Tencent recently announced its Q2 2022 financial results. For the first time ever, the organization saw quarterly revenues decline year-over-year.
Revenues fell short of Refinitv’s estimates, coming in at $19.56 billion. This represents a 3% year-over-year decrease. Moreover, profits took a major hit, dropping to $2.71 billion (a 56% fall).
“During the quarter, Tencent faced macroeconomic headwinds stemming from a resurgence of COVID in China and subsequent lockdowns of major cities, including the financial metropolis of Shanghai. Authorities have committed to a ‘Zero Covid’ policy which has caused disruptions across the world’s second-largest economy,” says CNBC. “Meanwhile, China’s domestic video games industry has also faced challenges due to stricter regulation. Tencent makes about a third of its total revenue from gaming.”
The struggles at Tencent are indicative of a greater problem taking place in China. even though the country’s economy grew during the second quarter of this year, it failed to meet analyst expectations.
(All information was provided by CNBC)