Tencent generated over $6.3 billion from games in Q3, solidifying its status as world's #1 game company by revenue
Tencent has issued its financial report for the third quarter of 2023 ended September 30. With its gaming business showing strong growth, the Chinese tech giant plans to expand its existing franchises globally and develop more titles based on third-party IPs.
- According to its Q3 earnings release, Tencent reached 154.6 billion yuan ($21.5 billion) in revenue, up 4% year-over-year.
- Profit fell 5% year-over-year to 36.8 billion ($5.1 billion).
- The company’s gaming business accounted for 30% of its total revenue, or $6.36 billion.
- It also noted that it remains the number one company in the world by video game revenue, as well as the leader in China by both revenue and the number of users.
- The Domestic Games segment brought in 32.7 billion yuan ($4.52 billion), up 5% compared to the same period last year. The growth was driven by launches of Valorant and Lost Ark in China, as well as the ongoing success of hits like Honor of Kings and DnF.
- The International Games segment reached 13.3 billion yuan ($1.84 billion) in revenue, up 7% year-over-year. The main drivers were Goddess of Victory: NIKKE, Valorant, and Triple Match 3D, plus the company saw a “revenue recovery” for PUBG Mobile.
- Tencent plans to increase its investment in gaming to stimulate long-term growth and create bigger hits. This includes areas like content-driven titles like Naruto Mobile, Lost Ark, and NIKKE.
- The Chinese tech giant will continue to expand its own franchises by creating new versions of its evergreen hits (Honor of Kings: World), developing mobile titles based on its popular brands (Valorant Mobile), and reviving old series (Delta Force: Hawk Ops).
- It will also bring third-party IPs like Monster Hunter, Assassin’s Creed, and One Piece to mobile and invest in “new titles in high potential genres” (Dream Stars, Nightingale, Ash Echoes).
- Tencent is also satisfied with the Mini Games segment, which includes casual titles working on WeChat’s Mini Programs. It provided “high margin revenue streams” in the third quarter.
- Speaking of other areas, Tencent CEO Ma Huateng said the company is working on its own AI models and tools: “We are increasing investment in our AI models, providing new features to our products and enhancing our targeting capabilities for both content and advertising. We aspire to position our leading AI capability not only as a growth multiplier for ourselves, but also as a value provider to our enterprise customers, and the society at large.”