Chinese gaming and social media giant Tencent Holdings said second-quarter net profit rose 37 per cent, beating market estimates, on higher demand for its video games as coronavirus put a dent in other entertainment options.
Revenue from online games, which accounts for one-third of total sales, jumped 40 per cent in the quarter, primarily driven by smart phone games including Peacekeeper Elite and Honour of Kings. That offset a continued decline in desktop games.
Social networks, fintech and business services, and social advertising revenues all grew by nearly 30 per cent.
Media advertising revenues fell by 25 per cent however, “as a result of weak brand advertising demand amid the challenging macro environment”, and delayed content production and releases.
The world’s largest gaming firm by revenue booked a US$4.8 billion profit for the three months through June. Revenue rose 29 per cent to $16.5 billion.
The results come a few days after the US said it would ban WeChat-related transactions in the country.
Tencent, which owns the Chinese messaging app, is under pressure to address concerns about the impact of the ban and outline its plans to mitigate any fallout.
The company has also postponed a blockbuster release of “Dungeon and Fighter Mobile” game planned for August 12, citing upgrades needed to the game’s addiction prevention system.
- Reporting by Pei Li; Editing by Louise Heavens and Jan Harvey.