Tencent's performance suffered a low point due to factors such as the game's cold winter. In the first quarter of this year, Tencent's revenue was 85.465 billion yuan, a year-on-year increase of 16%, and the chain growth was only 1%. Since the third quarter of last year, its net profit growth under non-GAAP has been below 15%. Now, after more than a year of strict supervision, the game industry has shown a strong recovery, and Tencent's game business has regained its vitality.
It is also worth noting that in the last quarter's earnings report, Tencent disclosed financial technology and corporate service revenue separately. The revenue for the quarter was 21.789 billion yuan, a year-on-year increase of 44%. In the second quarter, this part of the business revenue of 22.888 billion yuan, a year-on-year growth rate of 37%. For Tencent, which embraces the industry's Internet and launches its B-side business, financial technology and corporate services are becoming a stable source of power for the company's performance growth.
The game is no longer a problem
On July 30th, gamma data released the "2019 China Game Industry Semi-annual Report". The data shows that in the first half of this year, the actual sales revenue of the Chinese game market was 116.31 billion yuan, of which the actual sales revenue of the mobile game market exceeded 70 billion yuan, an increase of 18.8% over the same period last year.
The saying "game winter" is rare, the version approval is thawed, and the new game commercialization is on the road. The report pointed out that in the first half of the year, the old products such as "Glory of the King" and "Fantasy Westward Journey" are still stable, and the new game games such as "Perfect World" and "Peace Elite" have reached a flow of about 1 billion yuan in the first month.
In the second quarter, Tencent's total online game revenue increased by 8% year-on-year to RMB 27.3 billion. In the previous quarter, its revenue was 28.513 billion yuan, down 0.9% year-on-year.
In the second quarter, Tencent's PC client game revenue fell 9% year-on-year to RMB11.7 billion, Tencent IntelligenceMobile phoneGame revenue (including smartphone game revenue attributable to its social networking business) increased 26% year-on-year to RMB 22.2 billion. Tencent’s mobile game circulation increased after the game version was resumed, and ten games were released in the second quarter, including the self-developed AR game “Catch the demon together” and the self-developed role-playing game “Fairy Tail” and Lajieer. In the first quarter, Tencent only released one game.
The financial report mentioned that the "Perfect World" mobile game has made a significant contribution to its second-quarter revenue. In addition, the highly regarded "Peace Elite" has been launched since May, and the number of daily active accounts has exceeded 50 million, which has opened up commercialization. Successfully launched the season ticket. Although the game's contribution to the second quarter's reported revenue is limited due to the delay, it will bring more revenue.
According to gamma data analysis, the market performance in the second half of the year is worth looking forward to as the approval of the version number is more efficient and faster. For the Tencent game business, in addition to the above new games, andNintendoThe cooperation is also worthy of attention.
According to the previous website recruitment information, Tencent Interactive Entertainment Group has established the "Nintendo Cooperation Department", which will be responsible for the agency work of the Nintendo Switch game console in China, and the information during ChinaJoy shows that Tencent's cooperation with Nintendo is introduced in the agency. In addition to the Nintendo Switch host hardware, the game software of the Nintendo Switch platform will be introduced.
QQ users are at the top, WeChat is still expanding
In terms of communication and social services, WeChat still shows great vitality.
In the second quarter, the number of monthly active accounts of WeChat and WeChat reached 1.133 billion, an increase of 7%. The number of monthly active accounts of QQ's smart terminals was 707 million, a slight decrease of 0.3% compared with the same period of last year. The total number of QQ monthly active accounts was 808 million, a year-on-year increase of only 0.6%.
In terms of the size of active users, only QQ in China can be compared with WeChat. Although the rise of WeChat has become a must-have social tool for everyone, QQ has always been more popular among young people.
According to the financial report, Tencent has upgraded the important version of mobile QQ to improve the daily information transmission and improve user activity. In order to enrich the core chat experience, it has enhanced the functions of different forms of information such as voice and video. In order to expand the QQ user connection, the algorithm was upgraded and new friends were recommended based on common interests and common contacts. Tencent also launched the QQ applet, and said that the entertainment and game applets are especially popular among QQ users.
However, from the data point of view, the active user size of QQ has reached a ceiling.
In contrast, WeChat is still strong. In the financial report, Tencent emphasized that the ecosystem of WeChat applet is more and more vital, attracting more developers and service providers to participate. The number of medium and long tail small programs has more than doubled year-on-year, and the categories of small programs have also diversified. The number of daily active accounts of more than a dozen content applets has exceeded 1 million.
According to QuestMobile data, in the second quarter, the number of mobile Internet users decreased by 2 million, while the growth rate of users' single-day usage slowed down. From December 2018 to March 2019, the growth rate of users' time decreased from 22.6% to 11.8%. By June 2019, it fell to 6%. Under this trend, the looting of users' attention is more intense. As far as WeChat is concerned, the prosperity of the small program ecology continues to expand its capability boundaries, its functions are more perfect, and the gravity of users is stronger.
In July of this year, WeChat launched the 7.0.5 version update, which strengthened the floating window capability of the mobile terminal and began to support the setting of floating windows such as browsing files, collecting notes, and small programs. Some commentators say that this makes WeChat more and more like an operating system. In August, WeChat opened the PC version of the small program developer beta, and supported the opening of small programs on the PC side, and its ability was further strengthened.
