As one of the largest gaming companies in the entire world, Tencent has continued to grow with little interruption in the years since it went public. However, as China cracks down on gaming with strict regulations, Tencents Q3 2021 was one of the first areas where we’ve seen the company affected by the matter. Its recent quarter revenue experienced the slowest growth the company has seen since 2004 as it works to adhere to Chinese government regulation and restrictions.
Tencent posted its Q3 2021 earnings results on its investor relations website on November 10, 2021. According to the report, Tencent did experience a positive rise in the previous quarter, putting up a 13 percent increase in revenue over the previous quarter at $22 billion USD. However, this was below expectation and one of the lowest increases in revenue the company has seen since it first went public. It did, however, beat net profit expectations, putting up around $6.19 billion and a 3 percent increase against analyst expectation of decline in this statistic.
There’s little reason to wonder why Tencent’s growth was slowed. The financial results point to a multitude of efforts to adhere to government regulation as China has cracked down on gaming harder than ever throughout the previous year. It’s a factor that Tencent chairman and CEO, Pony Ma, addressed directly.
“During the third quarter, the internet industry, including the domestic games industry, and certain advertiser categories, adapted to new regulatory and macroeconomic developments. We are proactively embracing the new regulatory environment which we believe should contribute to a more sustainable development path for the industry.” ~ Pony Ma
It will remain to be seen if China’s ongoing regulation continues to affect Tencent further, but it also seems like the company is working to try to stay ahead of said regulation and ensure business continues even in spite of strict new laws. Stay tuned for further Q3 2021 earnings results reporting right here at Shacknews.