FROM CLOSURE TO GRADUAL RELEASE OF

EGS INDUSTRY: EMPIRICAL EVIDENCE

FROM THE SPATIAL EVOLUTION AND

CAUSAL MECHANISM IN THE MAIN TOWN

AREA OF WUHAN, CHINA

Jiajun Xu

Institute for Advanced Studies, University of Malaya.

50603 Kuala Lumpur, Malaysia.

jiajunxu2000@gmail.com - https://orcid.org/0009-0000-9130-1025

Hongtao Wang

College of Urban and Environmental Sciences, Central China Normal University.

430079 Wuhan, Hubei, China

hongtaowang2001@gmail.com - https://orcid.org/0009-0008-6454-0598

Wanying Liao

Faculty of Arts and Social Sciences, University of Malaya.

50603 Kuala Lumpur, Malaysia.

wanyingliao1998@gmail.com - https://orcid.org/0009-0002-3259-9663

Chng Saun Fong*

Institute for Advanced Studies, University of Malaya.

50603 Kuala Lumpur, Malaysia.

fongcs92@um.edu.my - https://orcid.org/0000-0002-7068-2284

Reception: 05/04/2023 Acceptance: 29/04/2023 Publication: 28/06/2023

Suggested citation:

Xu, J., Wang, H., Liao, W. and Fong, C.S. (2023). From Closure to Gradual

Release of EGS Industry: Empirical Evidence from the Spatial Evolution

and Causal Mechanism in the Main Town Area of Wuhan, China. 3C

Empresa. Investigación y pensamiento crítico, 12(2), 15-37. https://doi.org/

10.17993/3cemp.2023.120252.15-37

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ABSTRACT

With the economic impact and increasing popularity of the electronic gaming industry,

EGS (Electronic Gaming Sports) had become an important topic of debate in sports

academia regarding its conceptual delineation and attribute characteristics. This paper

jumped out of the hotspot academic perspective of the concept, characteristics, and

impacts of EGS. In response to the gaps in the spatial development of the EGS

industry and the lack of empirical research findings, an interpretive empirical research

method was adopted, focusing on Wuhan as the study area to gain insight into the

situation where the spatial development of the EGS industry was unclear. The spatial

evolution of the EGS industry in the main town area of Wuhan was interpreted through

a quantitative approach and based on the spatial data of EGS companies from 2006

to 2022 using Average Nearest Neighbor (ANN), Kernel Density Estimation (KDE),

and Ordinary Kriging (OK) of geospatial analysis. The results indicated closure to the

gradual release of the EGS industry, with specific findings as follows. (1) The EGS

industry in the main town area of Wuhan from 2006 to 2022 developed rapidly, and

the overall spatial distribution showed a process from discrete to cluster, accompanied

by an apparent deepening of aggregation in recent years. The local aggregation of the

EGS industry transformed from dual to multiple cores, and the multiple cores formed

stronger groups of aggregation as the cluster spread and merged. (2) The spatial

interpolation of the registered capital of companies predicted the hot spot of high-

capital distribution of EGS companies in the Optics Valley vice town area of Hongshan

to the southeast, indicating that more competitive EGS companies and larger EGS

industry groups might emerge in Optics Valley in the future. (3) The spatial evolution

of the EGS industry in the main town area of Wuhan could be divided into an early

start phase from 2006-2010, a rapid development phase from 2010-2014, an

aggregate explosion phase from 2014-2018, and a cluster integration phase from

2018-2022. (4) The spatial evolution of the EGS industry was influenced not only by

the main factors of industrial economic agglomeration, industrial chain derivation, and

industrial policy environment but also by the other factors of land and talent market,

adjacent infrastructure support, city industrial promotion, and globalization

dissemination. The future development of the EGS industry could be guided by the

government's industrial policies, supported by high-quality talent teams, and driven by

local promotion and international communication to provide an essential impetus for

the optimal EGS industry.

KEYWORDS

Electronic Gaming Sports (EGS); Spatial Evolution Pattern; Capital Weighted

Forecast; Causal Mechanism; Wuhan, China.

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INDEX

ABSTRACT

KEYWORDS

1. INTRODUCTION

2. METHODOLOGY

2.1. Description of the Study Area

2.2. Data Collection

2.3. Design of the Study

3. RESULTS AND DISCUSSIONS

3.1. Spatial Evolution of the EGS Industry

3.1.1. Spatial Distribution Characteristics of the EGS Industry

3.1.2. Spatial Evolution Trends of the EGS Industry

3.1.3. Spatial Forecast of the High-Capital EGS Industry

3.2. Causation and Suggestions for the EGS Industry

3.2.1. Causation for Spatial Evolution of the EGS Industry

3.2.2. Suggestion for Future Development of the EGS Industry

4. CONCLUSIONS

4.1. Conclusion

4.2. Limitation and Prospect

5. DATA AVAILABILITY

6. CONFLICT OF INTEREST

REFERENCES

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1. INTRODUCTION

With the economic impact and increasing popularity of electronic gaming industries,

