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Tencent restructures business for first time in six years as games regulations bite

Tencent restructures business for first time in six years as games regulations bite

China publishing giant Tencenthas restructured its business for the first time in six years as it faces off the Chinese government’s increasingly hostile attitude towards games.

The country currently has a freeze on approving new game licences for any developer or publisher. While many titles were approved before the current freeze, the current blockade has caused concern amongst investors.

Without licence approvals, Tencent has been unable to monetise one of China’s most popular games right now: PUBG Mobile.

It’s still making huge revenue from cash cows such as Honor of Kings and QQ Speed, but that hasn’t stopped the company’s valuation dropping by billions of dollars over the last year.

Concerns also include the new incoming regulations aimed at restricting gameplay times and the number of releases, as well as Tencent's rising debts.

Business shuffle

According to Reuters, Tencent will consolidate three content business groups into one unit, as well as form a new division for cloud and smart industries.

The latter is hoped to help the company focus better on its cloud services to better compete with rival Alibaba.

Its content business unit meanwhile will include services such as messaging app WeChat, music, games and other entertainment.

As part of the changes, Tencent stated its intent to “further explore the integration of social, content and technology that is more suitable for future trends, and promote the upgrade from consumer internet to industrial internet”.

Tencent also said it will create a new technology committee to boost its R&D efforts and promote collaboration amongst the disparate parts of its business.


Senior Editor

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

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