Mobile games are driving revenues and profits at Tencent

Lloyd Doyle
November 15, 2017

Tencent said as well that it recorded quick growth in its digital content and subscription services.

According to games industry analyst at Niko Partners, Daniel Ahmad, the total number of $4.95 billion in gaming revenue is more than Activision Blizzard, EA, Take Two and Ubisoft combined during the same time.

Overall profit was up 69 percent year-on-year and revenue rose by 61 percent thanks to Tencent's games business, which includes both PC and smartphone.

Tencent, Asia's highest-valued technology company, has smashed analyst forecasts for its Q3 2017 after it posted a profit of 18 billion RMB ($2.7 billion) on revenue of 65.2 billion RMB ($9.8 billion).

Its Youtube equivalent, Tencent Video, now has more than 43 million paying subscriptions, making it the video streaming service with the largest subscriber base in China, Tencent said.

"We believe this success reflects our increasing investment in self-commissioned video content, our improved selection of licensed video content, and our scheduling and audience management initiatives", CEO Pony Ma said in a statement.

Martin Lau Chi-ping, the president at Tencent, said in a conference call on Wednesday that the firm's heavy investment in producing original content has generated positive traction and market share.

Monthly active user accounts (MAU) reached 843.2 million, which represents a decline of 3.8 percent year-on-year.

As the world's largest video games company by revenue, Tencent's third-quarter financial results still showed online games as its main growth driver.

Revenue from its smartphone games increased 84% to more than 18.2 billion yuan for the quarter, led by the strength of games such as Honour of Kings, the popular online multiplayer battle arena game.

Tencent owns League of Legends creator Riot Games and Clash of Clans maker Supercell. The gaming business was also backed up by digital content and online advertising in the Chinese region.

Tencent's operating profit rose 57 percent year-on-year.

The transaction represented Tencent's single biggest investment in a video games company.

Other reports by Iphone Fresh

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