Tencent is best known in China for its chat products, QQ and WeChat, both of which are completely ubiquitous in the region. The success of these two platforms largely is due to a combination of their wide adoption and the size of their market. China’s population is near that of all of Europe combined. Last week Tencent announced a total revenue of RMB 151.9 billion (USD 21.9 billion) for the 2016 fiscal year, which was a nearly 50% increase over their income the year before. Most of that growth was from Tencent’s increased sales, as the company saw a 43% increase in their
Last week Tencent announced a total revenue of RMB 151.9 billion (USD 21.9 billion) for the 2016 fiscal year, which was a nearly 50% increase over their income the year before. Most of that growth was from Tencent’s increased sales, as the company saw a 43% increase in their sales over the same period.
The company hasn’t been idle in acquisitions, either, however, as they posted a 47% increase in their Q4 profits largely due to them finding new revenue streams in cloud services and payment systems. On the fiscal report, these show up as “other business” and saw an incredible 289% increase from where they were in 2015.
Historically, the most valuable market for Tencent is actually their games, however, which is part of the reason the business went out of their way to buy Riot Games, as League of Legends is extremely popular in their home country of China. Their online games revenue increases by 16%, and that profit was mainly driven by “PvP and RPG genre smartphone games”.
Why is all of this interesting to players of League of Legends? Because later in the report, Tencent specifically mentions eSports. The report says that the company “broadened user engagement with its major PC game titles via eSports, game video streaming, and game interest groups.”
The company manages all three of the biggest eSports titles in China, League of Legends, Dungeon & Fighter, and Cross Fire, a Counter-Strike clone that is extremely popular in the east. Because of their success with online games in the 2016 year, the company noted that the outlook for 2017 might be a bit more ambitious. They mentioned the addition of “new genre-driven PC games”, which can only be a good thing for fans of their already popular titles. The company has already announced that they are seeking a new USD 2 billion dollar loan that may be their next venture into the esports world, and their ventures tend to not be half-hearted, anyone who’s watched the LPL finals or watched MSI 2016 know that quite well.