Tencent has a major gaming problem

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Tencent buys 10% stake in Snap

The crackdown on on-line gaming in China is hurting Tencent.

The Chinese language tech conglomerate stated that its web revenue for the three months that led to June was 17.9 billion yuan ($2.6 billion), a decline of two% in comparison with the identical interval final yr. Income elevated to 73.7 billion yuan ($10.7 billion).

Income fell properly in need of what specialists thought. It was a uncommon miss for a corporation that has wowed buyers by routinely topping market expectations for gross sales and person progress.

Tencent (TCEHY) stated that income from on-line video games had dropped 19% from the earlier quarter to 17.6 billion ($2.6 billion), a swing it attributed a scarcity of gross sales from widespread tactical match video games and the timing of latest recreation releases.

The proprietor of messaging platform WeChat, which has greater than 1 billion customers, has struggled to safe approval from Chinese language regulators to monetize a few of its hottest on-line video games.

Associated: This South African firm guess on Tencent in 2001. It paid off massively

Shares in Tencent dropped greater than three% on Tuesday after Chinese language regulators banned a recreation known as Monster Hunt World for which massive gross sales had been anticipated. Shares dropped one other three.6% in Hong Kong on Wednesday earlier than the earnings had been launched.

The corporate stated in a discover to gamers that stated some recreation content material “doesn’t absolutely adjust to the rules, and the federal government regulator has obtained a lot of complaints.”

One other recreation, Honor of Kings, has come beneath significantly intense scrutiny. A carefully watched Communist Get together newspaper publicly chastised Tencent final yr over the sport, claiming it brought about dependancy in younger individuals.

CNNMoney (London) First revealed August 15, 2018: 7:25 AM ET

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