×

Tencent Announces Restructure Amid Chinese Regulation Woes

Chinese gaming giant Tencent will undergo its first restructuring in six years, it announced on Sunday. The move comes after a recent crackdown on online games by the Chinese government caused a drop in Tencent’s market value.

The company said in a statement it will consolidate three content business groups into one unit and create a new group for cloud and smart industries, according to Reuters. It will also set up a technology committee to help strengthen its research and development and it will “further explore the integration of social, content and technology that is more suitable for future trends, and promote the upgrade from consumer internet to industrial internet.”

Tencent’s net profit in the second quarter of fiscal 2018 dropped 22% compared to the first quarter, from RMB23.9 billion to RMB18.6 billion. While smartphone games revenue was up 19% in the second quarter year-on-year, it was down 19% compared to the first quarter of 2018. PC games, meanwhile, were down 5% year-on-year and down 8% compared to the first quarter.

Earlier this year, Chinese regulators ordered Tencent to halt sales of Capcom’s popular “Monster Hunter: World” on its WeGame platform after they received a large number of complaints about the game. Tencent had reportedly pre-sold over one million copies.

Popular on Variety

China’s State Administration of Radio and Television, which oversees the games market in that country, reportedly hasn’t given approval to any new game since the end of March. China’s Ministry of Education also recently called for limits on the number of new online games approved for distribution in the country. It believes increased gaming and internet use is causing higher rates of myopia in minors.

The regulation crackdowns reportedly soured investor sentiment toward Tencent, and other tech stocks in general.

More Gaming

  • Call of Duty The Campaign

    Watch the First Episode of New Call of Duty League Docuseries 'The Campaign' (EXCLUSIVE)

    Even a new league comes with history. That’s one of the takeaways from the first episode of “The Campaign,” which follows the Chicago Huntsmen in the lead-up to Activision Blizzard’s new franchised Call of Duty League. Variety is debuting the first episode exclusively, which details some of the narrative that follows the Huntsmen (based in [...]

  • Vindex - Imax

    Imax Jumps Into Esports in Exclusive Pact With Startup Vindex

    Hold on to your popcorn: An Imax location near you could soon be beaming live competitive video-game action onto its big screens. Imax has inked a partnership with Vindex (vindex.gg), an esports infrastructure startup formed by Major League Gaming co-founders Mike Sepso and Sundance DiGiovanni, under which Vindex will create esports events and experiences exclusively [...]

  • Corinna Kopf

    Corinna Kopf Leaving Twitch to Stream Exclusively on Facebook Gaming

    The battle for gaming creators has cost Amazon’s Twitch another notable streamer: Corinna Kopf, a popular Instagram model, digital influencer and “Fortnite” Twitch streamer with millions of followers, is moving to Facebook Gaming under an exclusive agreement. On Facebook, Kopf’s first stream is scheduled to take place Dec. 30 at 4 p.m. PT at facebook.com/gaming/corinnakopff. [...]

  • Pokemon-Tower-Battle

    Facebook Launches Two Exclusive Pokémon Games

    A pair of Pokémon games is hopping exclusively to Facebook. The social network on Monday launched “Pokémon Tower Battle” and “Pokémon Medallion Battle” — the first time the Pokémon Company is bringing games based on the mini-monster franchise to the Facebook Gaming platform. “Pokémon Tower Battle” is available worldwide while “Pokémon Medallion Battle” is initially [...]

  • Littlstar Ps4 app

    Littlstar Adds Content From Whistle, New Form, Sliver.tv to VR and PlayStation Subscription Service

    UPDATED: A+E Networks-backed video aggregator Littlstar has teamed up with Whistle, New Form, esports network Sliver.tv and others to launch premium content channels for its paying subscribers. The new partnerships will bring esports and other types of short-form content to the PlayStation and VR devices supported by Littlstar. The new partnerships will give Littlstar subscribers [...]

  • Google Stadia Gets Typhoon Studios Game

    Google Buys Typhoon Studios for Its Stadia Cloud Gaming Service

    Google is looking to grow the catalog of its Stadia cloud gaming service: The search giant has acquired Montreal-based game studio Typhon Studios, and will integrate it into its Stadia Games and Entertainment studio. “We’re always looking for people who share our passion and vision for the future of gaming,” said Stadia Games and Entertainment [...]

More From Our Brands

Access exclusive content