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Tencent returns to profit growth despite concern around games – TechCrunch

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Chinese internet giant Tencent bounced back from a disappointing previous quarter, but for once the company didn’t have its gaming business to thank.

Tencent may be best known for conjuring up WeChat, China’s most popular messaging platform, but its revenue is driven by its gaming business, which includes top smartphone titles and a thriving PC unit. Its Q3 results, announced today, however, saw its gaming income slacken and other units, including a booming advertising business, step up.

The firm posted a net profit of RMB 23.3 billion ($3.4 billion) on total revenue of RMB 80.6 billion ($11.7 billion), up 30 percent and 24 percent, respectively. Profit growth was back on track, mainly thanks to increased net gains from investments, including a blockbuster IPO of Meituan in September.

Advertising increased by 47 percent and generated 20 percent of total revenues, marking the first time that the segment has reached that mark. The jump is in part a result of strong ad revenue growth on Tencent’s two main chat apps, WeChat and QQ.

These changes are a sign that Tencent has begun to aggressively monetize its massive network of social networking users. As of September, Tencent had 1.08 billion monthly active users on WeChat worldwide, though the app’s spectacular growth has slowed to 2.3 percent quarter-to-quarter.

Tencent underwent an internal reorganization in October that saw it merge several business groups, which have resulted in a more unified system of advertising sales platforms, the company explained in today’s report.

“Our advertising, digital content, payment and cloud services sustained robust activity and revenue growth, and now account for the majority of our revenue,” chairman and CEO Pony Ma said in a statement.

In contrast, games, which have been Tencent’s major revenue driver for years, slid four percent this quarter due to a prolonged freeze on gaming licenses in China. The firm claims it has 15 games with monetization approval in its pipeline, which means that gaming revenues could rebound when it publishes those titles, although it said the same in the previous quarter, so a lack of progress is fairly ominous.

The firm also pointed out that while mobile games continued to fuel revenue growth, PC games suffered a decline.

When asked about the situation with gaming licenses on a call with investors, Tencent President Martin Lau said the company is “waiting for the government to start the approval process.”

Tencent appears to have found a potential interim solution, which involves allowing third-party publishers who secured a license before the freeze to publish games through its platform, but of course, that has limited use.

While games are the hot topic, Tencent was keen to push the story of its cloud computing business, which it said is a key to widening its focus into IOT and other areas.

Emboldened by the reorganization in October, which seemed aimed at shifting Tencent from a consumer-facing internet company into one that’s increasing serving industries, the firm said its cloud business more than doubled its revenue year-on-year. There was no raw revenue figure released for the quarter, but the company did disclose that the cloud unit has brought in more than RMB 6 billion, $860 million, over the last three quarters.

Furthermore, cloud computing and payment-related services helped its “Others” business increase its revenue 69 percent year-on-year to reach RMB 20.3 billion, $2.92 billion, for the quarter.

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It’s the battle of the alien symbiotes in Venom: Let There Be Carnage trailer

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Tom Hardy returns to the big screen as the lethal protector Venom, taking on Woody Harrelson’s villainous Cletus Kasady/Carnage, in Sony’s forthcoming film Venom: Let There Be Carnage.

Tom Hardy (Mad Max: Fury Road) returns as intrepid reporter Eddie Brock, infected with a parasitic alien symbiote that gives him super powers, in Venom: There Will be Carnage. Directed by motion-capture icon Andy Serkis, it’s the sequel to 2018’s box-office smash, Venom. After being delayed for nearly a year due to the ongoing pandemic, Sony just dropped the official trailer, in which Brock/Venom must battle serial killer Cletus Kasady (Woody Harrelson, Zombieland), infected with another alien symbiote dubbed Carnage.

(Some spoilers for first film below.)

A Venom film was in development at New Line Cinema back in 1997, although the project didn’t really get off the ground until Sony acquired the rights to the character, as well as Spider-Man. Sony initially planned for Venom and Spider-Man to inhabit a shared universe, given their history in the comics. (Spider-Man was Venom’s first host, before moving on to Brock, and the character gradually evolved from villain to more of an antihero.) The disappointing box office performance of 2014’s The Amazing Spider-Man 2 changed those plans, and Venom was re-conceived as a standalone film, with Tom Hardy signing on as the star and Zombieland director Ruben Fleischer agreeing to direct.

That first film served as an origin story for our antihero. A bioengineering firm called the Life Foundation discovered a comet covered with symbiotic lifeforms and brought four samples back to Earth. Brock’s then-fiancée, Anne Weying (Michelle Williams, Fosse/Verdon), shows him classified documents revealing that the foundation is conducting human/symbiote experiments. The symbiotes need oxygen-breathing hosts to survive, but they invariably end up killing those hosts.

Hot on the story, Brock breaks into the research lab and ends up infected with one of the symbiotes, named Venom. Venom reveals that the symbiotes are intent on taking over Earth by possessing/devouring all humans, but Brock ultimately strikes up a bargain with Venom, and they decide to protect Earth instead. Together, they take on Life Foundation CEO Carlton Drake (Riz Ahmed, Sound of Metal), infected with a symbiote called Riot.

