China’s multinational conglomerate Tencent beat earnings forecasts in the first quarter of 2020 with total net revenues of $15.2 billion, up 26 percent from the same period of 2019, according to a press release.
The company posted a profit for the quarter of $4 billion, up 29 percent from last year, thanks in part to increased gaming revenue as people stayed home amid the global pandemic.
The numbers were better than what had been forecast, according to Variety, which cited a poll of financial analysts.
Online game revenue for the quarter was up 31 percent year over year to $5.3 billion, which the company attributed to domestic smartphone mobile games, such as Peacekeeper Elite and Honor of Kings, The Esports Observer reported. Gaming contributions also came from Tencent’s overseas titles, including PlayerUnknown’s Battlegrounds (PUBG) and Clash of Clans. Online gaming revenue growth was partially offset by lower revenues of PC client games such as DnF.
"As the world tackles COVID-19, our thoughts and hearts go out to all the people who are suffering from the pandemic,” said Ma Huateng, chairman and CEO of Tencent, in the release. “During this difficult period, we seek to provide online services that keep people connected, informed, productive and entertained.”
Revenue from social networks was up 23 percent year over year to roughly $3.6 million, primarily driven by in-game purchases and digital content services like music and video streaming subscriptions.
Revenues from online advertising increased by 32 percent year over year to $2.5 million. Social media advertising revenues grew by 47 percent year over year to about $2.1 million. Media advertising revenues dropped 10 percent due to lower revenues from video and news platforms, partially due to sporting events being suspended.
“The pandemic expedited the digitalization of people’s way of life...Tencent is very mature in the monetization of its current products,” Alex Liu, an analyst with China Renaissance, told Reuters. He added that more growth would come by way of new titles Dungeon and Fighter Mobile.
Social media and gaming are up amid the pandemic as people follow stay-at-home mandates but still seek social connections.