A boom in online gaming during the global pandemic lockdown has given a big boost to Tencent Holdings’ (OTC:TCEHY) first-quarter revenue and profits.
The Chinese company’s video games business, which generates more than a third of its revenue, saw growth of 31% to $5.26 billion U.S. as people idled away the time in front of screens and used online multiplayer games to virtually hang out with friends.
Its flagship games "PlayerUnknown’s Battlegrounds" (PUBG) and "Honor of Kings" topped mobile games revenue globally in March, reinforcing Tencent’s status as the world’s largest video game firm by sales.
In-game spending on things such as power-ups, object skins and accessories on PUBG alone surged to $232 million, more than three times what the title generated a year earlier in March 2019. However, Tencent, a gaming and social media giant, warned that the business boosts it enjoyed during lockdowns will likely be temporary.
Global spending on digital games surged to $10 billion in March, the highest monthly total ever, according to Nielsen’s game data arm "SuperData." Tencent’s stock has jumped 14.38% this year, against a 15% decline in Hong Kong’s broader Hang Seng Index.
Tencent’s overall revenue jumped 26% to $15.24 billion in the quarter, while net profit rose 6%, with both ahead of the average analyst estimate, Refinitiv data showed.
The company said its group online advertising revenue surged by 32%. Social media advertising revenue grew 47%, highlighting a shift in behaviour as many people were confined to their homes.