EGS (Electronic Gaming Sports) had become an important topic of debate in the

academic debate on sport, and how the future direction of EGS would evolve was the

issue’s main focus [1]. In recent years, EGS had been one of the fastest-growing and

most convenient forms of entertainment, driven by new media technologies to become

mainstream [2]. EGS was a sport in which electronic gaming competitions reached the

organized competition level. A sports model combined athleticism, technology,

spectacle, and entertainment by using modern technology to organically integrate

electronic games with the rules of traditional sports competitions. EGS connected the

Internet, traditional media, and new mass-consumption industries with low pollution,

strong driving effects, and sustainable development, and was conducive to promoting

the city’s image. However, due to the younger demographic of the EGS industry, there

was a general perception that the development of the EGS industry had a negative

impact on young people [3]. The negative effects include health, psychological,

consumer, social, and ethical issues for young people [4, 5, 6, 7].

As an emerging topic of interest to scholars from various disciplines, there was a

debate among academics as to whether EGS qualifies as a sport. Some scholars

suggested that EGS was different from other traditional sports because it could be

considered both recreational and physical, and as a cultural industry practice was

bound to accelerate the development of society [8]. Conversely, some scholars

claimed that EGS was not a sport, regardless of its similarity to sports [9, 10]. Some

scholars proposed that EGS as a form of sportification, whether it fell within the

definition of sport or not, needed to be examed for its positive or negative impact on

the industry through sports management [11]. Furthermore, EGS was not just about

playing electronic games but also being used to satisfy team relationships and a

sense of social belonging [12]. After EGS players face social isolation due to

excessive gaming, social capital was fostered by constructing communication

mechanisms between online gaming and offline social interaction, transforming EGS

into real-life social support with positive potential [6,13]. Some scholars studied the

potential of EGS as a sporting category from the perspective of professional

recognition in the school, suggesting a relationship between EGS and education in

academia [14]. The findings showed that EGS penetrated the daily life of Chinese

college students, so it was crucial for students to plan a rational schedule and

consumption of EGS to promote a better life and mental health [15]. This paper found

that some scholars believed that EGS was similar to playing computer games in the

traditional sense, which was a misunderstanding between the concepts of computer

games and EGS. As an emerging industry evolved after the development of computer

games and internet technology, the organization and standardization of EGS were

essential features that distinguished it from traditional computer games. Compared

with traditional computer games, EGS events with organizational management could

exercise and improve participants' thinking and reaction, limb coordination, willpower,

and team cohesion. As the commercial value and social influence of EGS increased, a

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mainstream EGS cultural complex was formed based on the core elements of EGS

events and EGS communities. Some scholars found that for EGS players, a small

proportion of players experienced gaming addiction, with a larger proportion exhibiting

issues of self-esteem, performance, family conflict, sleep, and physical health [16].

In summary, a comprehensive literature review of EGS found that existing research

on EGS was distributed in the fields of sport, business, health, technology, and media,

but the disciplinary results showed a certain fragmentation [17]. Most scholars only

focused on the traditional related fields of EGS, lacking consideration for combining

EGS with other disciplines [18]. There was a considerable research gap in the

direction of the spatial development of the EGS industry. The only existing studies

were the progression of EGS diffusion in the center to the surrounding urban network,

the factors that need to be considered in urban EGS organization, and the business

opportunities created by EGS facilities organization, indicating that there were almost

no studies on the spatial development of EGS industry [19,20]. Therefore, this paper

discerned the unclear status of the spatial development of EGS industries through an

interpretive empirical research approach. The main town area of Wuhan in Hubei

Province, China, was used as the case study area. The period from 2006 to 2022 was

used as the time interval for this study. The study focused on the regional

development of the EGS industry and explored the spatial evolution, causation, and

suggestion of the EGS industry. The study results were important for grasping the

spatial pattern and evolutionary trend of the EGS industry in the main town area of

Wuhan, which was conducive to optimizing the future spatial development of Wuhan's

EGS industry as a representative city in central China.

2. METHODOLOGY

2.1. DESCRIPTION OF THE STUDY AREA

Wuhan, Hubei Province, China, had 13 administrative districts, with a permanent

resident population of 12,326,500 at the end of 2020, according to the 7th National

Census of China. The main town area of Wuhan included the seven administrative

districts of Jianghan, Jiangan, Qiaokou, Qingshan, Hanyang, Wuchang, and

Hongshan (Figure 1). As a mega-city in China, a central city in the central region of

China, and the center of the EGS industry in central China, Wuhan had a particular

influence on the world.

