Chinese multinational investment holding conglomerate Tencent reported an increase in its Q1 2020 revenue by 26% from the last year’s same period, partly due to online mobile games.
The corporate generated a total net revenue of US$15.2 billion in Q1 2020. Accordingly, this has increased significantly from last year’s Q1 total net revenue of US$12.1 billion.
COVID-19 containment policies, both in China and the global scope, have jeopardized myriad companies, but not Tencent. Accordingly, the company greatly benefited from the increasing online gaming activities due to lockdown throughout the world.
However, considering Tencent’s services, the profits were also because of the company’s offering of digital services. The company’s chairman and CEO Ma Huateng attributed the profits to company’s digital services.
“During this difficult period, we seek to provide online services that keep people connected, informed, productive, and entertained. So far, our businesses have proved resilient and cashflow-generative,” he explained.
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How Tencent Gains Profits from Online Games
Tencent’s first quarter revenue from online games increased by 31% year-over-year to US$5.26 billion. However, mobile games are the most profitable aspect during the quarantine, while PC games performed poorly recently.
In sum, mobile games revenues were US$4.91 billion. These revenues came from domestic mobile games such as Peacekeeper Elite and Honor of Kings, as well as overseas titles such as PUBG MOBILE and Clash of Clans.
In contrast, PC gaming activities in China greatly declined as internet cafes temporarily halted its operations. Tencent’s spearhead PC game such as DnF witnessed a lower game activity due to people being unable to visit internet cafes.
In total, nevertheless, Tencent saw an increase of playing time, especially in mobile games, due to the stay-at-home policies. Specifically, game playing time and in-game consumption activities notably elevated during the lockdown period.