So far, Tencent has been generating some of its revenue by offering mobile games through WeChat and QQ, and has added new advertising features to those social platforms.
In a note to clients last week, Barclays analyst Alicia Yap projected that revenue from WeChat’s sponsored feeds would reach about 1. 89 billion yuan this year and increase sharply next year to 10. 2 billion yuan to account for 42% of Tencent’s total advertising revenue.
Mobile games offered through WeChat and QQ generated 2. 9 billion yuan in revenue in the fourth quarter, rising from 2. 6 billion yuan in the third quarter but at a slower rate of growth than some analysts had projected.
Tencent’s revenue from online games, including those played on personal computers as well as smartphones and tablets, rose 41% to 11. 96 billion yuan in the quarter.Alan is the regular finance presenter on the ABC News and producer of the popular nightly graph (or two). Tencent Holdings Ltd. ’s 50% profit growth in the fourth quarter showed its continued dependence on online games.
At a news conference Wednesday, Tencent executives said China’s mobile-games market is still developing. “If you look at the number of players for mobile games, it’s actually much higher than players of PC games…but the percentage of people who pay is actually still quite small compared to PCs,” Tencent President Martin Lau said. “There’s still quite a bit of head room to grow.
Investors are hoping that Tencent will keep developing new sources of revenue on top of mobile games. “Mobile games’ growth is already priced in.
Still, Tencent recently shook hands with Alibaba when rival Chinese taxi-hailing companies Didi Dache and Kuaidi Dache, separately backed by Tencent and Alibaba, agreed last month to merge in a rare deal that brought together the two Internet giants. “We are competitors, and at the same time, we can be partners,” Tencent Chief Executive Pony Ma said Wednesday.
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