Tencent, Asia’s highest valued technology company, posted a record quarterly profit of $2.7 billion (18.2 billion RMB) thanks to explosive growth from mobile games.
The firm’s profit in Q2 2017 rocketed 70 percent year-on-year on the back of the success of Tencent’s mobile games, particularly smash hit Honour of Kings which claims over 200 million registered users.
Honour of Kings, the world’s highest-grossing mobile game, helped the Tencent mobile gaming business eclipse total income from its PC gaming business for the very first time, growing 54 percent to hit 14.8 billion RMB, $2.2 billion. That mobile gaming figure represented a large chunk of Tencent’s overall quarterly revenues of 106.2 billion RMB ($15.7 billion) for the quarter — that figure is up 56 percent annually.
PC games were no slouch, pulling in 13.6 billion RMB ($2 billion) in revenue for the period. All in all, Tencent said its online games business grossed 23.9 billion RMB ($3.6 billion), with growth climbing seven percentage points to reach 39 percent year-on-year growth.
There is some uncertainty going forward, however, since Tencent began to limit how much time users aged 18 and below can spend inside Honour of Kings and other titles. The limitations were announced in July, and while CEO Pony Ma said in a statement today that they will “ensure users play games in a healthy manner,” it remains to be seen whether (and how) revenue will be impacted.
Outside of games, Tencent said its WeChat messenger app, which dominates China, was also a star performer. Its monthly active user count reached a new high of 963 million, although growth slowed from 34 percent last year to 19.5 percent.
Tencent doesn’t disclose how many of that WeChat userbase is based in China, where it offers a rich set of services that better monetizes users, while it is also selective with the financial information it reveals around the app. It did note, though, that WeChat advertising was a key factor in growing its social advertising business to 6 billion RMB ($900 million), up 61 percent annually.
Revenue for Tencent’s general online advertising business, which is anchored by its video and news services, was up 55 percent to 10.1 billion RMB, or $1.5 billion. Other revenue, which includes its aggressively-marketed cloud computing service and payment services, more than doubled to reach 9.7 billion RMB ($1.5 billion).