HONG KONG – Chinese tech giant Tencent’s revenue is growing at its slowest pace in two years, results released today showed, as it and other gaming firms now brace for an expected regulatory crackdown.
Total revenues came in at US$42.3 billion (RM179.2 billion) for the first half of this year, up by 23% year-on-year, while operating profits were up by 17%.
Sales went up 20% to US$21.3 billion for the second quarter while mobile games sales grew 13%.
While the figures remain healthy, the growth rate has slowed closer to pre-pandemic levels.
Gaming giants saw a boom in profits over the last year as the coronavirus swept the globe and kept consumers at home, but Chinese gaming firms are now facing new headwinds.
China’s communist rulers have been cracking down on Big Tech and other powerful sectors are deemed to be out of control with signs that show gaming is next in the firing line.
The online gaming industry, which made revenue of 130 billion yuan in the first half of this year, has been the subject of several menacing state media reports in recent days, with one article labelling such games as “spiritual opium”.
The negative headlines have fuelled concerns the sector is next in line for the regulatory axe, which has cut into large tech firms from e-commerce behemoth Alibaba to ride-hailing giant Didi Chuxing, hammering share prices.
Last month, regulators ordered Tencent’s music arm to relinquish exclusive licensing deals with a number of levels and quashed a potential merger of two rival game streaming platforms.
Earlier this month, Tencent dropped bombshell curbs on playtime, an early sign of broader industry changes to come.
Players under 12 years old, for example, can no longer make in-game purchases of multiplayer battle smash-hit Honor of Kings, while those below 18 years old will be locked out after two hours during holidays and one hour on school nights. – AFP, August 18, 2021
