China’s Tencent Holdings Limited reported a return to revenue growth in the first quarter, as it recovered from Covid-related disruptions and a regulatory freeze on game licenses the year before.
On Wednesday, the world’s largest video game company and operator of the WeChat messaging platform reported an 11% increase in revenue, exceeding analysts’ expectations.
Revenue was 149.98 billion yuan ($21.70 billion) for the three months ended March 31, exceeding the 146.09 billion yuan forecast by 17 analysts polled by Refinitiv.
Net profit rose 11 percent to 25.83 billion yuan, below the 29.67 billion yuan expected by analysts.
Revenue declined last year
Tencent recorded its first annual drop in revenue last year, hit hard by the now-abandoned anti-COVID policy in China as well as a months-long freeze on game licenses by regulators that prevented it from releasing new games. But it is likely heading for a rebound this year, after the government resumed licensing approvals last year. The company unveiled a long line of games on Monday, including seven that are ready to stream online this summer.
Tencent said in a statement: “During the first quarter of 2023, we achieved strong revenue growth as our payment volumes benefited from and facilitated the recovery of domestic consumption, our game revenue improved and our advertising revenue maintained rapid growth.”
Record revenue for games
Two of Tencent’s most popular games, Honor of Kings and CrossFire, generated record revenue thanks to added new features and promotions, while newly launched games also recorded strong sales and user growth.
Domestic game revenue increased 6 percent to 35.1 billion yuan, while international game revenue rose 25 percent to 13.2 billion yuan.
Tencent also saw online advertising revenue rise 17% to 21 billion yuan. Financial technology and business services revenue grew 14 percent to 48.7 billion yuan, as the company continued to expand in these areas. (Reuters)
