Tencent Holdings (0700. HK) pledged to cut expenses and improve efficiency when it revealed a first-ever dip in yearly revenue.
The world’s largest video game firm and operator of WeChat has suffered from China’s economic slump owing to the epidemic and a long-running regulatory crackdown.
Tencent’s 2022 revenue was 554.55 billion yuan ($81 billion), down 1%. Refinitiv estimates analysts predicted 555.15 billion yuan.
Earnings attributable to equity investors fell 16% to 188.24 billion yuan compared to the 114.19 billion yuan expected.
On a teleconference with reporters, Tencent Chair and CEO Pony Ma said the company would focus this year on “getting more out of existing core businesses” rather than “trying to do everything” and competing in “red ocean areas” with many competitors.
“We aim to focus our whole company management team and technology,” he stated. “This is crucial because we can see that focus and breakthroughs are critical to overall growth.”
After two years of regulatory repression in the world’s largest gaming market, sector participants are cautiously hopeful about a resurgence as authorities have started giving publication licenses again.
China requires regulatory clearance before releasing video games, unlike most other countries.
As regulators scrutinize monopolistic behavior and customer data handling, China’s digital titans operate under new restrictions.
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