![]() ![]() A further headwind for Tencent’s gaming business relates to another of its big hits – PlayerUnknown’s Battlegrounds (PUBG), a massive multiplayer online game that Tencent has the rights to run in China but regulators have still not approved monetisation of the game. The monetisation problem refers to a crackdown from China’s regulators – last week, authorities stopped Tencent from selling its popular online game, Monster Hunter: World in China. Although daily active users (DAUs) increased, monetisation per user declined as users shifted time to non-monetised tactical tournament games, Tencent said. Tencent President Martin Lau said on the conference call that from “… a revenue growth perspective, gaming is a key area of weakness, our biggest game is not monetisable,” he added that while this was “… a little out of our control, … over time we’ll solve it.” Smartphone games revenue grew 19% YoY but declined 19% QoQ to CNY17.6bn. 40% of the Group’s total revenue, has come under intense scrutiny from China’s regulators impacting this crucial division. EPS came in at CNY1.89, below the CNY1.98 which consensus forecasts had predicted. ![]() $2.6bn) was also below the CNY19.6bn expected and represented a 2% YoY decline and a 23% QoQ drop (also its first decline since 3Q05). Revenue of CNY73.7bn ($10.6bn) came in below the CNY77.3bn Thomson Reuters consensus forecasts had expected and, despite being a 30% YoY rise, it was the firm’s slowest revenue growth since 2Q15. Tencent posted disappointing 2Q18 results on 15 August, which missed analyst expectations as increased Chinese regulatory scrutiny of its gaming business negatively impacted revenue.
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