Tencent’s headquarters in Shenzhen on July 10, 2022. (AFP/Archives/Jade GAO)
Chinese internet giant Tencent on Wednesday announced a 16% drop in net profit in 2022, weighed down by tougher regulations in China targeting the technology sector and video games.
The group, which notably owns the popular messaging application WeChat, made a profit of 188.2 billion yuan (25.3 billion euros) last year. It was 224.8 billion yuan in 2021 and had then increased by 41% over one year.
Its turnover for 2022 is down 1% year on year, to 554.5 billion yuan (74.7 billion euros).
After years of meteoric growth in one of the most dynamic and connected markets in the world, internet companies in China have been under pressure from the authorities since 2020.
The main tech players have been singled out for competition and personal data, after years of relative laxity, which has destabilized the sector.
Since 2021, the Chinese authorities have also imposed a drastic weekly limit of three hours of online video games for those under 18, to limit addiction among the youngest.
These restrictions had strongly weighed on the profitability of Tencent: the world leader in the sector had recorded in August the first decline since 2004 in its quarterly turnover.
Its relations with power now seem to have calmed down: after a year and a half of hiatus, the group has again been regularly obtaining video game licenses in China since November.
This sesame is mandatory to market a game on the largest market in the world.
Tencent is a key tech player in its country due to the omnipresence of its WeChat application (messaging, online payment, social network).
It is present on almost all phones in China and is used as a means of payment daily by hundreds of millions of Chinese, in a country where cash is becoming increasingly scarce.
© 2023 AFP
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