Tencent revenue dips 3% to $19.78 bn in June quarter

Tencent said revenue declined 3 percent to 134 billion yuan ($19.78 billion) for the three months ended June 30, the second straight quarter showing a fall.
Tencent WeChat
Net profit of Tencent nosedived 56 percent to 18.6 billion yuan.

Tencent, which makes much of its money by developing games such as Honour of Kings and Call of Duty Mobile, said revenue from online games decreased both at home and abroad by 1 percent.

Tencent, the promoter of WeChat messaging app, said advertising revenue fell 18 percent to 18.6 billion yuan ($2.74 billion) as advertisers tightened budgets.

Revenue growth from Tencent’s fintech and business services slowed to 1 percent to 42.2 billion yuan ($6.22 billion).

Tencent has shut some unprofitable businesses and promised a return to growth even if the economy stayed weak.

The company has shuttered non-core businesses in areas such as online education, e-commerce and game live-streaming, rationalised underperforming businesses, and significantly cut marketing costs.

Wechat’s video accounts – a short-video rival to ByteDance’s Tiktok – will boost advertisement sales and become a big revenue driver.

INVESTMENTS

Tencent, which has investments worth $90 billion in other companies, has been reducing its portfolio partly to appease regulators and also to book some profits.

Tencent denied a Reuters report that said it plans to sell all or a bulk of its $24 billion stake in food delivery firm Meituan.

Tencent recently sold some of its holdings in Singapore-based gaming and e-commerce firm Sea to raise $3 billion. It sold down some of its stake in Chinese e-commerce firm JD.com to hand more than $16.4 billion as a dividend to its shareholders.

Tencent remained active in acquiring new game studios outside China. In June, Tencent acquired Copenhagen-based Sybo Games, the developer of hit mobile game Subway Surfer.

Reuters reported earlier this month that Tencent was in talks to raise its stake in French video game giant Ubisoft.

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