• YuuZoo and AliSports inked deal at an event in Shanghai, China.

YuuZoo and AliSports inked deal at an event in Shanghai, China. (Photo : YuuZoo/Facebook)

Alibaba is making a serious gamble in eSports with the announcement of a multimillion-dollar tournament, dubbed as the World Electronic Sports Games (WESG).

At a press conference held in Shanghai, the Chinese retail giant revealed Wednesday that the event will give off a hefty total jackpot prize of $5.5 million to winners.

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The WESG will be handled by AliSports, the company's arm for e-games. It is a joint venture with Singapore-based firm YuuZoo Corporation, a social commerce platform, who will also operate the E-Sports Clubs Competition Center.

The deal will enable the social networking company to generate new users and gain revenues from e-commerce sales and advertising fees.

"As a new partner to China's largest e-commerce group, we are not only looking to reinforce our position as a leader in China's [eSports] sector, but also to discuss opportunities with Alibaba Group to jointly grow YuuZoo's other China-based businesses, including our gaming business, payment business and social e-commerce business," said YuuZoo chairman Thomas Zilliacus.

AliSports, formed in Sept. 2015, manifests Alibaba's determination to break into China's profitable sports market, which is predicted to hit $813.87 billion by 2025. The country is reportedly home to more than 100 million eSports fans, as well as about 440 million gamers.

For the WESG alone, Alibaba is planning to spew a whopping $15.4 million.

"Sports is a multibillion dollar business in China, with massive growth potential," said Zhang Dazhong, AliSports' CEO. "That is why Alibaba is investing heavily in this vertical. Linking sport and technology enhances the quality of life. That is what we want to do through AliSports."

Kicking off in April, the WESG will host tournaments for a range of eSports titles, including StarCraft 2, Dota 2, Hearthstone and CS:GO.

In addition, about 1,200 eSports events are in the pipeline for the joint venture this year. They will be held across 15 cities in China.