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Figure 1. Wuhan Main Town Area Location Map, China

To a certain extent, spatial clustering of industry tended to occur in regions where

the division of labor and specialization was more sophisticated. The EGS industry

relied on the foundations of the cultural, sports, digital information, and technology

industries. By linking its production factors and demand conditions, new industrial

chains could be formed to promote the region’s economic development. As the core

city in central China, Wuhan was a cluster of EGS developing companies upstream,

EGS operation companies midstream, and EGS organization companies downstream

of the industry chain. Examples included Wuhan eStar Gaming and Wuhan Douyu

Network Technology Co. Ltd. (listed on the NASDAQ exchange under the ticker

symbol "DOUYU"). Due to the urban development structure of Wuhan, the main town

area of Wuhan was much smaller than the other distant town areas, but it was more

representative of Wuhan's main characteristics in terms of population density,

economic activity, infrastructure, and so on. Therefore, as a city in central China with

the most comprehensive industry chain, using the main town area of Wuhan as the

case study area to discuss the spatial development of the EGS industry was

representative and typical for exploring the trend of the EGS industry in China.

2.2. DATA COLLECTION

As the Chinese officially recorded a company credit agency, the Tianyancha system

was one of China's leading business inquiry platforms (www.tianyancha.com). On 10

May 2019, Tianyancha was awarded Enterprise Credit Business Operation

Qualification License by the People's Bank of China (PBC). Tianyancha system

included information on hundreds of millions in social entity companies (including

companies, institutions, foundations, schools, law firms, etc.) in China, with more than

300 dimensions of information automatically updated, such as listing information,

corporate background, corporate development, judicial risk, operational risk, business

status, intellectual property rights, etc. This paper used the data of EGS business

companies as representative data of the development of the EGS industry and carried

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out a query based on the Tianyancha system to quantify and classify the collation of

EGS companies. The specific search procedure was as follows.

The search engine based on the Tianyancha query platform was searched for all

aspects of the following keywords relating to the business of EGS companies. As of

2022, these included eSports, electronic games, eSports tournaments, eSports clubs,

eSports media, eSports news, eSports production, eSports host, eSports community,

eSports live stream, eSports training, eSports broker, eSports internet cafes, eSports

startup, eSports matchmaking, eSports platform, eSports equipment, eSports player,

eSports service and other related Keywords.

Tianyancha's data search engine was comprehensive, but some of the information

included may be inaccurate, which resulted in some screened companies not

belonging to the EGS industry. Therefore, the selected EGS companies were

reviewed through manual screening. Through the National Enterprise Credit

Information Publicity System (https://www.gsxt.gov.cn/

), data on the registered

address, date of registration, registered capital, type of company, scope of business,

and registration status of the above-mentioned EGS companies were collected. For

the authenticity and validity of the data source, anomalous companies with unclear

registered addresses, current business status showing cancellation, and revoked

business licenses were removed. The resulting EGS industry data for the main town

area of Wuhan showed that there were 4 EGS companies as of 2006, 12 EGS

companies as of 2010, 27 EGS companies as of 2014, 63 EGS companies as of

2018, and 114 EGS companies as of 2022.

2.3. DESIGN OF THE STUDY

Through an overview of important historical events in the development of EGS, this

paper sorted out the important historical progressions affecting the development of

EGS in China (Table 1). It concluded that EGS as a controversial emerging industry

was developing in a positive direction through continuous regulation and refinement

by various sectors [21]. Based on a comprehensive analysis of EGS events, this

paper considered that the longitudinal period from 2006 to 2022 was an essential

guideline and reference value for evaluating the development status of the Chinese

EGS industry. Therefore, this paper took the year 2006 as the beginning of the study

("General Administration of Sports of China first issued series of normative documents

for the EGS industry") and established the period from 2006 to 2022 as the study's

time interval. Based on the key historical events affecting EGS in China during the

period, four-time intervals were delineated: 2006-2010, 2010-2014, 2014-2018, and

2018-2022. The spatial distribution characteristic, spatial evolution trends, and spatial

forecasts of the high-capital areas in Wuhan's main town area were analyzed

according to the four historical development stages of the Chinese EGS industry. The

research objective was to explore the causation of spatial evolution and make

recommendations for the development of the EGS industry in the main town area of

Wuhan.

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Table 1. Key Events Affecting the Development of EGS in China (2003-2022)

Note: Compiled by the author from a variety of open-source information.

The spatial distribution characteristic was used to determine EGS companies

based on temporal cross-sectional data for the main town area of Wuhan in 2006,

2010, 2014, 2018, and 2022. The study used Average Nearest Neighbour (ANN)

analysis, which emphasized closer spatial connectivity of near objects than distant

objects. The spatial distribution of point elements of EGS companies in the main town

area of Wuhan was used to measure the mutual proximity and distribution

characteristics in geographic areas. The Average Nearest Neighbour (ANN) ratio was

calculated as the observed average distance divided by the expected average

distance, which was used to measure the distribution of point elements in geographic

Year Key Events on the Development of EGS in China

2003

For the first time, EGS officially became the 99th sport recognised by the General

Administration of Sports of China (GASC).

2004

The National Radio and Television Administration of China (NRTAC) issued notices

prohibiting the broadcasting of EGS programs.

2006

The General Administration of Sports of China (GASC) issued a series of policies for

the first time, such as "National E-Sports Competition Management Measures", to

gradually establish an effective EGS management regulation system.

