You might know that last year, China suspended Tencent’s online games from the country. Apparently, the company has recovered a lot and paralyzed its core business. Obviously, the company still need to increase its investment to support revenue growth.
Back in December, China lifted suspension from Tencent and so far, the company managed to get NOC for eight games.
Apparently, it is more difficult to get games approved as regulators review thousands of games for possible unwanted content.
The company has been testing new technologies such as online payments and cloud programming, which are getting some attraction. However, the company will face some competition but still can make some profit as well.
Managing director of Hong Kong-based research firm Blue Lotus Research Institute, Adam Xie quoted:
“For its online games business, the worst is over, But spending will continue to soar because all its new ventures are money losing.”
Beijing-based games developer “Perfect World Games” licensed Perfect World, which is categorized as the latest driver for Tencent’s online games division.
Perfect World was launched in March. As per information from App Annie, apparently, the multiplayer role-playing games is ranked sixth in terms of most downloads in China iOS store.
Back in January, the company has also introduced new gaming packages for getting more from “Honor of Kingshas.”
According to the reports, China might approve more smartphone games including role-playing game JX III, Raziel, Ace Force, and Tencent’s mobile games.
It is estimated that Tencent’s revenue will grow almost 17% to 91 billion yuan in the current fiscal year.
Tencent’s most popular game, PUBG yet to get approval from the Chinese government but it is already available for download.
The Chinese media has shown their regrets over the title, being considered as violent. As the game requires players to finish each other lives until one of them survives till the end.
According to analysts, the role-playing games attract more players after their initial release but the ratio declines as a lot of players complete their level and reach the end.
A Shanghai-based analyst at market research firm IHS Markit, Cui Chenyu stated:
“Perfect World is beginning to drop already, It will still be a revenue boost in the next one to two quarters, but there are uncertainties in its life cycle.”
To support the increasing growth graph, Tencent is developing rapidly outside online games.
For now, the company is investing resources in cloud computing, digital payments, and entertainment.
It seems that Tencent is planning to give some hard time to its arch-rival Alibaba and steal some market share.