Tencent sees renewed growth in gaming and music, but loses ground in long-form video subscriptions.
Tencent, the entertainment, social media, and technology giant from China, reported renewed profits growth in Q1 2023, following its first decline in 2022. The reopening of China’s economy after COVID-19 lockdowns helped the company beat financial market estimates, generating overall revenues of $21.4 billion, up 11% YoY. Net profits reached $3.69 billion.
Tencent is the world’s largest gaming company in revenue terms and saw growth in that sector. While it also enjoyed growth in music subscriptions where it dominates the China market.
However, the company have may lost its position as leading streaming platform in China. as its subscription numbers decreased by 9% to 113 million, and subscription revenue declined by 6%. The primary reason behind the decline was delayed content releases. Tencent Video used to be the 4th largest streaming platform in terms of subscribers, after Netflix, Prime Video and Disney+.
Tencent acknowledged the situation and said it was improving its content to meet evolving user demands. Earlier in the week, rival streaming service iQiyi reported a surge in paid subscriptions. Adding 17 million new subscriptions to make it 128 million overall.
Tencent’s diversified portfolio of businesses, including gaming, social media, and music, helped it renew growth in Q1 2023. However, the company must address the challenge of declining long-form video subscriptions, which may impact its revenue in the future.