Tencent Holdings Limited (Tencent) second quarter earnings are boosted by online gaming revenue, which grew 40% year on year (YoY) to ¥38,288 million. The Chinese multinational conglomerate holding company attributes the increase to the exponential increase of mobile games both domestic and overseas markets.
Tencent’s total revenues were ¥114,883 million ($16,228 million), an increase of 29% over the second quarter of 2019 YoY.
The overall mobile phone games revenues were 35,988 million yuan and PC client games revenues were ¥10,912 million. Social networks revenues increased by 29% to ¥26,714 million. The company reported that revenue contributions were also boosted by social network revenues (29% YoY increase to 26.71 billion) because of the live broadcast services of HUYA Inc., a subsidiary, and music subscriptions growth.
“We achieved generally robust operating and financial results in the second quarter, testifying to the diligence of our teams and resilience of our business model,” said Ma Huateng, Chairman and CEO of Tencent in its financial results advisory. “We are committed to investing in talents, technology and platforms in a disciplined manner to embrace the emerging structural opportunities and challenges ahead.”
Apart from gaming, Tencent’s earnings also received a boost from digital content with significant contribution from its free-based video-as-a-service (VAS) subscription. Video subscriptions increased 18% YoY to ¥114 million yuan mainly driven by the popularity of the self-commissioned Chinese anime and drama series, such as “The Land of Warriors Season 3” and “Candle in the Tomb: The Lost Caverns,” among others.
Its music subscriptions rose 52% YoY to ¥47 million as Tencent Music increased the scope of the paid music library.
The fintech along with the business services division also grew by 30% YoY or ¥29.86 billion. The company said the increase is attributed to the revenue growth from commercial payment due to increased average daily transactions and value per transaction, from wealth management, as well as from cloud services as a result of greater consumption of our public cloud, particularly by the Internet services and municipal services sectors.
Online advertising, however, took a hit which the company points to weak brand advertising of its Tencent Video. It also said there were delays in content production and releases. Revenues from online advertising increased by 13% to ¥18,552. Social and other advertising revenues grew by 27% to ¥15,262 million.