to get a clear picture of anything.

Only by understanding both your opponent and yourself do you have a chance of winning.

Duowan adjusted itself in response to these problems at NGA.

1. It built a thorough equipment database and improved the filtering, making it easy to look up data large and small.

2. It built a World of Warcraft section on the website, organised the large volume of material translated from abroad into a system, and used a detailed category layout to put the information on a single page that players could browse easily.

3. It paid attention to what ordinary players at the base of the game needed, collecting the newest problems appearing on every server and getting them discussed on the forum, and it worked out the lower-level raids thoroughly. It gathered and organised every question about the ten-player Karazhan raid, for example, down to the particular ways each class was played inside it.

Duowan's decision to work through what the users at the bottom of the pyramid needed brought an enormous return. After the change of strategy, it took only six months for the World of Warcraft section to reach five million page views by the middle of 2008.

It is worth mentioning that paying attention to what the middle and lower tiers of users are talking about is a strategy still in use today. On the recommendations page of Duowan's League of Legends Box you will often find a discussion thread about some talking point of the moment, which is exactly what the company learned back when it was building its World of Warcraft section.

Duowan's fork in the road in 2008

By 2008, Duowan had a bit over a hundred people. It was carrying plenty of advertising and still losing money. Several of the big Chinese games companies of the day, Shanda and Perfect World among them, wanted to buy it, since controlling what gets said is a good deal safer than buying advertising. Those external pressures, along with various internal ones, opened up a serious split in Duowan's management.

Duowan's general manager Zhang Yunfan wanted to sell. Li Xueling disagreed, believing Duowan could go higher. So Zhang Yunfan left Duowan for Beijing, and Li Xueling made a special trip there to talk with him for several days and nights, hoping he would change his mind. In the end Zhang Yunfan did not come back. An investor wanted to start a games media outlet, and that person went on to found the 178 website together with Zhang Yunfan and Miao Xinyu, now president of 178. 178 has countless connections of its own to esports, but that is another story and I will come to it later.

The rise of YY

In July 2008, Steamboat, the venture capital arm of Disney, saw the potential in YY Voice and put a second round of US$5 million into Duowan. (The first round was US$4 million from Morningside Ventures in February 2007.) That same year, YY passed 300,000 concurrent users.

In the early days of YY, when its features and technology were still rough, Li Xueling went into the channels every day to listen to user complaints. Some users were candid indeed: having not finished swearing at him inside YY, they added him on QQ specifically to carry on. Li Xueling took it, and he has kept the habit to this day, still using the company's own products himself and steadily improving the user experience.

Why did YY succeed, to the point of going up against a company as overwhelmingly strong as Tencent?

Li Xueling often says: if you are going to hit him with ninety-nine moves, why not just finish him with one?

That line reminds me of Occam's razor. This is how Duowan thinks, and how it acts: seize the point that matters most, solve the core problem, and treat everything else as filling in the gaps.

Applied to YY, that meant Duowan moved fast to concentrate on the platform's three core problems: no lag, no dropped connections, no delay. Everything else could be fixed slowly.

Guided by the same killer move, YY also dropped a lot of things platforms normally do. There are no pop-up advertisements, no news window on login, no advertising bars everywhere, because entities should not be multiplied beyond necessity.

This one example shows what a powerful strategy that is, and what a formidable company culture: steady, precise and ruthless, practical, no showy moves without substance and no empty hype. Go for the heart first and deal with everything else afterwards.

Rome was not built in a day, and neither was YY

The YY people see now is the result of a long stretch of technical work and detailed revision.

The layout of the first version of YY was very simple. The panel design of the second version was done by Chen Zhou, now general manager of the YY music business unit at Duowan. It was a very important redesign in YY's history and shaped the look of the versions that followed. Since YY took entertainment and music as its way in, Chen Zhou is also a very important figure in how YY grew.

In the words of Duowan's own people, YY's growth was driven by its users.

The feature that lets users send flowers and other virtual gifts to the stars they like, for instance, was suggested by users. Duowan built a revenue-sharing model with the stars on top of it, and that model created the unusual and healthy ecosystem around YY. It is that system that allows YY to hold on to its grassroots stars and gives the platform its cohesion and its core competitiveness.

