Tencent in solid Q3 earnings, thanks to strong domestic gaming performance

Tencent Holdings, the Chinese gaming and social media giant, reported an 8% year-on-year revenue gain to $23.2 billion during its Q3 period as it extended its gaming growth momentum.

The company in a statement said it delivered robust revenue growth in its gaming business due to new games contributions and evergreen games.

Domestic gaming buoyed performance for Tencent

According to Tencent, domestic gaming revenue rose 14% to $1.84 billion which is greater than the previous quarters’ 9% growth and marking two straight quarters of growth after declines.

The summer release of Dungeon & Fighter Mobile during the quarter to September helped the tech giant cope with the economic downturn in China, making the firm deliver an above-expected performance.

The Chinese gaming behemoth also released the PC hit Black Myth: Wukong, which further reinforced its reputation as an industry leader, helping it anchor a popular lineup of games at the same time rivals NetEase Inc and Mihoyo also had new offerings.

A net income of 53.2 billion yuan or $7.4 billion for the quarter was ahead of projections. The company also noted the growth of AI in its operations and its contribution to revenue despite a slow uptake in AI services in China.

Tencent said fintech and cloud services reported modest growth of 2% to $7.35 billion, despite the decline in the payments business due to weak consumer spending in China.

Like many other Chinese tech firms, the company has deepened its AI push over the past two years, building out computing services for users to train and deploy language models.

“We are increasingly seeing tangible benefits of deploying AI across our products and operations including marketing services and cloud, and will continue investing in AI technology, tools, and solutions that assist users and partners,” the company stated in the report.

This comes after Tencent in June 2020 said it planned to pump $69.9 billion into new technology and infrastructure. Tencent’s senior executive vice president, Dowson Tong, at the time, told Chinese state media that the company planned a 5-year spending on cloud, AI, blockchain, data servers, and 5G network, among other things.

Tencent said its mission is to enhance the quality of human life through internet services, and AI enables them to do this in powerful ways. The goal is to apply AI to products and services that will make the benefits of AI accessible to everyone, everywhere.

“We believe AI has tremendous potential to improve productivity, increase business agility, enhance customer engagement and accelerate product innovation.”

– Tencent

We aim to help enterprises achieve digital upgrade by applying advanced technology, a deep understanding of connections and user behavior, and our ecosystem to create AI breakthroughs that can solve business challenges,” added the company.

Tencent pushes for AI and cloud services

In September 2024, at the Tencent Global Digital Ecosystem Summit, the company unveiled a number of cloud and AI offerings. The company also introduced a full suite of computing, storage, and AI Infra, a networking solution designed to embrace large model development and training.

It is reported that the company’s Cloud AI Coding Assistant, powered by Hunyuan is used by more than 50% of Tencent programmers, enhancing productivity by 40%. Tencent Meeting now has an AI Assistant, multilingual translation, and supports over 15 million users monthly.

Besides introducing a new suite of AI and model training products and services in China, Tencent Cloud International launched Palm Verification technology and an accompanying ecosystem plan in the international market to increase the traction of secure, AI-enabled authentication.

Additionally, several other AI-enabled products were unveiled for the international market such as Knowledge Engine Platform, Digital Human, e-KYC, and more in order to empower enterprises in the AI era.

In November the company said it was planning to invest $500 million for a third data center in Indonesia. The investment is part of Tencent’s partnership with GoTo Group and Alibaba Group to bring cloud infrastructure and training to the country.

Earlier this year, Tencent announced that it would be expanding its cloud business in Saudi Arabia and the UAE.