Sunday, 17 October 2021

Tencent profits drop as China puts squeeze on online games

BEIJING: China’s Tencent reported a quarterly drop in net income Wednesday, amid an apparent regulatory squeeze on the tech giant’s online gaming business.

Total revenues for the quarter rose by 30 percent year-on-year to 73.68 billion yuan ($10.65 billion) while online games revenue increased 6 percent to 25.20 billion yuan, according to a filing with the Hong Kong Stock Exchange.

But profit was down 2 percent from the previous year, a result Bloomberg reported was the first drop for the firm in over a decade.

Gaming revenue dropped 12 percent from the first quarter, which the company said reflected a user shift into non-monetised games, the timing of new game launches and “weaker seasonality”.

Bloomberg News reported Wednesday that China had stopped approving any new mobile games as part of a wider shake-up of the market.

Quoting unnamed sources, Bloomberg said approvals for online, console and mobile games have been stalled for months, leaving developers stranded.

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