By 2012, YY's game video streaming was reaching 500,000 to 600,000 concurrent viewers. A large number of esports tournaments and casters had begun using YY to broadcast, and it was earning very respectable money. In YY channel 90001, the channel of the WE club, someone is casting matches around the clock, and a good caster can take 10,000 to 20,000 yuan a month from the gift revenue share, with the big entertainment and singing channels earning more. YY had become a shortcut and a stage on which grassroots performers could make a name and a living.

YY has had its share of trouble as well. In 2008 a vice president at one company hired hackers to attack YY, which brought the service down repeatedly for a period. Duowan investigated for a long time, caught the hackers behind the attack, traced the trail back to the vice president, and put him in prison.

YY's difficulties and weak points

YY may already have a large user base and real revenue, but measured against the audience for traditional entertainment it is still a fairly niche crowd. Compare a grassroots singer who came out of YY with one who came out of The Voice of China, for example, and the gap is enormous in every respect. That tells you the YY platform is still not large enough or high enough.

The industry is confident that YY will break out. When that break will come depends on far too many factors.

Technically, the bottleneck lies in how far mobile broadband spreads and how far prices fall, and in whether video streaming can be made faster and smoother. Commercially, the keys to changing YY's position are how quickly the spending power of its core users, the generation born in the 1990s, grows, how far YY can extend into other age groups, and how good it becomes at packaging and building grassroots performers into stars. All of that depends on the strategy YY sets from here and how well it executes.

Put simply, YY is nowhere near television in influence at this stage, competitors are watching hungrily, and user growth is stuck against a bottleneck of technology and of the times. Its own high costs make profitability harder still, and none of this can be solved quickly. The future is certainly brighter, but how long this awkward period lasts is anyone's guess. Grow big or play safe? To be or not to be. It depends on how Duowan places its bet.

The Duowan Box

Duowan came very late to esports news sites. Sites like U9 had been doing esports since their Warcraft III RPG map days around 2004, which is why their sites had gathered so many users by the golden age of Dota and League of Legends that followed. Li Xueling always envied that and regretted coming to esports so late. So in the second quarter of 2011 Duowan started building its League of Legends section, and in June it launched the League of Legends Box.

Next to YY, which was a long-term bet, the Box was a genuinely quick and effective project. Whatever game is hot, you build for it. The technical staff were already in place and highly experienced. Users got into the habit of opening the Box before every game, news and forum talking points were pushed straight in front of players, traffic was directed with great precision, and the hotter someone else's game became, the hotter the Box became. A single product pulled together Duowan's own site content, YY and its technical resources. It really was a fine thing to have.

The head of the Box group is Hu Tianyu, a programmer by background and the founder of Yezizhu. He came to Duowan to sell software and Li Xueling grabbed him and brought him on board. Incidentally, most of Duowan's senior managers came up through technology, which I suspect has a great deal to do with Li Xueling's fondness for IT, and which is what laid down Duowan's practical company style.

At first the League of Legends Box had very few users, because it had very few features and demand for it was not strong. There were plenty of competing plugins at the same time: U9's LOL Assistant, 178's Dajiao, 17173's Shendeng and others.

In September 2011, the Box added a feature that showed the win rates of teammates and opponents. Everyone at the time had suffered enough from bad teammates in game, so the feature was welcomed widely the moment it appeared and took a large share of the market.

At the end of 2011 the Box followed up with a combat power rating system, which fed players' urge to compare themselves with each other, and at the start of 2012 it added item recommendations, which greatly lowered the barrier for new players.

After that rapid sequence of moves, the Box had essentially taken over what market share its competitors had left. Over the following year, Duowan integrated news, the forum, YY squad voice chat and YY tournament streams into the Box, and from that point on Duowan had the field to itself.

In November 2011, YY Voice's voice service ran to 421 billion minutes for the year, more than Skype over the same period. In February 2012, Duowan Games passed an average of 100 million page views a day.

Huanju Shidai has now finished consolidating the company's resources into a self-reinforcing model in which Duowan Games produces the content, YY and the Box provide the channels, and game operation turns it into revenue. Since 2009 it has allocated stock to all employees, building a steady and grounded company culture.

Finally, I hope Huanju Shidai can create more opportunities for Chinese esports, and that together we can make the esports pie bigger.