Tencent posts $2.7 billion profit for Q3 driven primarily by gaming

Tencent posts $2.7 billion profit for Q3 driven primarily by gaming
Sean Cleaver

By Sean Cleaver

November 15th 2017 at 10:40AM

A 61 per cent year-on-year growth in revenue has been down to mobile and PC games, along with sales and advertising

Tencent is already solidified as the highest valued tech company in Asia. However, its investments in gaming globally has helped the company smash analyst expectations by posting a total revenue of $9.8 billion, an increase of 61 per cent year-on-year, with profits of $2.7 billion.

The biggest reason? Gaming.

Investment in mobile gaming, such as its own development studios, and in PC gaming has been a primary driver of revenue. Mobile titles such as Honour of Kings and Kings of Chaos, which are both developed by the company have contributed to an 84 per cent year-on-year growth. PC games such as Dungeon Fighter Online and League of Legends helped a 27 per cent year-on-year growth. The gaming business was also backed up by digital content and online advertising in the Chinese region.

According to games industry analyst at Niko Partners, Daniel Ahmad, the total number of $4.95 billion in gaming revenue is more than Activision Blizzard, EA, Take Two and Ubisoft combined during the same time. 

"During the third quarter of 2017, we recorded strong business and revenue growth across multiple business lines including games, digital content, online advertising and payment related services," said Tencent CEO Ma Huateng. "In particular, our video platform gained audience and revenue market share, we believe it has become China’s top online video platform in terms of mobile daily active users and subscriptions.”

“We believe this success reflects our increasing investment in self-commissioned video content, our improved selection of licensed video content, and our scheduling and audience management initiatives... We believe our multi-faceted digital content businesses are synergistic with each other, and allow us to deliver unique content to our users.”

The company has recently announced an investment in Snap Inc, the owner of Snapchat, in which gaming and a partnership between the two companies could raise Snap's revenue.