2008

The General Administration of Sports of China (GASC) redefined EGS as the 78th

sport for the first time.

2009 The World Cyber Games (WCG) Final was held in Chengdu, China.

2011

China Central Television (CCTV) sports channel broadcasted the EGS specials

program for the first time, and the World Cyber Games (WCG) had officially held in

Kunshan, China.

2012 EGS had been nominated for the Tokyo 2020 Olympic Games.

2013

For the first time, the General Administration of Sports of China (GASC) set up a 17-

member national team of EGS to compete in the 4th Asian Indoor and Budo Games.

2014

The "Sports on Earth" program of China Central Television (CCTV) broadcasted a

documentary on the League of Legends project of EGS.

2016

For the first time, the Ministry of Education of China (MEC) added "E-Sports and

Management" to the "Catalogue of Specialisation in Higher Vocational Education of

General Higher Education Schools".

2017

The Olympic Council of Asia announced the inclusion of EGS as an official

competition. In addition, the International Olympic Committee announced at its sixth

summit in Switzerland that the EGS competition would be considered a sporting

event.

2018

The 2018 Asian Games in Jakarta included EGS as a performance event. The same

year, the Chinese government issued the "Measures for the Registration of E-Sports

Athletes in Sichuan Province" to officially implement the EGS athletes' registration

system.

2019

For the first time, the Ministry of Human Resources and Social Security of China

(MHRSSC) issued a public notice for new occupations, including EGS athletes and

EGS operators. In the same year, EGS was officially listed as a sporting competition

after the fourth executive meeting of the National Bureau of Statistics of China

(NBSC).

2020

For the first time, the Olympic Council of Asia announced the EGS program as an

official event of the Asian Games.

2022

For the first time, EGS was an official event at the 19th Asian Games in Hangzhou,

China, and was recorded in the national medal table.

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areas. The ratio of ANN less than 1 indicated that the distribution was a cluster,

greater than 1 indicated that the distribution was discrete, and equal to 1 indicated

that the distribution was random [22].

The spatial evolution trend was simulated using Kernel Density Estimation (KDE)

analysis based on data from four-time intervals, 2006-2010, 2010-2014, 2014-2018,

and 2018-2022. Kernel Density Estimation (KDE) assumed that within a certain spatial

range, a certain object could occur at any geographical location, but the probability of

occurrence differed at each spatial location [23]. The object was considered to happen

more frequently if it occurred more often in the spatial range and less frequently if not.

The simulation results provided a graph that showed the spatial density change of the

EGS company number. Based on the crest and trough in the spatial density graph of

EGS companies, the spatial degree of clustering and the evolution trend of EGS

companies were recognized from 2006 to 2022.

The spatial forecast was based on the location and number of spatially distributed

EGS companies in 2022 and discriminated the high-capital areas of EGS using the

registered capital of EGS companies as a weighted variable. The method used to

discriminate high-capital areas of EGS companies was the Ordinary Kriging (OK) with

spatial interpolation, which was an approach to optimally estimate unknown points

based on variable data related to known point elements within the study area by the

semivariogram model [24]. The aim was to forecast the high-capital distribution in the

main town area of Wuhan and to make recommendations for the future spatial

development of the EGS industry.

3. RESULTS AND DISCUSSIONS

3.1. SPATIAL EVOLUTION OF THE EGS INDUSTRY

3.1.1. SPATIAL DISTRIBUTION CHARACTERISTICS OF

THE EGS INDUSTRY

The geographical location of EGS companies was abstracted as spatial point

element data, and the results of its spatial distribution characteristics were

discriminated by the Average Nearest Neighbor Ratio (R). R was calculated through

the observed average distance (the actual EGS company distribution) divided by the

expected average distance (the assumed random EGS company distribution) [25].

The calculation formulas were as follows.

(1)

(2)

∑n

i=1

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(3)

In the above formula (1), the observed average distance was the average distance

between the EGS company's point and the centroid of its nearest neighbor point,

defined as . The expected average distance was the average distance in the

random distribution of each EGS company's point, defined as . Average Nearest

Neighbor Ratio was defined as R. In the above formula (2), was the distance

between EGS company's point and each other EGS company's point. was the

number of EGS company's points within the study area (the main town area of

Wuhan in China). was the observed average distance of the EGS company's

point. In the above formula (3), was the number of EGS company's point within the

study area (the main town area of Wuhan in China). was the size of the study area

(the main town area of Wuhan in China). was the expected average distance of

EGS company's point.

