Tencent Profit Recovers, Approaches $6 Billion in First Quarter
Tencent, the Chinese social media, gaming and streaming giant, enjoyed a 62% gain in profits, earned from a 6% revenue improvement in the first quarter of the year.
Profits between January and March reached RMB42.6 billion ($5.92 billion). That figure also represented a 55% quarter on quarter gain. Three-month revenues amounted to RMB160 billion ($22.2 billion).
More from Variety
Tencent Music Profits Climb 28% in First Quarter as More Users Pay for Streaming
China Box Office: 'Kingdom of the Planet of the Apes' Opens on Top of Weekend Chart
AMC Networks' U.S. Ad Sales Fall 13% as Paid Streaming Subscribers Reach 11.5 Million in Q1
“Several of our leading games in China and internationally started to benefit from team reorganizations we put in place, resulting in an increase in games gross receipts and creating a foundation for our games revenue to resume growth in future quarters,” the company said in a regulatory filing statement.
Tencent Video released several popular self-commissioned drama series and animated series, such as the Wong Kar-wai-directed “Blossoms Shanghai,” as well as “The Hunter” and “Perfect World Season 4,” driving an 8% year-on-year increase in long-form video subscriptions. Average daily video streaming subscriptions were 116 million in the first quarter.
Revenues from value-added-services decreased by 1% year-on-year to RMB78.6 billion ($10.9 billion) for the first quarter of 2024. Tencent Music Entertainment, Monday reported a 28% profit increase as streaming subscriptions and per user revenues improved.
International Games gross receipts rose 34% year-on-year, due to resurgent popularity for Supercell’s games, in particular “Brawl Stars,” and user and gross receipts growth from “PUBG Mobile.” Stripping out currency effects, international games revenues were up a lesser 3% year-on-year to RMB13.6 billion. The company blamed this on “the lengthy revenue deferral cycle for Supercell’s games.”
Chinese games gross receipts returned to year-on-year growth, increasing by 3%, but Chinese games revenues declined by 2% year-on-year to RMB34.5 billion due to revenue deferral. Revenue from “Honour of Kings” declined year-on-year. So too did revenue from “Peacekeeper Elite.” Recently launched games, including “Valorant,” “Lost Ark” and “Fight of the Golden Spatula” each gained.
Social networks revenues declined by 2% to RMB30.5 billion, reflecting increased revenues from music and long-form video subscriptions. That figure, however, represented an 8% quarter-on-quarter recovery.
On a post-announcement conference call with media and financial analysts, Tencent management said that they saw no structural risks in the games segment. That follows a restarting of games permitting by Chinese authorities and marks a change of tone following a prolonged period of regulatory clampdown.
Best of Variety
Sign up for Variety’s Newsletter. For the latest news, follow us on Facebook, Twitter, and Instagram.