In September, accounts registered as children contributed 0.7% of the total gaming time of Tencent’s domestic games, down from 6.4% the year before. Tencent and TiMi Studios' mobile game Honor of Kings. In August 2021, Beijing cut the time children can spend playing video games to just three hours a week.Ī more significant problem was Beijing freezing the issuance of game licenses from August 2021 - effectively suspending the release of new games. While three-quarters of that came from China, domestic revenue grew just 1% in the fourth quarter. Tencent’s game business, which involves many studios and publishers in which it has invested, brought in 174.3 billion RMB in revenue in 2021, nearly one-third of the firm’s total. To deal with these headwinds, it has sought to cut costs with corporate restructuring and pushed to expand its international revenue streams, though neither of these measures has proven an unqualified success. ![]() Stagnant gaming businessĪs a major growth engine for the company, a local regulatory crackdown on gaming has been especially worrying for Tencent. It is not clear how many now face the axe.īut it comes as the Shenzhen-based giant contends with organisational missteps, lacklustre growth, and growing competition from rival ByteDance Ltd. At the end of 2021, Tencent had 144,118 employees. On the call, Lau tried to put a positive spin on the firings, saying that they would help establish a “value-based, efficiency-based, and healthier and sustainable growth mode”. It peaked at 1.68 million RMB per person in the first quarter of 2020. Tencent’s employee cost-effectiveness - the ratio of revenue per employee - slid to 1.29 million RMB in the fourth quarter of 2021. For the year, Tencent posted 560 billion RMB in revenue and 123.8 billion RMB in net profit. Revenue was up 8% year-on-year at 144.2 billion RMB (US$22.64 billion), while net profit plunged 25% to 24.8 billion RMB. In the fourth quarter, Tencent saw its slowest growth since it went public in Hong Kong in 2004. Insiders at Tencent said that the sale was made over concerns of greater antitrust scrutiny to come. for 78 billion RMB, reducing a nearly 17% holding to just 2.3%. ![]() On 23 December 2021, it sold down its stake in e-commerce giant JD.com Inc. Tencent’s plan to merge China’s two largest game-centric livestreaming platforms fell apart amid the antitrust crackdown.Īmid this uncertainty, the company is hedging its risks. Pony Ma, CEO and co-founder of Tencent Holdings Ltd., speaks during a news conference in Hong Kong, China, on 21 March 2019. ![]() On 23 December 2021, sold down its stake in e-commerce giant JD.com Inc. Beijing launched a regulatory broadside at the tech sector, aiming at some specific worries such as minors spending too long glued to games, as well as broad goals such as curbing anti-competitive behavior and the “disorderly expansion of capital”, partly under the banner of “common prosperity”. Tencent’s CEO and co-founder Pony Ma was blunter at an internal meeting in December, saying that “winter is coming” for the firm. Tencent - the operator of China’s unassailable WeChat super-app, the world’s largest video game publisher and one of Asia’s most valuable companies - is firing its staff.Īt the tech conglomerate’s latest earnings call on 23 March, Tencent president Martin Lau admitted that the industry faces “fundamental changes and challenges” after years of “frothy and unhealthy” growth. (By Caixin journalists Manyun Zou, Guan Cong, Du Zhihang, Zhang Erchi and Qu Yunxu)
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