Tencent reports no revenue growth, as gaming crackdown in China affects active player base
Tencent has released its financial report for the first quarter of 2022 (ended March 31). The Chinese tech giant recorded no revenue growth, citing a decrease in its domestic player base due to the latest game-related restrictions in the country.
Moonlight Blade
Key takeaways from the report
- The company reported revenue of $20.1 billion, showing no growth compared to the first quarter of 2021.
- As pointed out by Reuters, it is Tencent’s worst performance since going public. Revenue was also below an average estimate of $20.92 billion.
- Tencent’s net profit for the first quarter of 2022 was $5.9 billion, which is down 34% year-over-year.
- Although Tencent remains the most valuable company in China, its market value has more than halved from its peak of $930 billion in February 2021 to $451 billion.
- Domestic games revenue decreased by 1% to around $4.9 billion. The company cited “minor protection measures” as the main reason affecting active player count.
- Although player spending in recently launched titles like League of Legends: Wild Rift and Fight of The Golden Spatula continues to grow in China, other flagship games like Call of Duty: Mobile and Moonlight Blade Mobile experienced a decrease in revenue.
- International games revenue increased by 4% to around $1.5 billion, with Valorant and Clash of Clans being the main drivers for the growth.
- Mobile games revenue, which Tencent attributes to its social network business, reached $5.98 billion in revenue (down 3% year-over-year).
- PC games revenue reached $1.79 billion, which is up 2% year-over-year.
Minor protection measures that Tencent mentioned in its financial report include several restrictions by the Chinese government like cutting playtime in online games for underage users to only three hours a week. As a result, total time spent by minors in the company’s game reduced by 88% in the fourth quarter of 2021.
