Chinese gaming and social media giant Tencent Holdings reported virtually no revenue growth in the first quarter, its worst performance on record, and also missed market estimates as China’s economic slowdown and the freezing of new game licenses weighed on its activity.
Revenue totaled CNY 135.5 billion (approx Rs 1,55,804) in the quarter ended March, compared to CNY 135.3 billion (approx Rs 1,55,655 crore) in the same quarter last year, and below an average estimate of CNY 141 billion (about Rs. 1,62,200 crore) from 16 analysts, according to Refinitiv.
Tencent, which makes much of its money developing games such as Honor of Kings and Call of Duty Mobile, said the company’s profit attributable to shareholders for the quarter also fell 51%. It’s the biggest decline in earnings since the company went public in 2004, according to data from Refinitiv.
The slower pace of growth follows the previous two quarters of slower sales. Tencent – China’s most valuable company – has seen opportunities for expansion curtailed by a regulatory crackdown from Beijing to curb the influence of big internet companies.
The Shenzhen-based tech giant has been impacted by the normalization of user spending on games after a surge over the past two years. Meanwhile, a resurgence of COVID-19 in China has also dampened payment activity.
Last month, Tencent announced it would shut down a service that allowed Chinese gamers to access foreign platforms to play unapproved foreign games, a sign of increased compliance as Chinese regulators examine more close to industry.
The country’s largest social and gaming company said it will update its game speed booster mobile and desktop apps to new versions on May 31 that will only support games running in China. . New versions will no longer allow users to access foreign games.
© Thomson Reuters 2022
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