The distribution of EGS companies for five-time sections in 2006, 2010, 2014,

2018, and 2022 were measured by performing Average Nearest Neighbor (ANN)

analysis in the ArcGIS software platform’s Spatial Statistics tool (Table 2). The

distribution of EGS companies in 2006 showed a very significant discrete trend, with

R=2.440>1. The large R might be because the number of EGS companies was too

less and caused the difference between the observed average distance and the

expected average distance being too strong. The distribution of EGS companies in

2010 had observed an average distance of 2464.319m and an expected average

distance of 2286.432m with R=1.078. However, P=0.606>0.05 indicated that the null

hypothesis was rejected and the distribution pattern lacked evidence of statistical

significance (the null hypothesis specified that the spatial elements were randomly

distributed states). The number of EGS companies increased to twenty-seven in

2014, with R=0.789<1, indicating that the distribution of EGS companies in the main

town area of Wuhan had gradually varied from discrete to cluster distribution. Until

2018 and 2022, R kept decreasing to 0.666 and 0.661, indicating a more obvious

clustering of EGS companies. Moreover, the expected average distance of 114 EGS

companies in 2022 was 1174.579m, and the actual observed average distance was

only 776.757m. This indicated that the distance between the closest elements had

been relatively small, and the aggregation dynamic of EGS industries was high.

Therefore, the results indicated that the EGS industry distribution in the main town

area of Wuhan as a whole exhibited a process from discrete to cluster distribution

between 2006 to 2022, and the degree of aggregation continued to deepen in recent

years.

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Table 2. Average Nearest Neighbor (ANN) Results for the Main Town Area of Wuhan

(2006-2022)

3.1.2. SPATIAL EVOLUTION TRENDS OF THE EGS

INDUSTRY

Kernel Density Estimation (KDE) estimated probability density values based on the

distance between the element to be estimated and the sample element. Using the

spatial property of the data sample to explore its spatial evolution trend, helped reveal

the spatial concentration of the EGS industry [26]. The calculation formulas were as

follows.

(4)

In the above formula (4), was the estimated density function at spatial location

. was the number of EGS companies in the main town area of Wuhan. was the

bandwidth that controlled the degree of smoothing and the range of effect for the

kernel function. was the kernel function for the spatial weights. was the

distance between data sites and .

Kernel Density Estimation (KDE) analysis was performed in the ArcGIS software

platform's Spatial Analyst tool to reveal the spatial concentration and trend among

EGS companies within the main town area of Wuhan for 2006, 2010, 2014, 2018, and

2022. In addition, based on the variation of the EGS company numbers from 2006 to

2022, this paper found that the number of EGS industries in the main town area of

Wuhan had been growing in a developmental trend, but there were discrepancies in

the growth rate of the number in different periods. There was a 200% increase from

2006 to 2010 (8 additional EGS companies), a 125% increase from 2010 to 2014 (15

additional EGS companies), a 133% increase from 2014 to 2018 (36 additional EGS

companies) and an 81% increase from 2018 to 2022 (51 additional EGS companies).

In terms of the spatial evolution of the EGS industry from 2006 to 2010, the number

of EGS companies in the main town area of Wuhan was not significantly increased

Year

Number of

companies

/individual

Z-Score P-Value

Observed

Average

Distance/m

Expected

Average

Distance/m

Average

Nearest

Neighbor

Ratio (R)

Distribution

Characteristic

2006 4 5,508 0,000 7814,481 3203,248 2,440

Discrete

Distribution

2010 12 0,516 0,606 2464,319 2286,432 1,078

Insignificant

Distribution

2014 27 -2,097 0,036 1761,916 2232,881 0,789

Cluster

Distribution

2018 63 -5,069 0,000 1028,692 1544,212 0,666

Cluster

Distribution

2022 114 -6,918 0,000 776,757 1174,579 0,661

Cluster

Distribution

(x) =

∑

i=1

(x−x

)

F(x)

x−xi

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but initially formed a spatial distribution kernel (Figure 2). The maximum kernel density

value increased from 449.99 to 1545.92. This indicated that the double core density

areas of Hongshan and Jiangan had already taken shape and showed a certain

aggregation trend phenomenon.

Figure 2. Kernel Density Estimation (KDE) Results for the Main Town Area of Wuhan

(2006-2010)

In terms of the spatial evolution of the EGS industry from 2010 to 2014, the growing

number of EGS companies led to an increasing spatial aggregation phenomenon,

with EGS companies covering the main town area of Wuhan's seven administrative

districts (Figure 3). The maximum kernel density value increased from 1545.92 to

1910.94, a small increase compared to 2006-2010, reflecting the growing core

concentration in the cluster area but with a slower development rate. The initial dual-

core aggregation of Hongshan and Jiangan gradually evolved into the multi-core

aggregation of Jiangan, Jianghan, Hanyang, and Hongshan.

Figure 3. Kernel Density Estimation (KDE) Results for the Main Town Area of Wuhan

(2010-2014)

In terms of the spatial evolution of the EGS industry from 2014 to 2018, the number

of EGS companies in the main town area of Wuhan showed a faster growth and the

distribution of EGS companies increased, especially the number of EGS companies in

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the southwestern region of Hongshan which grew very significantly (Figure 4). The

maximum kernel density value increased from 1910.94 to 9175.94, which in turn led to

a sharp strengthening of the core clustering trend for the EGS industry in

southwestern Hongshan, with the degree of concentration already surpassing the

cluster area in Jiangan. The trend of EGS industry evolution broke with the multi-core

aggregation of the EGS industry in 2014 and emerged the trend of unipolar grouping

in the Hongshan region.

