Tencent Q2 results were huge, but future may not be all fun and games
In China there is such a thing as too much success when it comes to entertainment
China’s biggest social media and gaming firm by revenue saw both profits and revenue soar in the second quarter, up 70% and 59% YOY, respectively.
The world’s top-grossing mobile game, Tencent’s Honor of Kings, added to those stellar results, but also could be cause for concern. As the Tech giant’s mobile gaming business grows, so to does concern from China’s government – and public – around gaming addiction.
In an effort to preempt government restrictions on games, Tencent proactively instituted a restriction on Honor of Kings play by young players to one to two hours in early July. The move came after state media reported a 17-year-old gamer suffered a stroke following 40 consecutive hours playing the fantasy game.
A new scandal surfaced this month when an 18-year old man died just four days after his parents checked him into an internet addiction boot camp. The boot camps themselves have become a source of controversy, but their rising popularity highlights the public concern around internet addiction.
Tencent has a steady stream of revenue in games, but China is no stranger to heavy handed restrictions on entertainment, and “ensuring healthy development” of children has long been a priority of China’s censorship authorities. Beijing has also been wary of entertainment as a form of escapism, periodically banning subject matter such as time traveling from television dramas.
The old Chines proverb “people fear getting famous just like a pig fears getting fat” may be true of Tencent’s gaming cash cow as well.