Tencent recorded a sharp jump in games and social network revenue in the first quarter of 2020, as Covid-19 (coronavirus) lockdown measures in China increased use of its online services.
Net profit rose 6 per cent year-on-year to CNY28.9 billion ($4.1 billion) on revenue of CNY108.1 billion, up 26 per cent. Online Games revenue grew 31 per cent to CNY37.3 billion, with smartphones accounting for 68 per cent of this.
In a statement, the company predicted playing time and in-game consumption activity to return to normal as people go back to work, but it also believed there had been an expansion in the segment’s long-term audience and appeal.
Social network sales increased 23 per cent to CNY25.1 billion, attributed to higher contributions from in-game virtual item sales and digital content services, including music and video streaming subscriptions.
Revenue from its Fintech and Business Services group increased 21.5 per cent to CNY26.5 billion, while Online Advertising jumped 32 per cent to CNY17.7 billion.
Monthly active users (MAUs) on WeChat and Chinese version Weixin rose 8.2 per cent to 1.2 billion, while smart device MAU of instant messaging platform QQ dipped 1 per cent to 693.5 million.
Tencent warned of several likely industry-wide headwinds, including consumer time spent online normalising leading to lower advertisement impression growth, and online services advertisers adjusting their customer acquisition budgets.
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