Tencent reported a fall in income for the first time in history

Tencent reported a fall in income for the first time in history

China's tech giant Tencent reported a decline in revenues from the quarter for the first time in history, and its financial failures in the second quarter of 2022 linked the company to the tightening of Beijing's policy on computer games, as well as to the complication of the pandemic.

Tencent ' s loan in the second quarter was RMB 134.03 billion, with an annual drop of 56%, so the company failed to meet the expectations of either revenue or profit.

About a third of Tencent's income comes from the playing field, and there's no doubt that the government's impact on Beijing has been tightened. Other negative factors are macroeconomic: the multiple locodowns caused by the intensification of the pandemic, as well as the slowdown in China's economy – it was only 0.4% in the last quarter, failing to meet the expectations of analysts.

The contribution of official Beijing to the challenges of the Tencent game has proved to be quite significant in the recent past: between July 2021 and April 2022, regulators froze approval of new games, effectively banning the release and monetization of recent projects, and over the second quarter, the company launched only three mobile games, i.e., had to rely mainly on existing products. Tencent's loan from domestic games amounted to 31.8 billion renminbi during the reporting period, while revenues from major hits, including PUBG Mobile and Honor of Kings, declined.

In other areas of the breakthrough, Tencent did not succeed either, and the return from online advertising was 18.6 billion Yuan, which is a 1% increase, but the dynamics are smaller than last year.