Tencent’s Gaming Strategy paying off, posts best quarterly results

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Tencent, the Chinese internet giant which owns and operates the famous WeChat and QQ messaging apps in China had been investing in games as the strategic growth strategy.

This involved building games inhouse as well as investing in global gaming leaders like Riot Games , studio behind the famous League of Legends enterprise and Supercell , company behind the highest grossing Clash of Clans and Clash Royal mobile games. Supercell alone had a revenue of more than $2 billion dollar last year. It owns a stake in one of the biggest global developer-publisher giants (Activision-Blizzard), and it has a stake in some of console gaming’s most popular game series in Epic Games. The in-house title Honor of Kings generated between US$406.5 million and US$435.5 million in gross revenue last month alone. Tencent’s biggest secret weapon in a quest to dominate the local gaming market is its distribution channel WeChat. Everyday Chinese casual gamers spend millions of dollars in buying virtual goods and upgrades. On iOS, for example, Tencent has the top free-to-play game and seven of the top 20 highest-grossing games, far more than any other company according to App Annie.

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Tencent isn’t all about mobile gaming, though. Its origins are in PC gaming, and once again, that’s a sector that Tencent itself completely dominates in China. China’s three most popular PC games – League of Legends, Dungeon and Fighter, and Crossfire – are all distributed and operated by Tencent in China.

In terms of original content company has been pushing into areas like film making with backing latest movie “Kong: Skull Island,”. Next in line for company is helping finance the upcoming summer movie “Wonder Woman.” Its Chinese TV drama “Candle in the Tomb” grossed about 2.5 billion views as of January before the show’s finale, according to Tencent’s news portal QQ.com.

The Shenzhen-based company reported quarterly revenue of US$7.2 billion and net income of US$2.1 billion, beating analysts’ predictions of US$6.7 billion and US$1.9 billion, respectively. Revenue from Tencent’s growing online ads business – built largely on its WeChat and QQ social media platforms – increased 47 percent during the quarter, clocking in at US$1 billion.

Also as part of its plan to expand esports in China Tencent recently agreed to build an eSports town in the city of Wuhu, China. Tentatively known as “Tencent eSports Town”, the area will consist of a eSports theme park, an eSports university, a cultural creative park, a comics and animation industrial park, an entrepreneurship community, a big data center, and will play host to other new technologies and businesses.Tencent eSports Town will also hold regular eSports events, including QQJOY (Tencent Comics and Games Carnival) and QGC (QQ Mobile eSports Contest).

In 2017, April 21, Tencent announced the rebranding of it’s Chinese ‘Tencent game platform’ as WeGame, which will be going global in July 2017. It seems pretty clear that Tencent is focussed on original content and games will be key part of its future growth.

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