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Tencent remains the largest game company despite slowed profits
Chinese technology firm Tencent Holdings is not as well known as companies like Electronic Arts Inc or Activision Blizzard Inc, but over the last few years, it has quietly become the largest company in gaming thanks to a series of investments and acquisitions. While the company’s recent Q1 earnings have shown a significant slowdown in profits, Tencent does not look like it will lose its place at the top any time soon.
Tencent’s profits rose 6.6 percent in the first quarter of this year, far lower than the 50 percent increase the company saw in Q4 2014. Still, Tencent earned over $3.6 billion last quarter, and its advertising revenue has more than doubled.
Mr. Ma Huateng, Chairman and CEO of Tencent, said in a statement, “During the first quarter of 2015, we continued to expand our mobile user base and improve our engagement with users, while delivering solid financial results. Our key mobile properties extended their leadership in China and continued to broaden user activities from social and communications to gaming, entertainment, media content, payment, and beyond.”
Huateng continued, “Driven by mobile social and video advertisements, our total advertising revenue more than doubled year-on-year. Our Red Envelope gifting initiative spurred increased adoption of our payment solutions and boosted total payment volumes. Looking ahead, we aim to bring further technology benefits to users through our ‘Internet +’ strategy of connecting users with services in various vertical industries through collaboration with a broad range of partners.”
Tencent is a major player in multiple video game genres, especially mobile gaming. The company is also the majority owner of Riot Games, the developer behind League of Legends, which is one of the most popular PC games of all time, not to mention one of the most profitable.
Tencent also owns sizable portions of other large gaming companies such as Activision Blizzard, which publishes games like Call of Duty and World of Warcraft, as well as Epic Games, the developer behind the Gears of War franchise and Unreal Engine.
photo credit: 保安体育馆侧门 via photopin (license)
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