Chinese tech giant Tencent has announced its third-quarter results, which saw its revenue declining for the second consecutive quarter.
Its revenue came in at RMB140.1 billion (US$19.7 billion) a decrease of 2% year-on-year, dragged down by its gaming and advertising business which has been impacted by the Chinese government’s crackdown of the local tech industry on the basis of “common prosperity”.
Tencent’s online advertising business fell 5% to RMB21.5 billion for the third quarter of 2022 on a year-on-year basis. Social advertising revenues decreased by 1% to RMB18.9 billion, which the company attributed to continued weakness in certain ad categories, excluding video in-feed ads.
Tencent also brought in lower advertising revenue from Tencent Video, after scrapping the release of multiple drama series, which saw its media advertising revenues decreased by 26% to RMB2.6bn.
On the other hand, Tencent said it saw increased demand for in-feed advertisements from advertisers, particularly from the FMCG category. Excluding Video Accounts, WeChat’s advertising revenue grew year-on-year, with growth coming from its Mini Programs.
For gaming, while Tencent’s international games revenues increased by 3% to RMB11.7bn, its domestic games revenues decreased by 7% to RMB31.2bn because of the gaming restrictions placed on children under the age of 18 by Chinese authorities.
As part of its plans to scale back loss-making activities and focus on internally developed products, Tencent will divest from food delivery platform Meituan by selling more than 958 million shares of Meituan, around US$20 billion to its shareholders.
The distribution will leave Tencent with a 1.5% stake in Meituan from 17% currently. Tencent president Martin Lau has also resigned from Meituan’s board as a non-executive director.