Tencent’s mobile games revenue up 68% to $3.4 billion in Q1 2018

But investors concerned by historically low operating margin

Tencent’s mobile games revenue up 68% to $3.4 billion in Q1 2018

Tencent grew its mobile games business revenues by 68 per cent year-on-year to $3.4 billion for the three months ending March 31st 2018.

Revenue also grew 28 per cent quarter-on-quarter due to season promotion activities and new titles.

The Chinese publishing giant attributed much of its revenue growth to its mega-hit MOBA Honor of Kings (Arena of Valor), QQ Speed Mobile, CrossFire Mobile and MU Awakening.

Honor of Kings is said to still be experiencing double digit growing in the number of daily active users and continues to increase its revenues year-on-year.

The company also claimed that QQ Speed Mobile was the second highest grossing iOS game in China during Q1.

Elsewhere Tencent reported that its messaging app QQ had a monthly active users base of 805.5 million in Q1, while the combined MAU for WeChat and mini-games platform Weixin was more than one billion.

The publisher said the launch of these HTML5-powered mini-games, that work similar to Facebook Instant Games, had been a “significant success”. Over 500 titles have been made available on the platform to date.

Big figures, but are investors onboard?

Tencent’s overall revenue for Q1 2018 came in at $11.5 billion. This was up 48 per cent year-on-year and 11 per cent quarter-on-quarter.

Overall net profit for the period meanwhile was $3.76 billion, up 65 per cent year-on-year and 11 per cent quarter-on-quarter.

But while the numbers seem generally positive, what’s really upset investors is the expected drop of the operating margin. Investors were concerned over expectations that this would dip below 47 per cent for the period for the first time since 2003, and it in fact dropped to 42 per cent.

The concerns had led to $78 billion being knocked off Tencent's value.

The main point of contention is whether mobile can make up for PC’s decline. Revenues here were flat year-on-year at $2.2 billion, but up 10 per cent quarter-on-quarter. Active users however dropped as Tencent noted users were shifting to mobile.

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Senior Editor

Craig Chapple is Senior Editor of and He was previously Deputy Editor at Develop and Online Editor at Nintendo of Europe.