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

  • Amazon Adds NBA League Pass to

    Amazon Adds NBA League Pass Live-Streaming Games to Prime Video Channels

    Amazon is bringing pro hoops action to Prime Video Channels: The ecommerce giant now offers NBA League Pass as part of its lineup of 150-plus subscription options for Prime members in the U.S. It’s the first U.S. live-sports subscription service on Prime Video Channels. Prime members can subscribe to NBA League Pass via Prime Video [...]

  • Fifty Shades of Grey

    International Piracy Ring Stole Over 25,000 Movie and TV Digital Files, U.S. Feds Say

    A five-member international hacking crime ring stole more than 25,000 files for Hollywood movies and TV shows and illegally offered hundreds of them for sale online, according to U.S. law enforcement officials. A federal grand jury in L.A. on Wednesday (Dec. 12) indicted five men, identified as residing in the U.K., India, Dubai and Malaysia, [...]

  • Phil Schiller, Apple's senior vice president

    Apple to Update iPhones in China to Avoid Sales Ban

    Apple is pushing out a software update to iPhones in China to address a recent court order obtained by Qualcomm that banned the sale of certain iPhone models in the country. The update will allow the company to continue selling its phones in China, company representatives told Reuters Friday morning. The Fuzhou Intermediate People’s Court [...]

  • Kevin Reilly Variety Cover

    Kevin Reilly Named Content Chief for WarnerMedia Streaming Service

    Kevin Reilly — a veteran television exec who has led programming at NBC, FX, Fox, and most recently Turner Broadcasting — has been tapped to head content strategy for the still-nascent streaming service that WarnerMedia plans to launch next year. Reilly, who has led programming at Turner brands TNT and TBS since 2015, will serve [...]

  • Apple Culver City

    Apple Expects to Have Over 1,000 Employees in Culver City by 2022

    Apple announced plans to boost its L.A. presence, saying it expects to have more than 1,000 employees in Culver City, Calif., over the next three years, including its growing entertainment team. The move is part of the tech giant’s broader initiative to create 20,000 jobs in the U.S. by 2023 and includes a new $1 [...]

  • A Look at Wevr's & Dreamscape

    How Wevr & Dreamscape Immersive Reinvented ‘The Blu’ for Location-Based VR

    When HTC first introduced its Vive virtual reality (VR) headset in April of 2016, “The Blu” quickly became one of the most talked-about launch titles: With its ability to transport viewers onto the deck of a sunken ship, and face-to-face with a giant 80-foot whale, it offered viewers a deeply moving experience of presence and [...]

More From Our Brands

Access exclusive content