Tencent Is Having Difficult Times Due To The Chinese Economy

Tencent, the producer of PUBG Mobile and Call of Duty Mobile, one of the most popular mobile games in the world, is also the producer of League of Legends and Valorant. Owner of Riot and owns 40% of Epic Games. The company is also China’s two largest social media outlets. WeChat and Tencent owns QQ.

As such, Tencent is among the largest companies in both China and the world. It is also known that Tencent also provides technology support to the Chinese government and the UK government. However, it seems that the company has been struggling to recover financially lately.

The stagnating economy in China hit Tencent hard

Announcing its earnings in the third quarter of 2022 recently, Tencent compared to the previous quarter. announced that they made 2% less profit. In addition, officials who stated that they earned 2% less compared to last year, attributed this to the economic negativities in China. Tencent, which prepares the majority of its projects specifically for China and earns its main income from China, said that the negative economic conditions in the country affected them and He explained that this situation is also reflected in his products.. Of course, 2% less profit may not mean much at first glance, but Tencenti A company that spends almost all of its profits on R&D studies Even this 2% difference affects the company deeply.

Tencent’s social media and video platforms took action to minimize the decrease in revenues with more aggressive advertising policies due to these negative aspects. Although users are not satisfied with these new advertising strategies, Tencent He also promised that they will establish a more user-oriented advertising system in the future..

The quality of the games is also declining.

In addition, Tencent’s special offer for China “Honor of Kings” and “Peacekeeper Elite” is among the company’s major sources of income. Thanks to Chinese players who like to spend money on in-game purchases, the company millions of dollars every year (claimed to have made $1.7 million from in-game spending alone in 2021) he earns only from in-game spending. However, these purchases have reached almost zero in the past months.

In addition, PUBG Mobile, which the company offers worldwide, Call of Duty MobileGames such as League of Legends Wild Rift also receive delayed updates, problematic updates, and even started to lose users due to vulnerabilities in the anti cheat system. According to industry experts, the only reason these games are neglected is because Tencent is currently struggling with financial problems.

The CEO of the company stated that they will not have any financial problems in 2023 and that they will expand the company even more. announced that they will make users happy with new projects not only in China but all over the world..