Figure 4. Kernel Density Estimation (KDE) Results for the Main Town Area of Wuhan

(2014-2018)

In terms of the spatial evolution trend of EGS industries from 2018 to 2022, the

aggregation trend of EGS companies in the main town area of Wuhan spread further,

and not only the trend of unipolar grouping in the Hongshan area continued to

strengthen, but also the trend of group consolidation in Jianghan (Figure 5). The

maximum kernel density value increased from 9175.94 in 2018 to 15921.97, and the

spatial aggregation trend of EGS industries steadily increased. The spatial pattern of

the EGS industry presented the core grouping of Hongshan and the ribbon grouping

of Jiangan and Jianghan.

Figure 5. Kernel Density Estimation (KDE) Results for the Main Town Area of Wuhan

(2014-2018)

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Therefore, as the number of EGS companies in the main town area of Wuhan

continued to increase, the degree of spatial core aggregation of the EGS industry

grew year by year, and the core aggregation areas transformed from the dual-core

cluster to the multi-core cluster. The multi-core cluster of the EGS industry kept

spreading to the surrounding areas based on the aggregation of each center, which in

turn led to the formation of larger-scale monopole grouping and ribbon grouping in the

adjacent core aggregation areas as the cluster spread. By exploring the growth and

spatial evolution of EGS companies in each period, this paper suggested that the

main town area of Wuhan's EGS industry experienced the early start phase

(2006-2010), the rapid development phase (2010-2014), the aggregate explosion

phase (2014-2018) and the cluster integration phase (2018-2022) between 2006 to

2022.

3.1.3. SPATIAL FORECAST OF THE HIGH-CAPITAL EGS

INDUSTRY

Kriging interpolation was known as the spatially local interpolation technique, which

enabled linear optimal unbiased estimation of data at unknown sampling sites in the

area [27]. Ordinary Kriging (OK) was a univariate model with relatively simple

operation compared to Regression Kriging (RK) and Universal Kriging (UK), as well as

low error and good spatial prediction results [28]. Therefore, this paper adopted the

Ordinary Kriging (OK) for spatial interpolation in predicting the spatial dynamic of the

high-capital EGS industry. The calculation formulas were as follows.

(5)

In the above formula (5), was the estimated value of the attribute at the

unknown EGS company's location . was the weight, which was used to weight

the attribute value of the known EGS company's points. was the attribute value

of the point in the set of known EGS company points.

The main town area of Wuhan's EGS industry had been improving recently in terms

of the supporting chain of industries, which to a certain extent demonstrated the

unique development opportunities of the EGS industry in the future. Therefore, this

paper predicted the capital hotspots for the main town area of Wuhan's EGS industry

in the future by weighing the capital elements of companies. Ordinary Kriging (OK)

analysis was performed in the ArcGIS software platform's Spatial Analyst tool based

on the point data of EGS companies in 2022, the spatial forecast for the high-capital

areas of the EGS industry in the main town area of Wuhan was carried out by

weighting the registered capital of companies (Figure 6). Parent companies within the

spatial distribution hotspots might spin off its industries chain to continuously increase

their competitiveness and asset value [29]. Therefore, the aggregation of high-capital

EGS companies in the hotspots signified the opportunity for more competitive EGS

companies to emerge in the future. The spatial prediction results showed that high-

′

(x0)=

∑

i=1

λi⋅Z(xi

)

Z′

(x0)

λi

Z(xi)

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capital EGS companies in the main town area of Wuhan were distributed around the

Optics Valley vice town area in the southeast of Hongshan. This indicated that the

Optics Valley vice town area in the southeast of Hongshan had the opportunity for

more competitive EGS companies to emerge in the future and formed a larger EGS

industry group with other EGS companies clustering in the region.

Figure 6. Capital-Weighted Kriging Interpolation Results for the Main Town Area of Wuhan in

2022

3.2. CAUSATION AND SUGGESTIONS FOR THE EGS

INDUSTRY

3.2.1. CAUSATION FOR SPATIAL EVOLUTION OF THE

EGS INDUSTRY

Based on the analysis of the spatial evolution trend of EGS companies in the main

town area of Wuhan, this paper found that the aggregation characteristics of the EGS

industry were significantly strengthened over time from 2006 to 2022. Moreover, there

was the possibility of further polarisation in the Optics Valley vice town area in the

southern part of Wuhan Hongshan in the future. The spatial evolution of the EGS

industry in the main town area of Wuhan was considered to be influenced by three

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main factors: industrial economic agglomeration, industrial chain derivation, and

industrial policy environment.

As a concentration of economic activities in geographical and spatial distribution,

industrial economic agglomeration was mainly manifested by the agglomeration of

similar or complementary industries in adjacent geographical locations. Further, it

formed industrial economic groups and interdependent regional networks.

