Tencent posts better-than-expected 47% profit surge as games, AI tools shine
Chinese gaming and social media giant Tencent on Wednesday reported profit above analysts' expectations, while revenue missed slightly.
Tencent reported profit attributable to shareholders surged by 47% year-on-year to 53.23 billion yuan ($7.37 billion) in the third quarter, compared with an LSEG estimate of 46.18 billion yuan for the period.
The company's revenue rose by an annual 8% to 167.19 billion yuan, short of the 167.82 billion yuan analyst forecast.
Gaming remained the company's backbone, with the unit's domestic revenue up 14% year-on-year to 37.3 billion yuan, while that for international games shot up by 11% to 14.5 billion yuan on a constant currency basis.
The company noted that existing and new games had "evergreen potential."
Marketing services revenue, previously called online advertising, surged by an annual 17% to 29.99 billion yuan, making it one of the fastest-growing categories outside gaming. Tencent attributed the growth to "robust advertiser demand" for its short-videos, mini programs and search features within its messaging app — called Weixin in China and WeChat overseas.
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with AI tools improving they can develop so many games far better than the ones they already have and that means more money for them. But the competition will rise because the AI tools will be used by other companies too