Chinese gaming giant Tencent, known for their widely popular Battle Royale PlayerUnknow’s Battle Ground have faced a loss of 13% off their profits. The company is under serious pressure from the Government of China because of its recent regulation which prevents its new game Perfect World Mobile to be monetized before 2020, domestic slowdown and competition from rival companies are among other reasons.
Tencent were projected to increase their revenue by 31% by the end of the third quarter of 2019, however, the afforementioned reasons held them back and they only managed a growth of 25%. The Chinese government has been strict with online games in the past months which are loosening their grip from the domestic market which is forcing them to develop games that appeal to the rest of the world. On top of that most America based game developers are finding it awfully difficult to get approval for their game by the Chinese Government.
“We think for the next two quarters U.S. games will be harder to get government approvals for,” analyst Benjamin Wu said in an interview with Reuters.
Tencent despite of being under an economic situation has garnered other sources of income. Other than the complete ownership of Riot Games who developed League Of Legends, they have a massive 40% share in Epic Games, the developer of Fortnite as well as minor shares in Ubisoft and Activision.