On the 17th, Tencent announced the second quarter of 2022. Tencent’s total sales decreased by 3%, and operating profit fell 55% compared to the same period last year. It is the first time since the listing has declined.
According to the disclosure data, Tencent’s sales in the second quarter of 22 years recorded 13.33 billion yuan (25.96 trillion won). The number decreased by 3% year-on-year, and operating profit was 18.6 billion yuan (3.6 trillion won), down 55% from the same period last year. It is below the forecasts of many securities analysts.
Domestic sales in the second quarter were 31.8 billion yuan (KRW 6.15 trillion), down 1% from the same period last year, and overseas sales were 10.7 billion yuan (KRW 2.70 billion), down 1.4% from the same period last year. The game business accounts for about one-third of Tencent’s total sales.
Tencent’s quarterly accessories seemed to have influenced the deterioration of internal and external situations, such as the slowdown in economic growth in China, the regulation of Chinese authorities’ big tech companies, the blockade of the authorities of the corona 19 reconfirmation, and the global inflation.
First, in 2022, the Chinese economy grew only 0.4% in the second quarter. Many experts and foreign media analyzed that low growth rates affected Tencent’s fintech, cloud and advertising businesses.
The government’s regulations on big tech companies are also significantly influenced. In September 21, the Chinese government announced a strong regulation on the use of games by minors, and temporarily suspended the issue of the issue. The issue was resumed in April 22, but it does not give a big game for large game companies such as Tencent and Netize.
In July 22, he was penalized for 6 million yuan (1.1 billion won) because he did not report his past transactions to Tencent. It is an interpretation that Chinese authorities are part of antitrust regulations that are being conducted for ‘big tech companies’.
The end of the game world corona special, which peaked in 2021, also affected. Many overseas game companies, including MS, SIE, Nintendo, and Sony, have also announced the same quarterly results. At that time, many companies and experts explained that the costs of people spending on games are decreasing due to the influence of endermic and recession.
Tencent is restructuring and is stepping out of the non-main power business. From March to June, about 5,000 people were dismissed and welfare was reduced. In June, the company closed its game streaming site ‘Penguin e-Sports’. In July, the company announced that it will terminate the mobile version of the game platform ‘Wi Game’. In addition, the company announced the suspension of the operating V-Log apps and news apps.
Tencent explained, We have been able to withdraw from non-main power in the second quarter, tighten marketing costs, and reduce operating costs to increase the non-IFRS returns sequentially.
