COVID-19 lockdowns buoyed Tencent’s first-quarter revenue and profits, with blockbuster games PlayerUnknown’s Battlegrounds Mobile and Honor of Kings helping it beats forecasts.
The Chinese company’s video games business, which generates more than a third of its revenue, saw growth of 31 per cent to $5.26 billion as people idled away the time in front of screens and used online multiplayer games to virtually hang out with friends.
Tencent’s two flagship games, PlayerUnknown’s Battlegrounds Mobile and Honor of Kings topped mobile games revenue worldwide in March, analytics firm Sensor Tower said. “We expect in-game consumption activities to largely normalise as people return to work, and we see some headwinds for the online advertising industry,” Tencent said, after reporting a revenue rise of 26 per cent.
In-game spending on things like power-ups, object skins and accessories on PUBG Mobile alone surged to $232 million, more than three times what the title generated in March 2019.
However Tencent, a gaming and social media giant, warned that it expected some of the business boosts it enjoyed during lockdowns to be temporary.Average revenue per user of Tencent’s mobile games jumped from 62.9 yuan in Q4 to 85.2 in Q1 as a result of limited offline entertainment options, Jason Zhou, an analyst with Guotai Junan Securities, calculated.
However, Tencent’s President Martin Lau said that in-game consumption was reverting to normal levels after the May 1 holiday as people began to return to work.