Tencent Profits Growth at Standstill After Regulatory Change Dents Games Sector At the Games Market Ten cent Profit Profit - After Ten Cent Profit
Tencent, the China's games, video and social media giant, saw its quarterly profits slowed to a halt in three months to September as it adjusted to the regulatory crackdowns that mainly crimp its mainland Chinese games business.
The company said Wednesday that the company was holding a regulatory filing. Revenues from the period grew 13% to RMB142 billion ($22 billion) with net profit attributable to shareholders down 2% to the RTB31.8 billion (4.9 billion).
In the first nine months of the year, revenues rose 19% to RMB415 billion and profits rose 29% to more than 130 billion.
The company said the Internet industry, including the Chinese games industry and certain advertiser categories, adapted to new regulatory and macroeconomic developments. We are proactively adopting new norm-and-moose conditions that will help the industry to gain sustainable development.
In order to protect the privacy of the public, the government has made a massive impact on the private sector. In financial services, regulators also want to get centralized payments from rival companies.
As a result, the regulators of the Entertainment sector periodically delayed the commercialization of certain titles, and in August, they shifted against game addiction among young users, limiting play to three hours per week for minors.
Tencent and other corporations have had to adjust their business operations, accept more competition and reduce sharing of consumer data between their different subsidiaries.
Tencent divides its games industry commentary into domestic (i.e. mainland China) and overseas (including Hong Kong and Macau).
In the quarter of July to September 2021, the number of people who spent the rest of their money on Tencents games dropped from 4.8% to 1.1%.
Tencent announced they would cease the popular Fortnite title in the Chinese market despite regulatory hurdles. Ten cent is a major investor in Epic and was the local partner for fortit.
The company said Wednesday that it is strengthening global IP portfolio by in-house IP development and partnerships with renowned IP owners.
Domestic games revenues grew to RMB333.6 billion by 5% from the games Honour of Kings and Call of Duty Mobile versus Moonlight Blade Mobile. International games revenue jumped 20 percent to Rs11.3 billion or 28% in constant currency terms.
Tencent Music, which has a separate share listing reported on Tuesday soaring the number of subscriptions to 71 million at the end of September.
In the third quarter, Tencent Video China's SVOD market leader was driven by content such as Crime Crackdown and You Are My Glory the first and second most watched drama series viewed by video viewers across all online platforms in China.
Tencents mighty Weixin/ WeChat social media unit grew user numbers from 44% to 1,26 billion.
Tencent completed the takeover of the New York-listed Sougu search engine business, where it was previously a significant minority investor. No impact on profits, Ten cent said that its operation would have been 5%.
Tencents Hong Kong-traded shares rose by more than 4% on Wednesday before the announcement of the results. At HK$483 per share, Ten cent has a market capitalization of 4,64 trillion or 595 billion.