The world’s biggest gaming company reportedly feels its position is under threat

Tencent has reportedly expressed concern that it could lose its status as the world’s largest gaming company.

During Tencent’s annual meeting this week, co-founder and CEO Pony Ma said its gaming business, which accounts for over 30% of the Chinese tech giant’s revenue, underperformed in the face of stiff competition last year.

“Gaming is our flagship business… But in the past year, we have faced significant challenges,” Ma said, according to Reuters. “We have found ourselves at a loss, as our competitors continue to produce new products, leaving us feeling having achieved nothing.”

While older hits like Honor of Kings and PUBG Mobile continue to perform strongly, Ma reportedly said Tencent’s latest games haven’t lived up to expectations.

According to data published in November by research firm Newzoo, Tencent was easily the world’s largest publisher by revenues in the first half of 2023.

Despite a 3.6% year-on-year decline, Tencent’s gaming revenues during the first six months of last year totalled $15.4 billion.

That placed it well ahead of second-placed Sony ($8 billion) and third-placed Apple ($6.9 billion).

Microsoft’s gaming revenues would have totalled $10.4 billion if Activision Blizzard’s were included, but its acquisition of the Call of Duty publisher hadn’t been finalised during the period in question.

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Tencent and fellow gaming giant NetEase saw almost $80 billion wiped off their market value last month after China’s gaming regulator proposed new rules to limit spending in online games.

However, their shares recovered somewhat last week after the regulator removed the draft rules from its website, leading to speculation that they could be modified to be less restrictive to gaming companies.