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).
“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.
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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.
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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.