Tencent announces third-quarter financial data: Government restrictions affect company

Chinese technology company Tencent has released its third-quarter 2021 financial results for the period ending September 30, 2021.
Tencent’s local revenues were also affected by the regulations in China.

Technology giant Tencent continued to grow globally in the third quarter as well. While the company’s global gaming revenues have increased by about 20%, the situation is a little different in local revenues.

The company’s revenues reached approximately $1.7 billion in the global market, with an increase despite rival companies and games. Tencent, which has grown by one-fifth globally, has been stuck with government restrictions on local growth. By the third quarter of 2021, the company had only 5% local growth, and local revenues reached $5.2 billion.

On the subject, Tencent CEO Ma Huateng made the following statements:

“We are proactively embracing the new regulatory environment, which we believe should contribute to a more sustainable development path for the industry. In the domestic games market, our industry-leading efforts in fully complying with new regulations significantly reduced minors’ game time and spending, fostering a healthier gameplay environment.

We also invested actively in key strategic areas, as well as in frontier technologies, along with making new commitments in common prosperity initiatives. Looking forward, we are committed to delivering superior experiences to users, assisting enterprises to digitalise their operations and contributing to the society at large.”

Tencent CEO Ma Huateng.
Tencent CEO Ma Huateng.

In China, several legal regulations have been made, especially for young players. After the regulations, many companies developed new practices against the bindingness of the laws. Tencent made the following statements regarding this process:

“Starting from 1 September 2021, we have implemented new measures to fully comply with the latest regulations on restricting minors’ game time in China. Minors accounted for 0.7 percent of our Domestic Games time spent in September 2021, significantly declining from 6.4 percent in September 2020.

In terms of our Domestic Games grossing receipts, minors accounted for 1.1 percent in September 2021, significantly declining from 4.8 per cent in September 2020. We continued our industry-leading efforts in combating minors’ usage of adult accounts; for example, we upgraded our screening system to identify misused accounts.”

As you can see, the technology giant Tencent has determined its stance after local regulations. Although these regulations directly impact revenues, the company is in favor of the social benefit. This amount of revenue loss does not seem to be a problem for Tencent, whose name we frequently hear in the investment tours it leads and in recent acquisitions.

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts