The Chinese holding company Tencent has just revealed its financial results for the three months ending on September 2014. Overall, the results are pretty impressive. Compared with the same quarter last year, revenues rose by 28% to RMB 19.8 billion ($3.2 billion, £2.04 billion). This in turn led to a 46% increase in net profits to RMB 5.7 billion ($923 million, £584 million).
Tencent has said that these improved figures were driven by the success of their Value Added Services (VAS) sector. This is a term used in the telecommunications industry to describe activities in non-core services. For Tencent, this includes their huge portfolio of games.
The VAS sector is made up of both mobile games and online PC games. Revenues from smartphones titles continue to rise thanks to an expanded user base. Their free-to-play games on mobiles and social networks saw growth in both subscriptions and in-app purchases, leading to a 47% increase in revenue to RMB 4,723 million. In China, Tencent’s social networking platform QZone is starting to overtake Facebook and MySpace with 645 million users. Tencent is also the Chinese publisher of King’s Candy Crush Saga, which is the top-selling app in the country as of September 2014.
In terms of PC games, the corporation experienced success with both their established titles and their new launches. Tencent runs a number of Asian-developed online games including Dungeon Fighter Online, QQ Fantasy and Monster Hunter Online. In the West, Tencent holds 92.78% of Riot Games, the developer behind the incredibly popular League of Legends. They also hold a minority stake in Epic Games, the studio that created Unreal Tournament and Gears of War.
Outside of VAS, Tencent improved their advertising revenues by 76% to RMB 2,440 million. On the other hand, e-commerce revenues plummeted by 81% to RMB 459 million.