Chinese web giant Tencent has reported 26 percent growth for Q1 2020, with the novel coronavirus helping things along because customers hunkered down to play its games while in lockdown.
Revenue for the quarter hit US$15.25 billion and profit was $3.95 billion, year on year increases of 26 percent and 29 percent respectively.
If you’ve ever worried about the reach of Facebook or Google, Tencent’s results demonstrate that China’s web giants go even further by pointing out that a Tencent-controlled pop group called Rocket Girls 101 that emerged from a Tencent-run talent show called Produce 101 did a cross-promotion with a Tencent gaming product called Peacekeeper Elite. The result was called out for “driving user engagement to a new high and demonstrating cross-IP synergy within Tencent.”
The company saw increased engagement across gaming, messaging, content and other online services as punters stayed at home during coronavirus lockdowns and turned to internet entertainment. Even advertising revenue increased, but the company warned that was probably due to brands realising potential buyers were spending more time online and that similar growth is not likely in future.
$774 million found its way into capital expenditure for the company’s cloud, partly due to spending on servers to keep up with demand for the company’s videoconferencing services. Execs said Tencent Cloud is now China’s number two by market share and is steadily winning new clients while anticipating increased demand as the work-from-home-because-of-coronavirus experience translates into more use of cloud services.
“Looking forward, we expect the cloud industry to remain challenging in the short term,” investors were told. “However, we will continue increasing our investment in these areas and expect to see accelerated cloud services and enterprise software adoption from offline industries and public sectors over the longer term.” ®