China’s Tencent Holding witnessed a huge 45 percent revenue increase in 4Q, surpassing the estimates of analyst by 10 percent. In the same vein, it also reported missed income in terms of investments in video and other types of content. To start things off, Tencent CEO and founder Ma Huateng assures that Tencent doesn’t intend to spin-off the popular messaging app WeChat, according to a report by Reuters. The company also announced that the mobile messaging platform had a monthly active user base of 697 million at the end of December. That’s 39 percent more compared to the same quarter one year ago.
Now, Tencent said that the revenue in 4Q shot up to 45 percent and $4.7 billion in contrast with the revenue of the same time last year, where the analyst estimates are at about $4.3 billion. As for the profits, they went northward as well by 22 percent and $1.1 billion. However, in this case, it’s a tad under the analyst estimation of $1.15 billion.
According to Bloomberg, the revenue increase had trouble keeping up with the increasing costs for video and other content, rising up to 52 percent in 4Q. “We’ve been spending money to acquire high-quality content. We really are focusing on building a healthy ecosystem for third party content providers,” Martin Lau, President of Tencent, says.
That caused a problem as Tencent attempts to implement and search for methods to get users to stay or appeal to new ones. “We invested aggressively in our digital music, video, and literature services, encouraging the growth of a vibrant content industry,” Huateng says.
However, he did also mention that Tencent “pioneered several new categories of mobile games, boosting the growth of the interactive entertainment industry.” As a result, the company enjoyed a 33 percent increase in online game revenue in 4Q. One notable example on this front would be when Konami and the firm partnered up to develop a new Contra mobile game for the iOS and Android.