Global tech giant Tencent Holdings is facing challenges in its video games business, according to CEO and co-founder Pony Ma. Read on to learn about the insights from Tencent's CEO.
Tencent Wary of Gaming Industry Players
Tencent Games are Not Performing Within Expectations
Tencent CEO and co-founder Pony Ma spoke at Tencent's annual meeting in Shenzhen on Monday and acknowledged that the company has been complacent in the gaming sector, according to news agency Reuter. "Gaming is our flagship business...But in the past year, we have faced significant challenges," Ma said, "We have found ourselves at a loss, as our competitors continue to produce new products, leaving us feeling having achieved nothing."
Ma's remarks at the Tencent meeting reportedly highlighted concerns about the company's ability to secure its position as China's leading tech company amid growing competition. Tencent's gaming sector accounts for more than 30% of its total revenue, and Ma declared that this sector has underperformed while competitors have successfully launched new and popular titles.
Tencent faces strong competition from industry players such as Sony, Apple, and forerunner Microsoft, especially following Microsoft's acquisition of Activision-Blizzard. While Tencent remained the world's largest gaming publisher by revenues in the first half of 2023, with $15.4 billion, there was a year-on-year decline of -3.6%.
Game titles like Valorant, developed by Tencent subsidiary Riot Games, PUBG Mobile, and Goddess of Victory: NIKKE contributed to Tencent's revenue growth. However, Ma noted that recent gaming products from Tencent have not met expectations, particularly when compared to successes from other Chinese game developers like miHoYo's Genshin Impact.
Tencent is Making Strides with AI
Meanwhile, with regard to AI, Ma mentioned that Tencent has caught up with leading companies. "We can finally follow the pace of the first-tier companies. We don’t count ourselves as the most leading but at least we are not too behind," the CEO said, according to Reuters.
Tencent looks to integrate its Hunyuan AI model into various business scenarios "to boost efficiency rather than to quickly turn AI into products." It was also previously reported that Tencent has partnered with Nvidia to use the expansion to Nvidia's Ace Platform, "Ace Production Microservices," which can generate fully interactive NPCs using AI.
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Tencent chief says gaming business under threat, catching up in AI
The world’s biggest gaming company reportedly feels its position is under threat
Newzoo data analysis report
