Tencent Q1 profit rises 65% as online gaming revenue climbs

Chinese gaming and social media giant Tencent Holdings Ltd reported a forecast-beating 65% rise in quarterly profit. This is driven by a surge in users for its video games in China and international markets.

Tencent is the the world’s largest gaming firm by revenue. The company has booked a profit of 47.77 billion yuan ($7.42 billion) for the three months through March. This profit is higher than the average analyst estimates. The revenue rose 25% to 135.3 billion yuan. Tencent said that the revenue from online games grew by 17%.

Chinese regulators have stepped up a sweeping anti-trust clampdown on its internet giants. They have already penalised Tencent rival Alibaba, $2.75 billion. Tencent was told by Chinese anti-trust regulators to pay a fine that could exceed 10 billion yuan, give up exclusive music rights, and sell some of its music assets, this was noted in a report. But there was no comment for this from the Tencent.

Tencent Music, a music streaming company is facing heightened scrutiny from Chinese regulators. This is also controlled by the Tencent. Tencent is also facing mounting competition from ByteDance, the owner of TikTok, and the similar short-video platform Douyin. This have made sizeable inroads into the video games business. This includes acquisition of a couple game studios this year.

32% of the Tencent’s revenue is from the video games. In the annual video gaming conference, it has unveiled more than 60 new titles. The company is looking forward to launch a mobile version of its League of Legends game. And also, to launch a Pokemon game in partnership with Nintendo, later this year. Tencent also stated that they are focusing on large scale and high production value games that can appeal to users globally.