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Tencent profit tumbles after Chinese gaming review

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Tencent profit tumbles after Chinese gaming review

Tencent profit tumbles after Chinese gaming review

Tencent profits have taken a tumble after Chinese regulators conducted a review of the lucrative online gaming sector.

Julian Satterthwaite reports.


Tencent profit tumbles after Chinese gaming review

Tencent Holdings reported a big drop in earnings on Thursday (March 21).

Profit down by 32 percent.

Asia's second-most valuable listed firm makes money from messaging and online advertising - but smartphone games are its big earner.

That became a problem after Chinese regulators decided to review the gaming business.

Reuters' Pei Li in Beijing explains: SOUNDBITE (English) REUTERS REPORTER PEI LI, SAYING: "Also the government has been saying that they want to limit the number of games on the market and also - over concern that you know there is addiction on games among children." Approval of new games was suspended from March to December last year.

The move wiped 100 billion dollars off Tencent's market value.

Tencent profit for the fourth quarter just over 2 billion dollars - well short of analyst estimates.

Now the firm plans to expand overseas.

But Chinese regulators are far from its only problem: SOUNDBITE (English) REUTERS REPORTER PEI LI, SAYING: "China's economy is slowing down and that's also making an impact on Tencent's revenue from consumers and advertisers and also Tencent's been facing a lot of competition from local rival Bytedance, which is the world's highest valued tech startup which has 75 billion dollars valuation Tencent's really competing with its app - short video app - TikTok and its Chinese version Douyin, which has been taking away a lot of traffic from Tencent's WeChat and other platforms." Tencent shares closed down about 2 percent in Hong Kong before the results came out.

They're down about a quarter on a year ago.

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