Gamers Drive Tencent Profits Higher

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Tencent has been riding the crest of a gaming wave that seems determined to roll on forever. It departed 2014 with 37% year-on-year growth and Sony and Microsoft choking in its dust. Latest news from Bloomberg is its net profit leapt 7% in the 1st Quarter of 2015 to an astounding $1.1 Billion. The Shenzhen-based company’s success is partly due to a raft of hard-core smartphone gamers being unable to put its latest titles down.

gamersChairman Ma Huateng’s Investment Pays Dividends

In 2014 Tencent went on a $5.8 Billion fishing trip that hooked new stakes in online shopping, travel service and fresh amusements designed to appeal to gamers. Then Ma Huateng added broadcasts and movies to the package, and dipped his toe in selling advertising space on QQ and WeChat.

According to an analyst at Daiwa Securities Group Tencent emerged as a key player on the mobile side. “The two key metrics that people were looking at were mobile game and mobile advertising,” the consultant added, suggesting they touched accurately on gamers’ smartphone buttons.

Breaking News on WeChat Advertising Initiative

Tencent rolled out the advertising program with a limited number of branded advertisements. These tested the market out and developed case studies with demonstrable ROI. Now China’s second-largest internet provider is working on standardised formats. These will help advertisers develop faster copy and scale their own and Tencent’s business up.

Drivers Behind the Surge of Mobile Gamers

Two mobile smartphone games helped spur Tencent’s online sales by 28% in the quarter just reported. These were Carrot Fantasy 3 – a fantasy-theme tower defence challenge – and Blade Saga in which gamers dare to save the world from disaster. The company is rolling forward on a number of fronts, and seems ready to take on its competition as enthusiastically as its loyal hard-core gamers.

 

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Social Brand Watch (SBW) is a collection of experts in digital, mobile and social media in China. SBW was created to complement Resonance's China Social Branding Report, a bi-weekly report focusing on modern marketing methods of the world's top brands in China.

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