Tencent beats profit expectations with high score from mobile games

May 16, 2018
Industry News
Content Provided By:

Iris Deng
[email protected]
Celia Chen
[email protected]

The Shenzhen-based company has been on a shopping spree, expanding into different sectors including e-commerce and automobiles

Tencent Holdings, one of China’s biggest internet companies, pulled a first-quarter surprise on Wednesday, announcing a 61 per cent increase in profits on a strong contribution from its mobile games and online advertising businesses.

China’s largest social network operator and video games company reported net income of 23.29 billion yuan (US$3.65 billion) in the quarter ended March 31, beating average market expectations by about 30 per cent. Revenue reached 73.53 billion yuan, up 48 per cent from the same time last year, driven by online advertising, online games and messaging services. The Hong Kong-listed company reported an operating margin of 42 per cent, up 3 percentage points from the same period a year ago.

Its mobile game business reported a 68 per cent increase in revenue year-on-year to 21.7 billion yuan, driven by its blockbuster title Honour of Kings, which remained the highest-grossing smartphone game in China’s iOS App Store, and a newly-released mobile game version of QQ Speed, which has a strong personal computer (PC) player base. PC games remained flat with 14.1 billion yuan in revenue compared to same period a year ago.

Tencent, however, expects its PC game business to benefit from the roll-out of the desktop versions of popular battle royale titles Fortnite and PlayerUnknown's Battlegrounds, which is currently free to play in China.

Company president Martin Lau Chi-ping said in a conference call with analysts on Wednesday that the multiplayer online game PlayerUnknown's Battlegrounds ”will negatively impact our financials in the short term because we have not yet monetised the games in the China market”. He said the game will likely provide “substantial revenue opportunity once we begin monetisation”.

Last month, Tencent partnered with US developer Epic Games to launch Fortnite in China. The mobile version of Fortnite was an instant hit in the US market after its March launch, becoming the highest-grossing iOS game there. Continue Reading

The South China Morning Post is a leading news media company that has reported on China and Asia for more than a century with global impact. Founded in 1903, SCMP’s headquarters are in Hong Kong, where it is the city’s newspaper of record. Our teams span Asia and the United States, working together to connect with news consumers around the world. We are committed to informing and inspiring through journalism of the highest standards. 

Against the backdrop of shifting discovery and consumption behaviour, SCMP reaches users across distributed media platforms such as SCMP.com, smartphone and tablet apps, social media and messaging platforms, as well as our flagship newspaper. ​In addition to the South China Morning Post broadsheet, we also publish the Sunday Morning PostPost MagazineSTYLE and This Week In Asia​​SCMP.com, attracts millions of readers and generates tens of millions of page views per month, providing a perfect channel for our advertisers to reach a worldwide audience.

For further information, please contact us