Tencent records a major drop in profit

Shenzhen-based tech giant Tencent Holdings Ltd. has recently reported surprisingly low profit numbers for the second quarter of 2018. While revenue grew 30 percent, the company’s net income fell two percent to around 17.9 billion yuan and badly missed analysts’ estimates of 19.3 billion yuan. The shockingly poor Q2 results came after a governmental freeze on new game approvals in China and controversy surrounding the forced removal of one of Tencent’s newly released games in August.

Tencent relies hugely on gaming revenues yet it looks like the very government that has endorsed Asia’s most valuable tech firm is now blocking its path to higher profits. Tencent was not informed about when the company can expect the game approval procedures to return to normal and is now talking about promoting its Chinese games abroad. The new strategies will certainly take some time and investment and so far they have not impressed the company’s investors resulting in Tencent’s stock losing billions of U.S. dollars in market value since January.