- Tencent has reported $32.93 billion of revenue for 2021, despite the challenges presented by the situation in China
- The country had banned minors from playing video games for more than three hours a week, undermining Tencent’s business
- The company hopes to adapt by the end of 2022 and grow its revenues from its overseas subsidiaries and partners
Tencent’s 2021 revenue surpassed all of its competitors’ earnings but the company is still facing challenges in China.
Tencent Earned $33B in 2021
Tencent, a Chinese multinational technology and entertainment conglomerate, has reported impressive annual revenue of $32.94 billion. This number, reflecting the company’s 2021 results, represents almost 10% growth compared to 2020’s annual figures.
Tencent’s revenues surpass those of the biggest tech companies, such as Sony, Microsoft and Nintendo, by a large margin. For comparison, Sony earned $24.9 billion, Microsoft got $16.3 billion and Nintendo closed the year with $15.3 billion.
The main contributor to this revenue was the company’s premium mobile games. Tencent is the name behind many of the top titles on the mobile market, including PUBG Mobile (developed by the Tencent-owned Lightspeed and Quantum Studios), Brawl Stars and Clash of Clans (developed by the Tencent-owned Supercell studio).
Tencent also owns Riot Games, meaning that it also earned a lot thanks to the latter’s League of Legends and VALORANT titles. The latter will soon receive its own mobile version as well, which will likely provide a further boost to Tencent’s profits.
The Chinese Regulations Present a Huge Problem
Daniel Ahmad, a senior analyst at Niko Partners, shared a slide from a presentation about Tencent’s earnings, revealing that 26% of the company’s overseas revenues came from games produced by its subsidiaries and partners. Tencent’s plans envision upping that number to 50%.
Tencent’s growth has been impeded by its home country’s decision to crack down on underage video gaming. About a year ago, China prohibited minors from playing video games for more than three hours a week.
In an interview with CNBC, Tencent admitted that 2021 was a challenging year. The company said that it had to embrace the changes and implement measures to secure its sustainability in the long term. Tencent added that it hopes to adapt to the changes in Chinese law by the end of 2022.
It is without a doubt that a company like Tencent will manage to adapt to the situation. It is curious to see what solutions the tech giant will devise.