Tencent reported revenue declines across its international and domestic divisions. As a result of missing quarterly revenue estimates, the company announced a round of layoffs, the first in a decade.
The Chinese tech giant Tencent has released its financial results for the second quarter of 2022 reporting a decrease in revenues of its international and domestic game divisions.
The total revenue of the company in the quarter amounted to RMB 134 billion (about $20 billion), down 3% compared to the same period last year. Tencent also saw a decline in its operating profit – it decreased by 14% to RMB 36.7 billion ($5.5 billion). Profit for the period amounted to RMB 29 billion ($4.3 billion) which reflects an 18% decrease from Q2 2022.
International Games revenues decreased by 1% to RMB 10.7 billion ($1.6 billion). The Domestic Games division saw a revenue decline of 1% as well and amounted to RMB 31.8 billion ($4.7 billion).
Tencent explained that the revenue drops in its International Games division were caused by the fact that the entire industry "experienced a post-pandemic digestion period."
In terms of titles, the company saw decreased revenues from such titles as PUBG Mobile and Brawl Stars, while VALORANT retained the "robust performance" in the quarter and the newly-launched V Rising which was released in Early Access delivered "incremental revenues" as it sold 2 million copies.
Speaking of its domestic segment, Tencent attributed declines in its revenus to simial digestion period. Such titles as Honour of Kings, Moonlight Blade Mobile, and League of Legends, saw decreased revenues, while some recently launched games including League of Legends: Wild Rift, Return to Empire, and Fight of The Golden Spatula grew revenues.
As a result of missing quarterly revenue estimates, Tencent announced a round of layoffs, for the first time in a decade. According to Bloomberg, the company employed 110,715 people at the end of June which is nearly 4.7% down from what was reported at the end of March.
In the last quarter, Tencent cut nearly 5,500 employees and also froze recruiting for the first time in ten years as a measure of cost-cutting. Meanwhile, a number of global tech companies such as Apple, Google, and Meta, also took measures to cope with a potential crisis including cutting their budgets and decelerating hiring.
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