Esports

Tencent Reports $2.99B Net Income, Mobile Games Revenues Up, PC Games Revenues Down


Mentioned in this article

  • Tencent reported its Q3 2019 financial results, with total revenues for Q3 up 21% to ¥97.2B RMB ($13.9B USD) from ¥80.6B ($11.5B) in Q3 2018. 
  • The company generated a net income of ¥21B ($2.99B) for the period, down 10% from ¥23.4B ($3.32B) in the same period in the previous year. 
  • Riot Games’ Teamfight Tactics enhanced League of Legends’ user time spent and increased its revenue internationally.

Yesterday, Chinese multinational investment holding conglomerate Tencent Holdings released its Q3 2019 earnings for the period ended Sept. 30. The company generated total net revenues of ¥97.2B ($13.9B), an increase of 21% over the third quarter of 2018.

Tencent’s total online games revenues increased 11% year-on-year (YoY) to ¥28.6B ($4.07B). Total mobile games revenues increased by 25% YoY to ¥24.3B ($3.46B). The robust performance of key domestic titles and increasing contributions from overseas titles drove the growth.

“We have made encouraging progress toward globalizing our business, particularly for online games, where we created, published and operated some of the most popular mobile games outside China, such as PUBG MOBILE and Call of Duty Mobile,” said Martin Lau, Tencent president, in the company’s Q3 earnings call. “International markets contributed a teens percentage of our games revenue in the quarter.”

The company generated a net margin of 22% for the period resulting in ¥21B ($2.99B) net income for the period, down 10% from ¥23.4B ($3.32B) in the same period in the previous year. The net result translates into ¥2.15 ($0.30) in earnings per share for profit attributable to equity holders of the company.

Furthermore, Tencent’s executive leadership commented on several economic developments within the company’s gaming segment. They reported that the Peacekeeper Elite’s summer content update enhanced user engagement in China. While the game contributed to cash receipts for the full quarter, it still is in the early-stage of deferred revenue recognition. Additionally, they disclosed that daily active users (DAUs) of Honor of Kings remained healthy and more users purchased season passes during the period.

Internationally, PUBG MOBILE doubled its average monthly active users (MAUs) compared to the same period last year. Tencent also developed the Call of Duty Mobile game with Activision Blizzard, which exceeded 100M downloads within a month of launch.

While mobile games revenues increased, Tencent’s PC client games revenues decreased by 7% YoY and 2% quarter-on-quarter to ¥11.5B ($1.64B). According to the company, this is due to reduced revenues from the popular fighting game DnF. Offsetting this trend is Riot Games’ League of Legends’ auto battler mode Teamfight Tactics, which, according to Tencent, established global leadership in the emerging auto battler genre by leveraging League of Legends’ strong IP and engaged user base. Teamfight Tactics enhanced League of Legends’ user time spent and increased its revenue internationally.

Note: The Esports Observer used the exchange rate in effect as of Nov. 14 at a rate of 7.02172 RMB to 1 USD for currency conversions in this article.



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