Tech

Tencent Q2 and H1 2019 Financial Results: Mobile Games Perform Strong, Peacekeeper Elite Outside Top 10 Earners

Mentioned in this article

  • Tencent reported its interim 2019 financial results, with total revenues for H1 up 18% YoY and total revenues for Q2 up 21% YoY.
  • Total revenues for Q2 2019 increased to ¥88.8B RMB ($12.9B USD) from ¥73.7B ($10.7B) in the same period last year.
  • Peacekeeper Elite surpassed 50M daily active users (DAUs) in China and PUBG MOBILE exceeded the same threshold of 50M DAUs globally.

Today, Chinese multinational investment holding conglomerate Tencent has released its financial results for Q2 2019 and H1 2019 for the period ending on June 30. To date, Tencent has invested in excess of $2B into esports-relevant companies and has developed esports games such as mobile multiplayer online battle arena (MOBA) Honor of Kings and its international adaptation Arena of Valor, as well as the battle royale PUBG MOBILE and its adaptation Peacekeeper Elite for the Chinese market.

Total revenues for the first half of 2019 were ¥174.3B ($25.4B), up 18% YoY. Q2 2019 total revenues grew 21% YoY to ¥88.8B ($12.9B), up from ¥73.7B ($10.7B) in Q2 2018. Operating profit for the quarter increased 26% YoY to ¥27.5B ($4B) as Tencent improved its operating margin to 31% from 30% last year.

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Online games revenues grew by 8% to ¥27.3B, Tencent attributes the increase primarily to the revenue growth from smartphone games such as Honor of Kings and PUBG MOBILE. While Peacekeeper Elite launched strongly in Q1 2019, a Tencent representative stated in the earnings call that the game’s revenues are not in the top 10 of mobile games revenues reported in Q2 2019 due to a decrease in deferred revenues from season passes compared to Q1. Nevertheless, he pointed out that, “as you are probably aware the second quarter is seasonally a much slower quarter than the first quarter, and if you look at our history then historically game reported revenue and the deferred revenue have often declined quarter-on-quarter from the first quarter […] so the fact that this quarter both, our reported revenue and our deferred revenue increased quarter-on-quarter for the smartphone games is actually quite positive and encouraging.”

Furthermore, Tencent reported that Peacekeeper Elite surpassed 50M daily active users (DAUs) in China and PUBG MOBILE exceeded the same threshold of 50M DAUs globally.

In its earnings call, Tencent confirmed that it extended an existing contract with the NBA until the 2025 season. Part of the deal is a cooperation between the NBA and Tencent to develop NBA mobile games and esports events.

Tencent highlighted that League of Legends, a game made by wholly-owned Tencent subsidiary Riot Games, DAUs and average player time spent are benefitting from the release of the new game mode Teamfight Tactics in late June.

Note: The exchange rate used by Tencent for its financial report is the rate in effect as of July 24 at a rate of ¥6.8747 to $1.00. For the convenience of the reader, The Esports Observer used the same exchange rate for currency conversions in this article.




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