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Tencent announces positive 2023 first quarter financials

A tantalising glimpse into the goings-on behind the scenes at Tencent
Tencent announces positive 2023 first quarter financials

Chinese gaming giant Tencent’s revenue increased by 11% to 150 billion Yuan ($21.8bn) year-over-year in the first quarter of 2023, according to their latest financials.

Profit meanwhile stood at 33.4 billion Yuan ($4.9bn), an increase of 27% year-over-year on a non-IFRS basis. The financials for Tencent also notice a sharp uptick in their international games sales, of 25% to $1.8bn, mainly credited to Goddess of Victory: Nikke and Triple Match 3D, as well as the “robust growth” of Valorant. Domestic games revenue, however, was slower by quite a degree at only 6% growth, although still much higher in total than their international sales at $4.4bn.

The rapid rise in international sales reflects an effort by Tencent to diversify their overseas portfolio with new titles and investment, to combat the effects of a recently-ended licensing freeze in China. Whether this is to regain ground or in anticipation and preparedness for another potential licensing freeze is unclear.

Chairman and CEO of Tencent, Ma Huateng added his own statement on the company’s performance, “During the first quarter of 2023, we achieved solid revenue growth as our payment volumes benefitted from, and facilitated, domestic consumption recovery, our games revenue improved, and our advertising revenue sustained rapid growth. Our non-IFRS net profit increased at a faster pace, reflecting a positive revenue mix shift, operational efficiencies, and an easy base period.”

Naturally, there was also a mention of on-trend tech such as AI. “We are investing in our AI capabilities and cloud infrastructure to embrace the opportunities brought by foundation models, and expect AI to be a growth multiplier that enables us to better serve our users, customers, and society at large,” they write.

Tencent is back, baby

Compared to much leaner results in Q4, higher-ups at Tencent may be breathing a tentative sigh of relief at these latest financials. It indicates that not only is revenue increasing overall, but that even if the meteoric growth they once experienced domestically is no longer the case, that they’re not totally reliant on their new crop of exported titles.

It was certainly not expected that Tencent would stumble for long, given the size and resources available to the company. However, it’s clear that Tencent is looking abroad in the future, and judging by the growth they’ve experienced in that division, it may be that this is the future - for a Chinese company to be decidedly global in its approach.