Agglomeration economies played a guiding and centripetal role in the formation of the

EGS industry group. As new companies were attracted to the city's existing industrial

resources, they might congregate in industrial economic agglomerations nearby

potential customers or potential suppliers, and draw resources from neighboring

companies [30]. In addition, excellent agglomerations could better incubate and

nurture synergies between each EGS company. The Average Nearest Neighbour

(ANN) ratio of EGS companies decreased from 2.440 to 0.661, and the maximum

kernel density value of EGS companies increased from 449.99 to 15921.97 between

2006 to 2022. Therefore, whether as a whole or locally, the trend of aggregation in the

distribution of EGS companies in Wuhan strengthened over time, contributing to the

development of the EGS industry in the direction of agglomeration and cooperation.

Inherited spin-offs in industry chain derivation arose from the spillover of new

companies from the parent company’s business. In the process of inherited spin-offs,

the parent company facilitated the transfer of its resources to the new company in a

tolerant manner for the transfer of assets, which was more competitive and had a

higher survival rate than other inexperienced start-ups [31]. Cooperative spin-offs in

the industry chain derivation were achieved through cooperation between companies

in the upstream, midstream, and downstream of the industries chain, bringing into

play the absolute capabilities of each company in its respective strengths and

achieving win-win cooperation in the industries chain further. The main town area of

Wuhan's EGS companies might already have a well-established chain of industries in

the Optics Valley vice town area of southern Hongshan. Compared to other EGS

industry aggregations in Wuhan, the hierarchy of the EGS industry in Hongshan was

much stronger than in other regions with polarising effects. In addition, the Optics

Valley vice town area had hosted numerous international EGS events, and its "EGS

city card" confirmed the perfection of the industry chain and supporting facilities. For

example, it hosted the China Youth E-sports Competition (CYEC), the Global

Optoelectronic Information Engineer Contest, and so on, which were major electronic

information competitions.

The industrial policy environment was one of the factors directly influencing the

aggregation of EGS industry, political, commercial, and social advantages had

become a focus of attention for those EGS inside and outside sectors with active use

of media tools to drive investment [32]. The industrial policy environment consisted of

direct government policies contributing to forming and developing industries, which

were effective and quick to implement. The positive business philosophy of

companies and inclusive city culture values would more easily create a business

environment conducive to the development of companies. Furthermore, the

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government proposed establishing cultural confidence in industrial development and

innovating the business promotion mode of EGS industries through the combination of

government policy promotion and EGS competitions [33]. This paper argued that the

greater role of government industrial policy in the aggregation of the EGS industry

was due to the tax breaks for micro & small companies and the technology incubation

incentives enacted in the Optics Valley vice town area, which greatly supported the

survival of emerging EGS companies.

3.2.2. SUGGESTION FOR FUTURE DEVELOPMENT OF

THE EGS INDUSTRY

From the results of the spatial evolution of EGS, the spatial evolution trend of the

EGS industry was not only influenced by the main factors of industrial economic

agglomeration, industrial chain derivation, and industrial policy environment but also

related to other factors such as land and talent market, adjacent infrastructure

support, city industrial promotion, and globalization dissemination. Compared with the

traditional sports industry, the EGS industry combined sports competition, digital

information technology, and audio-visual arts into a whole, with strong information

technological characteristics [34]. Therefore, by referring to the characteristics of EGS

companies, which were more inclined towards emerging technology companies, this

paper focused on the following three aspects to recommend the future development of

the EGS industry.

1. The government's industrial policy had an important guiding role in establishing

industrial chains, forming industrial aggregations, and improving cooperation in

spatial groups for companies. Regional support policies, industrial cultural

integration, and inter-country differences led to significant regional imbalances

in the contribution of EGS industries to economic development, but economic

connections between regional EGS companies had strengthened slightly in

recent years [35]. Especially after the COVID-19 pandemic, government

strategic plans and investments could be considered for the strategic

development of EGS because of the important impact on the economy of the

destination [36]. By guiding the formation of a conglomerate of EGS

companies, government industrial policies could easily create a good brand

appeal to attract consumers and develop high technology [37]. In addition,

reasonable and favorable tax breaks for companies and a positive business

environment would attract new EGS companies to locate. The location of new

companies was not only influenced by the source market but also by whether

the costs and benefits of operating space could be maximized under the

support policies of industries.

High-quality talent teams played a vital role in the development of the EGS

industry as carriers with corporate knowledge and skills. Typically, talent teams

performed better in collaborative management than in self-management,

reflecting that high-quality talent teams were better for the development of

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companies and demonstrated team pride and cohesiveness [38]. The EGS

industry involved in new Internet businesses such as sports, digital information

technology, and new media communications required a more versatile mix of

technology professionals than traditional industries. Moreover, due to various

technological and commercial dependencies, EGS was in a precarious state

compared to earlier traditional sports, as the EGS industry lacked a large

number of human resources to formalize and institutionalize its industrial

environment [39]. In addition, whether it was upstream, midstream, or

downstream of the EGS industry chain, talented teams of professionals could

reduce operational costs for companies, integrate core resources, and facilitate

cooperation between companies to form excellent city EGS industry cards.

