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How Tencent Conquered the Mobile Gaming Market

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In a recent financial briefing, Chinese investment giant Tencent revealed that its third-quarter net profit had increased by 30% when compared to the year before. Although many had expected the company’s financials to be stifled by the recent decision by the Chinese government to halt all game approvals (Tencent is a major force in its home country), it beat estimates in a big way.

Considering just how much the company is worth already, this is impressive to say the least. In a September, 2017 report by The Guardian, it was noted that Tencent is worth $500 billion. This means that the company is worth more than social media juggernaut Facebook. The company has also used its considerable revenue to get involved in all kinds of industries including social media (it has shares in Snapchat), the film industry, and, especially, in mobile gaming.

What Are the Biggest Tencent Mobile Games?

Tencent owns a majority stake in several influential gaming companies as well as minority stakes in lots of also sizeable firms meaning that it reaps rewards from the success of all kinds of mobile games. Although it does own stakes in non-mobile companies (such as League of Legends developer Riot Games), most of its gaming revenue seems to come from mobile games on iPhones (and Android devices). For example, Tencent owns a majority stake (84.3%) of Finnish mobile game developer Supercell. Supercell is responsible for tower defense game Clash of Clans, which has made billions of dollars from the sale of its microtransactions as the free to play title has made so much money from the sale of premium currency in the game. Its card-battling spin-off, Clash Royale has also made a substantial amount of money, reaching $2 billion in revenue in July 2018. Supercell’s flagship games are largely different but they have found success – and will likely continue to do so – because of their strong focus on multiplayer gameplay, something which is a massive draw to gamers on the go.

Tencent also owns an undisclosed majority stake in Miniclip, another mobile game developer that seems to pump out endlessly replayable titles. Miniclip is the studio behind games like Agar.io in which players control a blob that absorbs other players and grows in size, Plague, Inc. in which players use a made up disease to eliminate the global population, and Flip Diving in which players fling bendy avatars off of precarious ledges as they perform impressive dives. One of Miniclip’s games, 8 Ball Pool, had made more than $900 million as of 2017 so while these games may be simple, they’re raking in the big bucks for both the studio and its parent company.

What Else is Tencent Known For?

As a smart and valuable business, Tencent knows not to put all of its eggs in one basket which is why the company is involved in so many industries. Tencent also has its own social messaging app (QQ), its own rival to PayPal called Tenpay, a music streaming service called QQ Music, TV and movie production companies, and even its own real estate firm. A Betway report on millionaires becoming billionaires notes that Tencent’s co-founder, Ma Huateng, took just three years to go from a millionaire to a billionaire. He was just 36 when he reached that figure, far below the average age of 51. Huateng is now valued at $32.8 billion. It is because of the variety of Tencent’s investments that the company has been able to succeed.

The company seems to be at the forefront of new technology especially. Streaming music and video, mobile games and social media are all hugely important to the future of tech, as is AR or augmented reality and Tencent happens to be building an AR platform too. These are the services and platforms that most people use now and will continue to use, and Tencent is right there in the middle of it. Moreover, the company has its own versions of all of these platforms, allowing it to succeed in both China (where there are restrictions on foreign companies) and abroad. It gets to take a cut of the pie twice.

So while Huateng is valued at not far under $50 billion at the moment, expect that figure to rise soon. As Tencent continues to make strategic, forward-thinking investments in growing companies, there may be no limit to this company’s success.

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