![]() This was driven by existing game titles such as Honor of Kings, Peacekeeper Elite, and CrossFire, in addition to new game titles such as Wild Rift and Arena Breakout. The good news is adult gamers (daily active users) increased by double-digit percentages year over year. Either way, this is bad news for Tencent, as gaming time from users under 18 years old has subsequently declined by an eye-watering 92% year over year. There were also calls from parents to help stop gaming addiction, which is prevalent in China and Asia. This regulation may seem overly controlling to those of us in the west, but the Chinese government has a heavy focus on breeding smart, focused children. This decline in revenue was driven by the Chinese government's regulation which aims to stop children under the age of 18 from playing games during the week. Its owned brands include the popular League of Legends, Honor of Kings, CrossFire, and many more.ĭespite the strong gaming business, domestic game revenue declined by 7% year-on-year to $4.4 billion (RMB 31.2 billion). Tencent's gaming business is vast as the company owns major gaming studios such as Riot Games, while also having investments into studios such as Epic Games and the popular Roblox ( RBLX) social game. Tencent has also continued to build out its Metaverse by offering virtual spaces with brands such as Gucci and KFC, as part of its QQ app. The "Health Code" mini-programs have also proven to be extremely popular since the pandemic as they help to verify a user's health and travel ability. WeChat's Mini Programs platform has begun to gain popularity with brick and mortar retail brands and food stores that wish to bridge the gap between offline and online. As a side note, I am surprised that Meta Platforms ( META) hasn't introduced a similar platform for WhatsApp in order to create a "Super App". In the third quarter of 2022, Mini Programs surpassed 600 million daily active users and increased by a rapid 30% year over year, with daily mini programs increasing by 50% year over year. A positive for social networking was the growth of Tencent's " Mini Programs", which was a platform launched in 2017 to enable developers to create mini versions of applications built directly on top of the WeChat ecosystem. This was primarily driven by a 2% decline in social networking revenue to $4.2 billion. The Value Added Services segment reported revenue of $10.1 billion (RMB 72.7 billion), which declined by 3% year over year. Online advertising contributes to 15% of revenue and its FinTech and Business Services segment contributes to 32% of revenue. Tencent makes the majority of its revenue (52%) from Value Added Services which consists of social networks (21% of revenue), domestic games (22% of revenue) and international games (9% of revenue). Total revenue was $19.7 billion (RMB140.1 billion) which declined by 2% year over year, but this did increase by 5% quarter over quarter. Tencent reported mixed financial results for the third quarter of 2022. ![]() In this post, I'm going to break down the company's financials and valuation. The company's expertise and leadership in social media, gaming and the cloud means Tencent is the ideal stock to play the "Metaverse". The company also owns the number one long-form video platform, the number one music platform, the number one mobile payment platform (WeChat Pay) and is even the number two player in the Cloud.īut that is not all, Tencent has major investments into big technology companies such as Tesla ( TSLA), NIO ( NIO), JD.com ( JD ), Spotify ( SPOT ) and many more with a fair value of ~$75 billion. It has the number one mobile community with 1.39 billion monthly active users on its WeChat platform which is like WhatsApp on Steroids and a true super app. Tencent is the number one gaming company by users and revenue in China. The company has been dubbed the "Facebook of China" but it is so much more. Tencent ( OTCPK:TCEHY) ( OTCPK:TCTZF) is the largest gaming and social media company in China.
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