Tencent profits as gaming surges during COVID-19 pandemic

The gaming industry might face similar production challenges as film and TV, but revenues are surging and few are profiting more than Hong Kong’s Tencent.

With more than 70 countries and territories around the world under lockdown protocols to combat the spread of COVID-19, backgammon and scrabble can only get you so far to fight off the boredom. The Netflix earnings call confirmed millions more are signing-up for video streaming subscriptions, and SuperData is suggesting the gaming segment is also benefiting considerably from this unique predicament.

For the month of March, gaming revenues across the world exceeded $10 billion, the most profitable monthly period on record. Mobile gaming took the lions share of revenues, though PC and console gaming also saw material increases in digital revenues.

While the fortunes of this segment are quite evenly spread throughout the ecosystem and the world, it should be worth noting that Tencent, the Hong Kong-based internet giant, is profiting considerably. Not only does it own Honour of Kings, an immensely popular mobile game in China, it has a 5% stake in Activision, 5% in Ubisoft, 40% of Epic Games, 84% of Supercell and 100% of Riot Games.

Few can compete with Tencent when it comes to throwing weight around the gaming segment. Looking at the last quarterly statement, revenues from online games alone accounted for $4.3 billion, just under a third of total revenues.

Across the gaming segment, console revenue rose 64% from February to March, PC revenue increased 56%, while mobile gaming revenue was up 15% year-on-year to $5.7 billion. This is a segment which is often ignored by the traditional connectivity industry, though it is quickly growing. Aside from these numbers, the fact that Twitch, a video platform for gamers, has grown to 15 million Daily Active Users (DAUs) also demonstrates this.