Tencent's quarterly revenue jumps as online gaming surges

Tencent's quarterly revenue jumps as online gaming surges

(Reuters) - Chinese gaming and social media group Tencent Holdings Ltd on Wednesday reported a market-beating 26% jump in quarterly sales, helped in part by a surge in revenue from its online gaming business.

Revenue rose to 133.67 billion yuan ($20.5 billion) in the quarter ended December, versus market expectations of 132.19 billion yuan, based on data from Refinitiv.

Tencent, which has benefited from a surge in paying users for video games in China and international markets, said online games revenue rose 29% to 39.1 billion yuan.

Profit rose 175% in the same period to 59.3 billion yuan, largely thanks to fair-value gains in companies Tencent has invested in, and sales of stakes.

Tencent’s two hit games, Honor of Kings and PUBG Mobile, continued to top the rank in China and internationally, respectively, in this quarter.

However, Tencent is facing mounting competition from ByteDance, the owner of TikTok, and the similar short-video platform Douyin, which have made sizeable inroads into the video games business.

ByteDance outbid Tencent last week to acquire Shanghai-based gaming studio Moonton Technology, which is most famous for its Southeast Asia sensation Mobile Legends.

Tencent is also locked in litigation battles with ByteDance, which has alleged that Tencent has engaged in monopolistic behaviour. Tencent has alleged that ByteDance “illegally obtains WeChat users’ personal information”.