Tencent's Profit Down 2% YoY for the First Time in 10 Years

Technology, Communication Author: EqualOcean News, Enoch Gao Editor: Luke Sheehan Nov 11, 2021 09:59 AM (GMT+8)

The drop was a result of regulatory crackdowns on media and restrictions on teenagers' gaming time.

Tencent group

Despite enhancing its parental control policy and constrained gaming time for teenagers (from 6.4% in Q3 2020 to 0.7% in Q3 2021), Tencent saw its domestic gaming service revenue increase by 5%, and 20% for the overseas markets. However,  Tencent's top moneymaker – mobile gaming – has seen its growth slow down for three consecutive quarters. 

A series of media crackdowns in China has been influential on Tencent's advertising income. The YoY revenue grew only 5% due to the political impact on industries, such as education and insurance. In addition to the latest regulatory change, media advertising revenue primarily from the Tencent news app has dropped 4%. 

Meanwhile, Tencent's free cash flow decreased by 14%.