The communist government in Beijing has tightened the reins massively in the entertainment industry in recent months. For example, the authorities limited the time that young people under the age of 18 can spend playing online games to three hours a week. New computer games have not been released since the summer. The market value of the technology giant Tencent had then collapsed by 60 billion dollars (51.83 billion euros), the shares have not recovered.
The tighter regulation of the Chinese internet giants has Tencent the wind taken from the sails. Sales climbed in the third quarter by 13 percent to 142.4 billion yuan (19.24 billion euros), as the video game provider and operator of the messenger app WeChat announced on Wednesday. The growth was, however, as low as since the IPO in 2004.
Tencent nevertheless increased its sales in the past quarter with mobile games by nine percent. Net income rose three percent to 39.5 billion yuan. Analysts surveyed by the data provider Refinitiv had expected a decline in profits. “We are proactively adopting the new regulatory environment and believe that it can contribute to more sustainable development in the industry,” said Tencent– Chef Pony Ma. The group believes that some of the government’s regulatory restrictions are temporary.