China’s Tencent posts forecast-beating Q1 revenue on gaming growth

FILE PHOTO: A man rides an electric bike past the Tencent headquarters in Nanshan district of Shenzhen, Guangdong province, China September 2, 2022. REUTERS/David Kirton

BEIJING China — Chinese internet giant Tencent on Wednesday reported a better-than-expected increase in first-quarter revenue, propelled by growth in gaming as the firm’s strategic drive into artificial intelligence deepens.

Shenzhen-based Tencent is the operator of China’s multifunctional app WeChat and a major player in the global gaming industry.

The firm also has a presence in cloud computing, entertainment and AI — the latter of which has seen a boost in interest among Chinese tech giants following the shock release of advanced chatbot DeepSeek this year.

Tencent’s revenue in the three months ended March 31 was 180 billion yuan ($25 billion), a filing to the Hong Kong Stock Exchange showed, up 13 percent compared to the same period last year.

The figure came in slightly higher than a Bloomberg estimate of 175.7 billion yuan.

In a breakdown of sales, Tencent said that revenue from domestic games increased 24 percent year-on-year, while international games saw a 23 percent rise.

Net profits also charted a moderate increase during the first quarter, the results showed, jumping 14 percent year-on-year to reach 47.8 billion yuan.

AI capabilities

“AI capabilities already contributed tangibly to our businesses, such as performance advertising and evergreen games,” the firm said in a statement.

READ: Tencent unveils new AI innovations and global solutions

Tencent added that it has ramped up spending on “new AI opportunities”, including integrated features within the WeChat app.

Chinese tech giants have been funneling resources into the competitive field of AI since the release of DeepSeek’s chatbot in January.

The little-known Chinese company caused a global stir because it appeared to have developed the chatbot at a fraction of the price of Western industry leaders such as the United States’s OpenAI.

Tencent this year began trialling its own AI model which it says can outpace DeepSeek.

READ: China’s Tencent sets up team to develop ChatGPT-like product, say sources

Tencent was among the tech firms caught up in a sweeping domestic crackdown that began in 2020 with officials calling off the massive, planned listing of Alibaba-linked fintech company Ant Group.

Beijing has signaled renewed friendliness toward tech firms in recent months, but broad restrictions on video game access for minors still stand.