This afternoon, Tencent released its first quarter performance report in 2020. In 2020, Q1 Tencent's revenue was 108.065 billion, up 26% year on year; its net profit was 27.079 billion, up 29% year on year, higher than the market expectation.
According to the financial report,In the first quarter, Tencent's value-added service revenue increased 27% year on year to 62.429 billion yuan. Online game revenue increased 31% year on year to 37.298 billion yuan.
Smart phone games have strong performance in the Chinese market, including "peace elite" and "King's glory"; meanwhile, the contribution of overseas mobile games has increased year on year, including "pubg mobile" and "clash of Clans", etc。 But some PC client games, such as dungeons and warriors, have lost revenue.
The total revenue of smart phone games (including those belonging to Tencent's social network business) is 34.756 billion yuan. The revenue of PC client games is 11.795 billion yuan.
Social network revenue increased 23% year on year to 25.131 billion yuan, mainly driven by in-game virtual props sales, music and video subscription and other digital content services.
Tencent said,The game plays an important role in relieving users' worries and making them accompany each other, especially during the period of home epidemic prevention.
In terms of mobile games, Tencent's studio launched fascinating game content, and the distribution team also held wonderful in game activities, thus increasing the number of daily active accounts. For example, the upgraded King's glory game engine greatly improves the audio and visual quality of props in the game.
In addition, the new team playing method based on player positioning also effectively promotes user interaction.The cooperation between "peace elite" and rocket girl 101 (Tencent's idol girl group, from Tencent's popular variety show) is quite successful, which promotes the user's activity to reach a new high, and also shows the synergy effect of cross IP cooperation within Tencent.
In terms of personal computer games, due to the suspension of many Internet cafes in China during the outbreak, and the poor performance of "dungeons and Warriors", the domestic business was affected.
Looking forward to the future, Tencent expects that with the resumption of work in succession, the user use time and in-game consumption activities in the game industry will return to normal level, but Tencent also believes that the game industry has expanded its long-term audience and attraction structurally.