Tencent Released Its Q3 Financial Review, Highlighting the Momentum of the Game Segment

Chinese gaming and media giant Tencent Holdings released its third-quarter financial review on Wednesday. Its Q3 total revenue raised 13% to 142.4 billion CNY (~ 22 billion USD), which was the slowest quarterly growth since the company went public in 2004, according to Refinitiv. However, Tencent's net profit rose 3% to 39.5 billion (~6.18 billion USD), exceeding expectations from financial analysts who predicted a decline.

 Starting from Q3 2021, Tencent disclosed revenue from domestic games and international games (including Hong Kong and Macau) as separated segments, highlighting the expanding scale of Tencent's overseas strategies. The overall sales from mobile games rose 9%. The domestic game's revenue grew by 5% to 33.6 billion CNY (~5.24 billion USD), driven mainly by local favorites such as Honor of Kings, Call of Duty Mobile, and Moonlight Blade Mobile. The international games revenues grew by 20% to 11.3 billion CNY (~1.76 billion USD), showing strong performance with Valorant and Clash of Clans.

 Tencent also highlighted how the tightened mandate on underage players affected their finance. According to Tencent, minors accounted for 0.7 % of domestic games time in September this year. The number was a heavy drop from 6.4% in September 2020. The revenue from minors dropped from 4.8% to 1.1%.

 While most of the investors are concerned with the government's tightened regulation over China's gaming sector, Tencent's chief strategy officer James Mitchell believes that the current mandate is unlikely to be extended to adult players and that the current regulatory climate is 'temporary', even though regulators have not approved any new titles since August, the most prolonged freezing period for new game licenses since 2018.

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