- Tencent reported total revenues of ¥85.5B RMB ($12.7B USD) for Q1 2019, up 16% YoY from ¥73.5B ($10.9B) in Q1 2018.
- Smartphone game revenues declined 2% YoY to ¥21.2B ($3.2B) due to fewer game releases, but user engagement increased due to international battle royale titles.
- Tencent says it is “invigorating” its game business with mobile titles Perfect World Mobile and PUBG Mobile.
Tencent 
reported financial results for the first quarter of 2019 ending March 31, exceeding estimates.
Tencent cited fewer game releases as the reason behind its sluggish mobile game revenue. The company introduced Season Passes to PUBG Mobile and Fortnite , which contributed to higher user engagement, pay ratios, and revenue generation internationally. Tencent cited estimates by App Annie—a company providing app analytics and app market data—that PUBG Mobile exceeded 100M monthly active users (MAUs) since February.
“We are invigorating our game business with popular releases such as Perfect World Mobile in China, while PUBG Mobile is growing internationally,” Ma Huateng, chairman and CEO of Tencent told investors during the Q1 earnings call.
Tencent has invested considerable time and money into PUBG Mobile esports initiatives over the past year, including the PUBG Mobile Star Challenge and a final at Festival Arena in Dubai. In March, Tencent revealed the PUBG Mobile Club Open 2019, a year-long event in which both semi-pro and professional teams compete for a $2M prize pool.
It may be growing internationally, but Tencent shut down PUBG Mobile in China on May 7. The company released a new title called Game for Peace that features similar game mechanics with toned-down violence and graphics to please government officials.
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The company is now experimenting with Season Passes in games such as Cross Fire Mobile, Honor of Kings, and QQ Speed Mobile.
At the end of Q1, Tencent entered into a partnership with Razer that focuses on the optimization of mobile games and could include joint offerings from the two companies.
PC games revenue dropped 2% YoY to ¥13.8B ($2B), but increased 24% QoQ from Q4 2018. Core PC user activity remained at “healthy levels,” the company said. Promotional packages for Chinese New Year increased paying users in DnF quarter-on-quarter, while character skins drove engagement and cash receipts in League of Legends (LoL).
At 57%, value-added service (VAS) represented Tencent’s largest revenue segment at ¥48.9B ($727M), of which online games accounted for 33%. In Mainland China, total daily active users (DAU) of smartphone games increased YoY, while paying users grew quarter-on-quarter. Exact DAU and user counts were not provided as of this writing.
Tobias Seck contributed to this article.
