"Tencent posted total revenue of RMB 80.6billion ($11.7million) for the third quarter with a yearly growth of 24%. Advertising, cloud service and video subscriptions have become Tencent’s main revenue growth driver while its games business suffered revenue loss under stricter regulations by authorities in mainland China to limit negative impact on children."
https://technology.ihs.com/608038/t...revenue-streams-replace-games-to-drive-growth
Which is precisely what is driving their expansion into international markets:
Tencent And Netease Mobile Game Revenue Rose 382% This Year (Analyst)
Variety said:
“Tencent and NetEase have begun to build a stronger international franchise for their games in response to the regulatory environment in their domestic market,” said IHS Markit games research and analysis director Piers Harding-Rolls. “However, even with this stronger focus, in the opening nine months of 2018, direct international revenues from mobile games represented only 3% of the companies’ total mobile games revenue. Both companies still have a mountain to climb to derive meaningful revenues from international markets to offset slowing growth in mainland China.”
NetEase reportedly accounts for 72% of the combined company revenue growth, which underlines Tencent’s limited success in exporting games to international markets, IHS Markit said. “Arena of Valor” is popular in Asian markets but has failed to catch on with Western audiences. “PUBG Mobile” has fared better, yet it represented just 2% of Tencent’s overall mobile games business in the third quarter of 2018.
PUBG Mobile and
Arena of Valor happen to be two of the five biggest eSports on mobile platforms (these are
Clash Royale, Turbo Racing League, Arena of Valor, Vainglory, and
PUBG Mobile...
Hearthstone may be bigger than all of these, but not from its mobile eSports presence). Additionally,
Fortnite will leapfrog past every game except for
Dota 2 in terms of
all-time payouts with its
$100 million in total prize money for the 2019 World Cup, and will easily become the most lucrative active eSport (
Dota 2 paid out $41.3m in 2018).
Also, while we're nitpicking...
https://www.gamesindustry.biz/artic...revenues-drop-but-daily-users-are-on-the-rise
Online games revenue decreased by 4% to $3.7 billion for the period, with a modest increase from mobile unable to offset the tumbling PC revenues.
The continued success of Honor of Kings in China, and Tencent's international portfolio, saw smartphone revenue grow 7% year-on-year and 11% sequentially to reach $2.8 billion for the period.
PC game revenue took a hammering though, falling 15% year-on-year and 4% sequentially to $1.7 billion
If that was down in 2018 this means Tencent did $1.95bn revenue on PC gaming in 2017. So
Statista tells me in 2017 Steam's gross worldwide game sales equaled $4.3bn, and Valve took a 30% split that year (it's as low as 20% now for bigger games since the new revenue-sharing agreement more favorable to developers Valve stipulated in November). This means Valve made
$1.3bn in 2017.
Meanwhile,
Valve is preparing to launch an official Steam client in China...which any sensible reader will interpret as a prelude to China cracking down on their uncensored, unofficial presence in the country that is already dwarfed by companies like Tencent, there, so I'm not sure where you're hanging your hat with these figures. Tencent is already way out in front, and Steam hasn't even been swatted with China's great regulatory ping-pong paddle, yet.
(1) Steam is finally coming to China… but gamers think it’s dead on arrival
(2) Valve gets closer to officially launching Steam in China
VG24-7 said:
Steam is poised to have a massive user base in China, one of the biggest markets in the world. It already has
over 30 million users, a figure which will no doubt grow once the localised version officially launches.
It remains to be seen, however, if the international version will continue to be accessible after that.
Part of the reason why Steam is so popular in China today has to do with censorship and the availability of games on the store. If the government-sanctioned version of Steam only supports pre-approved games, it may hurt its growth potential.
China has a beautiful 3-point plan, here.
- First, they are going to force Steam to partner with a local corporation so they can plunder as much IP as possible from their digital infrastructure.
- Second, in doing this, they are simultaneously going to force Steam to neuter its platform which potentially won't just slow its growth in China along with companies like Tencent and Netease, but very likely could depress its presence.
- Third, they use what they learn to expand more aggressively into the western markets with their own digital store that conforms to less regulated western laws.
Meanwhile, they're highly diversified, and they're quite active in development, so unlike Valve, they aren't wholly dependent on revenue from games licensing.
But more important than all of this is that they also aren't married to the PC. Kids who have grown up on smartphones don't give a shit about Linux or Windows. The Steam of the future will be dominated by mobile revenue even if it also includes Linux/Windows content. That is how you drink the milkshake of a monopoly. You change the board. After all, with the rise of set-top boxes that run these mobile operating systems, it's only a matter of time before terms like "desktop" become semantic. Kids with have controllers and KB+M gaming on NVIDIA Shields or Apple TVs.
This isn't a "box". Unlike the consoles Sony and Microsoft sell at a loss, with their walled gardens, you can't hope to dominate this landscape if you don't accommodate the dominant global operating system...and that is undoubtedly set to be Android.