Tencent annouce Q3 profits, with PUBG mobile revenue increase

Yesterday, Tencent Holdings reported its earnings for the period ending September 30, Chinese multinational investment holding company. The organisation posted net income in the third quarter of 2018 at ¥97.2B ($13.9B), a rise of 21%.

The total revenues from Tencent’s online games increased to ¥28.5B ($4.07B) by 11% year-on-year (YoJ). Overall sales of mobile games rose by 25 million to 24.3 billion yen (€ 3.46 billion). The strong success of main domestic titles and rising contributions from international titles have led to growth.

“With the company call for Q3 earnings Martin Lau, President Tencent, we made encouraging progress in globalising our company especially in online games, where we have created, published and operated some of the most popular mobile games abroad, such as PUBG MOBILE and Call of Duty Mobile.”

Tencent 2019 PUBG Mobile
Credit @ The Esports Observer

The Company generated a net margin of 22% for the period which resulted in net revenue of ¥21B ($2.99B), down from ¥23.4B ($3.32B) for the same period the previous year. “International markets contributed a youth percentage of our game revenue in the quarter.” The net income is 2.15 yen ($0.30) for profit per share attributable to the Company’s holders.

In addition, Tencent’s leadership reflected on several economic trends in the gaming division of the business. They announced that the summer content update of the Peacekeeper Elite improved user engagement in China. Although the game contributes to the entire quarter’s cash receipts, deferred income recognition still takes place at the beginning. They also reported that Honor of Kings ‘ daily active users (DAUs) remain healthy and over the course of the period, more customers bought the season passes.

Internationally, in contrast to last year, PUBG MOBILE tripled its monthly average active user (MAUs). Tencent also created the Activision Blizzard Mobile Call of Duty title, which reached 100 M downloads just one month after its release.

Although income from mobile games has risen, sales from Tencent’s consumer PC games has declined 7% to 11.5B yen and 2% to quarterly ($1.64B). This is attributed to reduced sales from the popular fighting game DnF according to the agency. Offsetting this trend is the auto-battler mode Teamfight Tactics of the Riot Games League of Legends.

According to Tencent, the League of Legends has established worldwide leadership through the strengthened IP and engaged user base. Teamfight Tactics has improved the time spent by the League of Legends and has increased international revenue.