Tencent has released its financial report for the first quarter of 2022 (ended March 31). The Chinese tech giant recorded no revenue growth, citing a decrease in its domestic player base due to the latest game-related restrictions in the country.
Key takeaways from the report
- The company reported revenue of $20.1 billion, showing no growth compared to the first quarter of 2021.
- As pointed out by Reuters, it is Tencent’s worst performance since going public. Revenue was also below an average estimate of $20.92 billion.
- Tencent’s net profit for the first quarter of 2022 was $5.9 billion, which is down 34% year-over-year.
- Although Tencent remains the most valuable company in China, its market value has more than halved from its peak of $930 billion in February 2021 to $451 billion.
- Domestic games revenue decreased by 1% to around $4.9 billion. The company cited “minor protection measures” as the main reason affecting active player count.
- Although player spending in recently launched titles like League of Legends: Wild Rift and Fight of The Golden Spatula continues to grow in China, other flagship games like Call of Duty: Mobile and Moonlight Blade Mobile experienced a decrease in revenue.
- International games revenue increased by 4% to around $1.5 billion, with Valorant and Clash of Clans being the main drivers for the growth.
- Mobile games revenue, which Tencent attributes to its social network business, reached $5.98 billion in revenue (down 3% year-over-year).
- PC games revenue reached $1.79 billion, which is up 2% year-over-year.
Minor protection measures that Tencent mentioned in its financial report include several restrictions by the Chinese government like cutting playtime in online games for underage users to only three hours a week. As a result, total time spent by minors in the company’s game reduced by 88% in the fourth quarter of 2021.