Venom was released in October 2018 and was roundly panned by critics, several of whom specifically bemoaned the lack of a Spider-Man connection. Audiences, however, begged to differ. Venom racked up $856 million globally and was the seventh-highest grossing film of the year. Hardy had already committed to two sequels, and a midcredits sequence featured Harrelson’s Cletus Kasady taunting Brock (who is interviewing Kasady for a story) from his cell. Kasady vows to escape and bring “carnage,” leaving little doubt as to the villain’s identity in a sequel.

Audiences particularly responded to the burgeoning relationship between Brock and Venom, who remained secretly bonded at the film’s end as a kind of hybrid vigilante. One scene in particular—Venom giving Brock a lingering French kiss while transferring from Anne’s body back to Brock’s—launched a thousand ships for “Symbrock.” Sony embraced the fan response by marketing the home release with ads playing up romantic-comedy overtones.

The trailer for Venom: Let There Be Carnage plays up more of a bromance/odd-couple angle, opening with Brock and Venom preparing breakfast—with mixed results—as Venom raspily sings along to “Let’s Call the Whole Thing Off.” Brock’s friendly neighborhood convenience store owner, Mrs. Chen (Peggy Lu, Always Be My Maybe), is back to provide comic relief, Williams reprises her role as Anne Weying, and Naomie Harris (Skyfall, Moonlight) plays a secondary villain named Shriek—because even serial killers like Kasady need a love interest, and this one can manipulate sound.

Other than Kasady’s escape and emergence as Carnage, the trailer gives little away as to the actual plot, although there do seem to be elements from the Maximum Carnage storyline. Chances are, if you enjoyed the first Venom film, you’ll like the sequel, too.

Venom: Let There Be Carnage opens exclusively in theaters on September 24, 2021.

Listing image by YouTube/Sony

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Sony says PS5 could be difficult to find into 2022

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Enlarge / This Sony engineer can get a PS5, but millions of others can’t, thanks to short supplies that are likely to continue.

Sony thinks demand could continue to outstrip supply of the PlayStation 5 into 2022. That’s according to a Bloomberg report citing a number of unnamed analysts who listened in on an explanatory call following Sony’s recent earnings report.

“I don’t think demand is calming down this year, and even if we secure a lot more devices and produce many more units of the PlayStation 5 next year, our supply wouldn’t be able to catch up with demand,” Sony CFO Hiroki Totoki reportedly said.

Sony has been warning for months that worldwide shortages of semiconductors and other components have made it hard to increase production for the PS5. But this is the most direct sign that those shortages will extend past this year and into the next.

Sony President and CEO Jim Ryan said in February that he expected PS5 supplies would “get better every month throughout 2021,” leading to “really decent numbers indeed” by the second half of this year. But Totoki amended that statement in April to say that it’s “not likely” Sony could “drastically increase the supply” before the company’s fiscal year ends in March 2022.

Supply problems aside, demand for the PS5 seems to be matching that of the early days of the PS4, which has sold over 115 million units to date. The PS5’s 7.8 million sales through March and 14.8 million additional projected sales in the current fiscal year are broadly in line with sales of the PlayStation 4 at the same point in its life cycle.

But while the PS4 was in short supply in the early months of 2014, by August of that year, Wired was citing the lack of retail PS4 shortages as one reason behind the system’s unexpected success at the time. In other words, the difference between shelves full of PS4s and shelves empty of PS5s is due to the supply, not demand, levels between the two systems.

Totoki reportedly told analysts that he “can’t imagine demand dropping easily” for the PS5, and that situation would continue to put pressure on Sony to increase supplies in any way it can. But with the company already taking a loss on every system sold, spending more money to secure scarce chips over competitors could be difficult (if it’s possible at all).

Put it all together, and you have a situation that could mirror that of the Nintendo Wii, which remained hard to find on store shelves for well over a year after its late-2006 release. That situation got so bad that former Nintendo of America President Reggie Fils-Aime had to actively deny that there was a conspiracy to keep Wii supplies artificially low.

Today, of course, Nintendo is facing the same semiconductor shortages as Sony in trying to keep up with demand for the Switch, as are many carmakers. All told, it looks like the “big scramble” for silicon chips is set to continue for a while.

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New book Press Reset investigates the high human cost of game development

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Enlarge / Jason Schreier’s latest deep dive on the game industry is out on May 11 at all major booksellers.

Grand Central Publishing

Games industry journalist Jason Schreier has left his mark over the years by digging up behind-the-scenes dirt at sites like Kotaku and Bloomberg, but he may be best known for Blood, Sweat, and Pixels. This 2017 book broke down like a Schreier’s “greatest hits” collection: Every chapter followed a particular game and its lead studio through a wild “triple-A” period in the late ’00s and early ’10s.

If you’ve read BSP or any of Schreier’s other investigative stories, you’ll likely notice common threads at modern game studios, no matter which genre or specific company is involved. The first brilliant stroke of his newest book, Press Reset: Ruin and Recovery in the Game Industry, is to take that concept a step further. Individual games and studios get an occasional spotlight, but this time, Schreier often follows individual developer résumés to answer a few huge industry questions.

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