PC WeChat will support small programs
In the WeChat Night speech at the beginning of the year, Zhang Xiaolong talked about the "original power" of WeChat and mentioned two points. The first is to insist on making a good tool that keeps pace with the times. The second is to "make the creator reflect value." The latter means that WeChat will find ways to make the developers who make excellent small programs get rewards. Regarding the former, Zhang Xiaolong mentioned WeChat's slogan: "WeChat is a way of life."
Communication is the foundation of WeChat, but WeChat is not only a communication tool, but also integrates more and more services into the user's life, and this becomes the foundation of its vitality.
Financial technology and corporate services are growing fastest
Earlier, Tencent's financial technology and cloud business have been hidden in the "other" business items of the financial report. Since the fourth quarter of 2017, the proportion of this project in Tencent's overall revenue has exceeded 20%. By the first quarter of 2019, Tencent began to disclose relevant data separately.
In the first quarter, benefiting from commercial payments andcloud serviceRevenue growth, financial technology and corporate services revenue increased by 44% year-on-year to RMB 21.789 billion, second only to online games. In the second quarter, financial technology and corporate services revenue was RMB 22.9 billion, a year-on-year increase of 37%. In all businesses, the fastest growth has been maintained. At present, the proportion of this business in Tencent's overall revenue is basically stable at one quarter.
Specifically, in terms of financial technology services, the increase in the number of commercial payment users, the number of merchants, the transaction volume and the income has contributed to the increase in revenue of this segment. As of the end of the second quarter, the total customer assets of Tencent “Li Cai Tong” exceeded RMB 800 billion, and users were increasingly depositing funds in the Tencent payment system.
In terms of enterprise services, Tencent expanded its sales team and product types to acquire more major customers and large contracts, and deepened its penetration of small and medium-sized business customers by establishing partnerships with independent software developers and agents.
Tencent Cloud has more cooperation in the financial sector. According to official data, there are currently more than 6,000 related customers, including more than 150 bank customers, dozens of insurance and securities companies, 70% of licensed consumer finance companies and 80% of new insurance companies. Ten of the four major state-owned banks have cooperated with Tencent Cloud. China Life Insurance, China Insurance, Haitong Securities and China Galaxy Securities also have close cooperation with Tencent Cloud.
At the 2019 Tencent Global Digital Ecology Conference in May this year, Qiu Yuepeng, president of Tencent Cloud, once said that “cloud” will become the standard of the industrial Internet, and artificial intelligence, various enterprise-level services and consumer-grade services will be delivered through “cloud”. For Tencent, which embraces the industry's Internet, it naturally values this opportunity. But face to faceAli CloudTencent Cloud still has a long way to go before strong competitors compete.
In July of this year, Tencent Cloud announced that it officially entered the Japanese market, providing one-stop cloud services for Japanese companies. Internationalization has become an important strategy for Tencent Cloud. Tencent Cloud Vice President Ai Zhiyu said that the goal of Tencent Cloud's internationalization business in 2019 is to increase revenue by 4-5 times compared with the same period of last year. The Japanese market will be one of the key markets for Tencent Cloud.
Friends circle drives advertising revenue
In the second quarter, Tencent’s total revenue in online advertising was 16.4 billion yuan, a year-on-year increase of 16%, and the growth rate slowed further. This is related to the macro environment, and Tencent expects the negative impact of the business environment to continue.
In this respect, it is worth noting that the WeChat circle of friends and QQ watched the social and other advertising revenues to grow to 12 billion yuan, a year-on-year increase of 20%.
In April of this year, the friend circle ad @朋友 comment interaction ability is fully open, and all friend circle ads have the ability of @朋友 comment interaction by default. After the user receives the circle of friends, they can interact with the comments and comments in the comment area of the advertisement. In this way, WeChat further activates the energy of the circle of friends.
WeChat show friends circle advertising @朋友
In June of this year, WeChat launched a “gravitation plan” to provide advertisers with complete solutions for clue acquisition, clue management, and clue appreciation to enable them to obtain potential customers on a larger scale. In July of this year, the circle of friends promoted the limited-time promotion mode to match the advertisements of new product launches, variety dramas, live broadcasts, and limited time purchases with strong timeliness requirements.
According to the industry report released by CTR, the Chinese advertising market has re-entered the adjustment period, with an overall decline of 8.8% in the first half of the year. In this case, we may have more ads on WeChat, which has 1.1 billion monthly users.
In addition, in the digital content business, driven by the increase in the number of subscriptions to video and music services, the number of Tencent's value-added service subscription accounts increased by 10% year-on-year to 168.9 million. Among them, Tencent's video subscription accounts increased by 30% year-on-year to 96.9 million due to the launch of joint membership discounts with strategic partners and the popularity of the self-made national series "Douro China" (second season).
In the previous quarter, the number of Tencent video subscription accounts increased by 43% year-on-year. In contrast, the growth rate in the second quarter slowed down.
Wang Juan, the chief editor of Tencent Video, mentioned at the annual conference on June 11 that his membership is about to break 100 million. The iQiyi side announced on June 22nd that as of 5:13 am on the same day, its membership has exceeded 100 million high, and announced that China's video payment market has officially entered the "100 million" membership era. In terms of video, the competition between Tencent Video and iQiyi will continue.