Tencent share price falls after first profit drop in 10 years

Tencent share price falls after first profit drop in 10 years

Tencent share price falls after first profit drop in 10 years

According to the report, the company saw significant growth in Q2 with total revenue up 30% year-on-year to 73.7 billion yuan ($10.7 billion).

"To monetise online games at this moment is very critical" for Tencent, said Huarong International Securities analyst Jackson Wong, adding that the firm would face further revenue decline if new gaming releases were stalled further. Tencent has lost close to a third of its market capitalization, or around $170 million since its peak in January, but it remains as one of the largest public company in Asia with a market capitalization of almost $400 billion.

There has been a sell off of Chinese tech and entertainment stocks, led by stock market darling Tencent, the company behind the ubiquitous-in-China WeChat mobile app. But its massive smartphone and web population also makes it the world's largest gaming market with an estimated $37.9 billion in revenue, according to research by Newzoo.

Anonymous sources supposedly familiar with the matter told Bloomberg that a shake-up within the Chinese government has caused a lack of clear leadership in the National Television and Radio Administration and the ministry of Culture and Tourism.

Tencent reportedly created their own mobile game, "Wangzhe Rongyao" in 2015 (later known as "Arena of Valor" in North America), after Riot apparently declining their suggestion to turn League of Legends into a mobile title.

Tencent launched a mobile version of the popular South Korean game, PlayerUnknown's Battlegrounds (or PUBG), but has been unable to win regulatory approval to offer in-game purchases. Recently, the news has come out that the authorities are holding off the issuing of gaming licenses for video games for at least 4 months.

Last year, Tencent was one of several private internet companies that had to inject funds into a struggling state telecom.

"It's quite a big mess", said Serkan Toto, CEO of Tokyo-based game industry consultancy Kantan Games. As we said earlier, it's hard enough getting a game or product to "pass" China's censorship board. The record was previously held by Gintama. "We're working together toward an exciting future, both for League and our upcoming games (yes "s")".

Hirokazu Koreeda's Shoplifters is reported to have extended its theatrical run in China to October 2. "The miss, however, was driven purely by regulatory delays to game approvals, meaning the long-term story for Tencent may well remain intact". Alibaba Group affiliate Ant Financial was initially cheered for providing everyday people and small businesses with easier access to loans and other financial products.

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