Gaming is a money-spinner for Tencent and is a major industry in Japan.
Pokemon Go, Image from Pixabay
Chinese Tech giant Tencent launches cloud services in Japan as globalization is a primary strategy for Tencent Cloud.
In 2019, Tencent Cloud's internationalization business aims to achieve a four to five times revenue increase compared with the same period of last year, said Da Zhiqian (答治茜), vice president of Tencent Cloud. The Japanese market will be the key market because of its high maturity and leading advantage in the gaming industry where Tencent has accumulated rich technical and operational experiences in the past few years.
According to Gartner, the worldwide public cloud services market is projected to grow 17.5% to a total USD 214.3 billion. Research vice president Sid Nag at Gartner said that "at Gartner, we know of no vendor or service provider today whose business model offerings and revenue growth are not influenced by the increasing adoption of cloud-first strategies in organizations."
China has a very unique standing at this market as Synergy Research Group indicated that it is the only country whose cloud is totally dominated by local companies, outside of the US. At the same time, Chinese companies are expanding into APAC markets.
Based on Q1 2019 revenue data, Tencent ranks the second in China's public cloud market, trailing Alibaba Cloud who takes almost half of the market, and ranks the fourth in APAC public cloud markets, after Amazon AWS, Alibaba Cloud and Microsoft Azure.
Gaming has been a money spinner for Tencent and a major industry in Japan.
For 2018, Tencent smartphone games business achieved CNY 77.8 billion (USD 11.3 billion) revenues despite a nine-month regulatory suspension of game monetization license. Because of the regulation issue, the game giant managed to diversify its businesses and grew its cloud revenues by over 100% to CNY 9.1 billion (USD 1.32 billion) for the year 2018. For cloud service, Tencent takes the dominant positions in games and video verticals due to its industry knowledge and solid infrastructure. It has served over half of the China-based games companies as of 2018.
Japan is the third-largest gaming market worldwide, as indicated by the games market research company NewZoo. So far, Tencent cloud business has partnered with Japanese companies such as Pitaya and E-business. The cloud infrastructure has covered 25 regions globally, with 53 applicable regions.