Revenues rise as Tencent Holdings expands
Tencent Holdings has taken initiatives to develop its online games and digital content businesses, it reports in its results overview for the six months ended June 30.
It has been growing its digital music business by integrating QQ Music with music-streaming platform CMC.
“We believe there is tremendous growth potential in the China digital music industry,” says Tencent, which aims to reach out to the music industry to create new products and business models.
As Tencent Holdings expands, it has also been deepening its involvement in mobile games by acquiring a majority equity stake in Supercell. Supercell’s founding team will continue to manage the company independently, enhancing its games and developing new ones.
Tencent has also been reinforcing its online video business by further investing in movie and TV studios and in its own production projects. It has also been developing its online literature services and working with industry peers to combat piracy.
Looking at its key platforms, smart-device monthly active users (MAU) of QQ grew by 6 per cent year-on-year to 667 million people.
QQ offered enriched features such as sticker-animated video editing, and offering third-party online educational materials to school groups. In May, Tencent launched Now, a live broadcast application that enables QQ users to generate and share real-time video streams.
For Qzone, smart-device MAU increased by 4 per cent to 596 million. Users benefitted from new features such as live broadcast, allowing them to share video streams within their social networks.
For Weixin and WeChat together, MAU grew 34 per cent to reach 806 million. Weixin further penetrated into business communication with growth to more than 20 million registered users of Weixin Enterprise Accounts, which are used for automated internal office tasks.
Tencent says its social networks had strong revenue growth in the second quarter, thanks to an increase in virtual item sales and its digital content subscription services becoming more popular. There was growth of 114 per cent in revenue from smartphone games, reaching about RMB9.6 billion (US$1.449 billion) in the second quarter.
Tencent’s online media platform traffic and advertising revenue also continued to grow during the quarter, with most traffic and about 80 per cent of revenue generated on mobile platforms.
Revenues grew by 52 per cent to RMB35.691 billion for the second quarter, while revenues from value-added service (VAS) business increased by 39 per cent to RMB25.680 billion. Online games revenue grew by 32 per cent to RMB17,124 million.
Social network revenue increased by 57 per cent to RMB8.556 billion, driven by virtual item sales and growing subscription services, especially those for digital content.
Revenue from online advertising grew by 60 per cent to RMB6.532 billion.