In the third quarter, Tencent's revenue grew by only 13%. The company has not shown such low dynamics for 17 years

The actions of the Chinese authorities have affected the financial performance of Tencent. The growth rate as revenue reached its lowest in 17 years. In the third quarter of 2021, the company earned $22.2 billion, and its revenue from games amounted to $8.4 billion.

Call of Duty: MobileGeneral data

• The revenue of the industrial giant amounted to ¥142.4 billion ($22.2 billion) — an increase of 13% in annual terms. This is lower than analysts’ forecasts, but insignificant (it was expected that Tencent’s earnings would reach ¥145.4 billion or $22.7 billion). Nevertheless, the current dynamics is the lowest for the third quarter since 2004, the year the company entered the stock exchange.
• The profit of the entire company amounted to ¥39.5 billion ($6.17 billion) — 3% more than last year. The last time Tencent had such a slow rate of profit growth was two years ago. However, analysts even predicted a decline in profits for the company. According to their calculations, it should not have exceeded ¥32.6 billion ($5 billion).
• Analysts’ low expectations were associated with the close attention of the Chinese authorities to the video game industry. In early August, a number of state media criticized the games, calling them “electronic drugs” and “spiritual opium”. A month later, local teenagers were banned from playing online games for more than three hours a week. The country has also prepared stricter rules for licensing games, against which the regulator has not approved the release of new titles in China for more than three months.

Game Data

• In the third quarter, Tencent’s revenue from games reached 54.2 billion rubles ($8.46 billion), which is 6.7% more in annual terms than a year earlier. The main drivers of growth were Honor of Kings, Call of Duty: Mobile and Moonlight Blade Mobile.
• Of this amount,4242.5 billion ($6.6 billion) fell on mobile. An increase of 9% compared to 2020.
• Tencent received 25% of its gaming revenue thanks to titles released abroad. We are talking about such projects as Valorant, League of Legends: Wild Rift and Clash of Clans.
• In October, Honor of Kings was the leader among mobile games in China by DAU. The second place went to League of Legends: Wild Rift. The company did not name the average size of the daily audience in these titles.
• At the end of August, Tencent released Fight of The Golden Spatula, a Chinese adaptation of Teamfight Tactics developed by Riot Games. As of the end of September, the project was the second largest DAU among all mobile games released in China in 2021.
• The share of in-game payments from Chinese gamers under the age of 18 was 1.1%. A year ago it was 4.8%.
• Also, underage gamers accounted for 0.7% of the time that all Chinese users spent in Tencent games. Last year, their share was higher — 6.4%.