×
You will be redirected back to your article in seconds

Tencent Profits Up 19% Despite Gaming Industry Woes

Chinese new-media conglomerate Tencent, which has been battered by problems in its games division, unveiled third-quarter results showing a 19% increase of $2.97 billion in non-GAAP net profits, on revenues that were up 24% to $11.7 billion.

Expressed on a GAAP basis, which the company prefers, net profits were up 30% at $3.4 billion (RMB23.4 billion) during the three-month period.

Despite the regulatory problems that Tencent highlighted in its July financial statement, the company said that it currently has 15 games with monetization approval and that it released 10 titles in the quarter.

Online games revenue grew 7% year-on-year and 11% on the previous quarter to hit $2.81 billion (RMB19.5 billion) in the three months between July and September. PC games revenue, at $1.79 billion (RMB12.4 billion), sank by 15% year-on-year and 4% compared with the last quarter.

“For our game business we implemented stringent self-imposed limitations on games-playing by minors, which we believe put the game industry on a healthy and more solid foundation for future development,” said chairman and CEO Pony Ma Huateng.

In July, Tencent revealed that, since spring, Chinese government regulators had largely halted approvals of new game releases in China. Or they were not allowing companies to exploit the paid-for versions of games. That caused Tencent to announce earnings below analysts’ expectations and pointed to the government’s fundamental rethink of the games sector.

In the weeks that followed, that rethink became clearer as government additionally announced limits on games-playing by youngsters. Tencent responded by imposing its own restrictions on games usage and by cutting its games marketing budget.

The company’s shares, which opened the year at HK$417.8, came under increased pressure. The shares have dropped from HK$348.6 at the time of the July announcement to HK$278.1 at the end of trading on the Hong Kong Stock Exchange on Wednesday. The tumble has pushed Tencent out of the elite rank of the world’s 10 largest companies.

The company said that the number of users for its WeChat messaging program reached 1.08 billion, an increase of 11% year-on-year. Revenues from social media were up 15%.

The company reported that its Tencent Video streaming platform now counts 82 million paying subscribers, driven by interest in its “Ruyi’s Royal Love in the Palace” and anime series “Land of Warriors.” Across all of its value-added services, which span video, music and games, subscriptions grew by 23% to 154 million.

“At the end of the quarter we upgraded our organization to help enterprises and various industries to benefit from the new trend of industrial Internet through digitization and technology innovation and to provide customers with better integrated entertainment and social experiences, as well as to unify our advertising sales platforms,” said Ma. “We believe this strategic organizational upgrade will position us well for future long-term growth.”

More Digital

  • Lauren Dolgen Exits as BuzzFeed Studios

    Lauren Dolgen Exits as BuzzFeed Studios Boss After a Year

    Veteran TV producer Lauren Dolgen has departed as head of BuzzFeed Studios after one year in the job. BuzzFeed had hired Dolgen, a longtime MTV producer who worked on shows including “Teen Mom” and “16 and Pregnant,” as head of BuzzFeed Studios to oversee the company’s slate of original content. Based in L.A., she had [...]

  • Snap-Derek-Andersen-Lara-Sweet

    Snap Fills Out Senior Ranks With CFO, HR Chief Appointments

    Snap CEO and co-founder Evan Spiegel has turned in house to fill the company’s CFO and head of human resources positions, completing an overhaul of the Snapchat parent’s executive ranks after a series of high-level departures. The company announced the appointment of Derek Andersen, currently Snap’s VP of finance, as chief financial officer. Andersen will [...]

  • Oculus Quest Gets Netflix App, But

    Oculus Quest Will Have Netflix, but Not Plex or HBO

    Facebook’s new Oculus Quest headset is launching with a number of high-profile gaming titles this Tuesday. Media apps on the other hand will take a bit of backseat, with some key players sitting this latest headset out for the time being. First, the good news for anyone who has pre-ordered the headset: One of the [...]

  • Lester Holt

    Chris Berend Tapped to Oversee NBC News' Digital Efforts

    Chris Berend, an executive who has been overseeing digital video for CNN and helped launch Great Big Story, a streaming-video site aimed at younger audiences, will jump to NBC News to lead its digital efforts. Berend will replace Nick Ascheim, who will move into a new role that is described as “improving digital and product [...]

  • Vogue, Conde Nast Entertainment Make Robert

    Robert Semmer Joins Condé Nast Entertainment & Vogue as Vice President of Video

    Condé Nast Entertainment and Vogue have named former Vice and Fader video executive Robert Semmer as their new vice president of video. Semmer will be based in New York and report to Croi McNamara, senior vice president of programming for Condé Nast Entertainment. “Anna and I are thrilled to welcome Robert to our award-winning video [...]

  • CEO of T-Mobile John Legere (L)

    FCC Chairman Backs T-Mobile, Sprint Merger With New Conditions

    FCC Chairman Ajit Pai gave a thumbs-up to T-Mobile and Sprint’s proposed $26 billion merger, after the companies committed to enhanced 5G buildout commitments and agreed to spin off Sprint’s Boost Mobile. T-Mobile and Sprint first announced their plans to merge in April 2018, looking to combine forces to take on industry leaders AT&T and [...]

More From Our Brands

Access exclusive content