The Chinese internet and game company Tencent has seen turnover grow slightly again in the fourth quarter after two-quarters of contraction in a row. However, over the entire year, the Chinese market leader in games and social media did see sales decline.
This was mainly due to stricter regulations from the Chinese government to tackle game addiction among young people.
Tencent is the largest video game publisher in the world and owns the super app WeChat, which allows users to handle everything from banking to shopping. Due to the stricter regulations, the company could not market new games for a long time. The regulations have now been relaxed somewhat, and the Chinese authorities are issuing more licenses for new games.
The turnover of Tencent, in which Amsterdam-listed tech investor Prosus has a large stake, rose to almost 145 billion yuan. That is about 19.5 billion euros. That was slightly better than analysts had expected. In the third quarter, sales amounted to 140 billion yuan. However, turnover grew by only half a per cent compared to the fourth quarter of 2021. Quarterly profit rose 12 percent year-over-year. For the full year, sales fell 1 percent, and profits fell 16 percent.
Domestic sales of Tencent’s gaming branch barely grew last year. However, much is expected for this year from the company’s globally popular games, such as Valorant and Lost Ark, after Tencent received permits for new games for the first time in a long time in December. Tencent is also expected to benefit this year from the release of China’s strict corona policy, which will cause consumers and businesses to spend more on entertainment and advertising again.