Tencent Gaming Revenues Plateau In The Midst Of Countrywide Restrictions

Tencent released its first-quarter results for 2021, which revealed that the company brought in a total of $21.3 billion in revenues for the year ending March 31st, 2021, 32% of which came from the company’s gaming operations. Unfortunately, but not surprising to the company, was its 1% year-over-year decrease in the domestic market, which Tencent’s President Martin Lau blamed on the “minor protection measures” which negatively impacted the number and playing time of young, paying users.

China set strict gaming guidelines for minors which prevent them from playing games on the weekdays or for more than three hours total on the weekends. The government also issued an eight-month long freeze on issuing licenses for new video games, putting the entire industry on hold.

But with that in the rear-view mirror, things have picked back up, and both Lau and Chief Strategy Officer, James Mitchell, are feeling optimistic.

“I think […] with more [licenses] being issued, and with the industry now on a more stable regulatory footing, […] it’s reasonable to expect that […] industry grossing trends will begin to improve as we move through the year,” said Mitchell.

Meanwhile, international gaming revenues for Tencent saw a 4% increase year-over-year, although that number didn’t spark unbridled elation from the company, who attribute the plateau to the “post-COVID” normalization during the quarter.

Still, the company saw increased revenue worldwide in titles like VALORANT and Clash of Clans, but also watched mobile game spending in the US drop 10%. So to say it’s been a mixed bag of a first quarter for Tencent would be an understatement.

But “normalization” is the key word at the company, which is waiting for the “COVID hangover” to finally dissipate. Once the world returns to “normal,” Tencent expects to see their numbers do the same.  

Of course, how they’ll continue to make money in their own country with all the gaming restrictions will present a whole new challenge and gameplan.

(All information was provided by GameDaily)

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