Tencent's shares down as China declines new game

Logo of Tencent is displayed at a news conference in Hong Kong China

Logo of Tencent is displayed at a news conference in Hong Kong China

The art style was changed, but the game went on to be a huge success both in Tencent's native China and North America.

"This is the worst result in recent memory from Tencent, with the first quarter-on-quarter fall in profits in 13 years and major disappointment on mobile gaming revenue and margins", said Douglas Morton, the head of research in Asia at Northern Trust Capital Markets. But compared to the previous three-month period, mobile game revenue has dropped 19 percent.

Under pressure to curb gaming marathons on Tencent's smash hit "King of Glory" mobile multiplayer battle game, the company a year ago started restricting daily playing times for children. Worryingly, revenue from online games, which ring in more than a third of the total, grew at a tepid 6% year-on-year.

"The gaming fundamental is actually as strong as it has been", Lau said, pointing to growing user numbers and downloads for the company's games.

Critically for Tencent, in addition to Monster Hunter World being removed from sale, the company still hasn't received approval to introduce the games industry's two hottest properties, Fortnite and PlayerUnknown's Battlegrounds (PUBG). "For new game approvals, there will continue to be a drag", she said.

The company is diversifying by building up advertising, video and music streaming. Monthly active users of the latter fell to 222 million in June, from 245 million in February, according to Jefferies. Tencent is also ploughing cash to outside bets: the value of new investments hit 32 billion yuan in the six months to June.

Iraq's Abadi pulled by competing United States and Iranian forces
Iraq is the second largest importer of Iranian products, aside from fuel, with total imports reaching about $6 billion past year .

Longer-term, Tencent still commands a powerful asset in WeChat, the ubiquitous messaging service that underpins its gaming and ads business. First half revenues show a 39 percent growth year-on-year to 147.2 billion yuan (~$21.2 billion).

China has frozen approval of new game licenses amid a government shake-up, people familiar with the matter said this week.

Many firms have been awaiting games sales licenses since March after Beijing reformed and reorganized the government bodies that oversee the sectors earlier this year, industry executives told Reuters on Tuesday.

Online games are the single largest source of income for Tencent, accounting one-third of the internet giant's revenue.

Shares of Japan's Capcom Co Ltd 9697.T , which developed "Monster Hunter: World", slid more than 5 percent.

Chinese gaming company Tencent was ordered to remove the blockbuster title from its PC gaming platform WeGame on Monday following "a large number of complaints" without further elaboration.

Latest News