Local promotion and international communication were critical drivers in

stimulating the development of the EGS industry. As a type of sporting event,

initiatives such as audience group attraction, obtaining sponsorship

endorsements [40], and added value of derivative products had been important

thrusts for the development of the EGS industry. In the past, the promotion and

publicity of the EGS industry relied heavily on the unique enthusiasm for EGS

among the youth population and the spread of various EGS events. In addition,

the level of professional players in the EGS industry and the attractiveness of

event broadcasts greatly impacted the promotion and dissemination of the

EGS industry [41]. Many companies' brands used EGS as a medium for

communication and interaction with the customer base to consolidate the

space for dialogue and communication between its respective brand and the

public [42]. Because the EGS industry was more commercial than other sports

industries, its promotion and audience feedback were more efficient and

quicker with the aid of technological communication media.

4. CONCLUSIONS

4.1. CONCLUSION

In terms of the spatial evolution trend of the EGS industry, the main town area of

Wuhan had a strengthening trend of EGS industry aggregation from 2006 to 2022.

The overall spatial distribution of the EGS industry showed a process from discrete to

cluster distribution, and the degree of aggregation tended to deepen in recent years.

The local kernel density value of the EGS industry increased year by year, and the

aggregation pattern transformed from dual-core to multi-core aggregation. Moreover,

as the aggregation cores spread around based on central clusters, the adjacent

aggregation cores in Wuhan Hongshan formed a larger EGS industrial group as it

spread and merged. The spatial interpolation results based on the weighted number

of companies' registered capital predicted the future distribution of high-capital EGS

companies in the main town area of Wuhan to be in the Optics Valley vice town area

of southeastern Hongshan. This indicated that the Optics Valley vice town area might

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have the opportunity to emerge more competitive high-capital EGS companies in the

future, which could lead to a larger scale EGS industry group.

In terms of the spatial development stages of the EGS industry, the spatial

evolution of the EGS industry in the main town area of Wuhan could be divided into

four phases. (1) In the early start phase from 2006 to 2010, the number of EGS

companies in the main town area of Wuhan increased insignificantly, but a core

concentration area was initially formed around higher education institutions and

business districts. (2) In the rapid development phase from 2010 to 2014, the EGS

industry aggregation core gradually developed from the dual-core aggregation of

Hongshan and Jiangan to the multi-core aggregation of Jiangan, Jianghan, Hanyang,

and Hongshan. (3) In the aggregate explosion phase from 2014 to 2018, along with

the growth in the number of EGS companies in the southern region of Hongshan, the

kernel density value of EGS companies in the main town area of Wuhan experienced

explosive growth. This led to a dramatic increase in the aggregation trend of the EGS

industry in Hongshan, and the intensity of aggregation surpassed that of the Jiangan

agglomeration. (4) In the cluster integration phase from 2018 to 2022, the EGS

industry aggregation in the main town area of Wuhan further strengthened and

spread, showing the trend of the aggregation group of Hongshan, the belt group of

Jiangan and Jianghan.

In terms of the causal factors of the spatial evolution for the EGS industry, the

spatial distribution trend of the EGS industry in the main town area of Wuhan was not

only influenced by the main factors of industrial economic agglomeration, industrial

chain derivation, and industrial policy environment but also by the other factors of land

and talent market, adjacent infrastructure support, city industrial promotion, and

globalization dissemination. Compared to traditional industries, the EGS industry

combined sports, information technology, and audio-visual arts and had the needs

and characteristics of emerging technology companies. Therefore, the following three

recommendations were suggested for the future spatial development of EGS

companies. (1) The government's industrial policy played an important role in guiding

companies to establish industrial chains, form industrial agglomeration, and improve

spatial group cooperation. Reasonable and favorable tax breaks for companies and a

positive business environment would be more attractive to new EGS companies. (2)

High-quality talent teams, as carriers of corporate knowledge and technology, could

reduce operating costs for companies, integrate core resources and promote inter-

company cooperation to form excellent city cards for EGS industries. (3) Local

promotion and international communication were critical drivers for the development

of the EGS industry, providing an important impetus to the EGS industry development

through audience attraction, sponsorship endorsement, and added value of derivative

products.

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4.2. LIMITATION AND PROSPECT

This paper focused on Wuhan, the center city of Hubei Province in China. Although

Wuhan was a crucial city in central China regarding study scope, there needed to be

more consideration of other central Chinese cities beyond Wuhan, such as Changsha

and Zhengzhou. In addition, Tianyecha, as China's largest commercial search

platform, although it had the widest business coverage of commercial information,

might be a little data missing covered by its search engine. It could be multi-party

verification in the future by combining with other commercial search platforms such as

the Aiqicha platform and the Enterprise Inspection platform. Therefore, this paper

hopefully triggered more other researchers on the spatial development of the EGS

industry.

5. DATA AVAILABILITY

All the data for this study is available upon request to the author.

6. CONFLICT OF INTEREST

The authors declare that the research has no financial or personal relationships

with other people or organizations that can interfere with it.

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