Chinese tech giant Tencent Holdings Ltd’s (騰訊) revenue fell 2 percent year-on-year in the third quarter, the company said in a statement yesterday, as Beijing’s regulatory crackdown on video games and the tech sector hit its business.
The Hong Kong-listed company, which is the world’s top video game maker and the owner of popular app WeChat, posted revenues of 140.1 billion yuan (US$19.8 billion) in the third quarter, compared with the average projection of 141.4 billion yuan.
Net income came in at 39.9 billion yuan, versus the 25.2 billion yuan estimate.
Photo: Reuters
It is Tencent’s second consecutive quarterly decline in revenue, as the company grapples with tightened regulations.
The company said that domestic video games in particular saw a 7 percent decrease in the three months ending Sept. 30, “as transitional industry challenges resulted in lower-paying user counts.”
Profit attributable to equity holders was up 1 percent in the third quarter, with the company saying it had implemented “business rationalization and cost efficiency initiatives.”
Tencent said it had cut costs in its cloud service projects and also “more tightly controlled” content costs for online advertising.
It announced in a separate statement that it would distribute the majority of its stake in food delivery company Meituan (美團) to shareholders.
It made the decision because it judged that Meituan had now “attained a robust level of financial strength, industry positioning and investment returns,” Tencent said.
The tech giant appeared to have laid off a number of employees in the third quarter, as its payroll shrank by more than 1,800 employees between June and the end of September, stock exchange filings showed.
The Shenzhen-based company has increasingly turned to overseas business, particularly in Europe.
The group bought British game studio Sumo Group PLC for US$1.3 billion last year and increased its stake in French studio Ubisoft SA in September.
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