Tencent missed both revenue and profit prediction in its earnings report for the second quarter, which fell 3% year on year to $19.78 billion. The company blamed the declines on China's Covid Zero program and strict gaming regulations.
The South China Morning Post reports that Tencent Game Developers Conference saw the company highlight expansion opportunities for its own games and those from other Chinese developers, focusing on the Middle East, Latin America, and Southeast Asia as emerging markets.
China's gaming industry is one of the most heavily regulated in the world. Since July last year, developers must get their first ISBN license to publish games on the mainland, but Tencent and NetEase have yet to get any licenses for their mobile or PC games in 2022.
China also limits how long minors may play online games, which the country once dubbed "spiritual opium." That was reduced last year to only one and a half hours on weekdays, weekends, and weekends. On Fridays, Saturdays, Sundays, and holidays, Tencent publicly refuted rumors that the restrictions would be reduced during the summer holidays when children are off school.
Tencent had lost more market cap value this year than any other company in the world. Its stock is down 60% since February 2022, causing the value to sink by $564.1 billion. Another Chinese giant, Alibaba, was second on the list with a $494 billion loss in market cap, followed by Meta with a $302 billion decrease.
Tencent has a 100% ownership stake in several well-known gaming companies, including Riot Games, Sumo Group, and others. Epic Games, Supercell, and Ubisoft are just a few of the companies that have sold their video games internationally in Q2, while domestic gaming revenue decreased by the same percentage.
Chris Yunker, Masthead