Active users on the company’s increasingly ubiquitous social networking and payment platform WeChat grew to 649.5 million in September from 600 million in July, while active users of QQ’s mobile chat app increased to 639.1 million from 627 million.
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“The mobile gaming sector has been an area of fast growth”, said Michelle Ma, an analyst at Bloomberg Intelligence in Hong Kong.
The company saw increasing payment volumes in the third quarter, especially in person-to-person, e-commerce and O2O transactions.
This year, Tencent has been stepping up its efforts to earn more revenue from advertising. As the company’s stock rose 35 percent this year, Alibaba’s shares slumped 20 percent while Baidu’s dropped by 12 percent.
Tencent said revenue from smartphone games was 5.3 billion yuan, up 60% from a year earlier-a sharp acceleration from the second quarter’s 11% pace. “The company introduced a few popular titles in the third quarter”. Marketing and sales expenses rose 7% to 2.04 billion yuan.
Tencent retreated 1.1% yesterday ahead of earnings release.
Tencent’s net quarterly income hit 7.45 billion yuan, versus estimates of 7.67 billion yuan.
Tencent pays for the rights to online streaming in China and generates revenue from ads. That business model is used because subscription TV isn’t as widespread in China as it is in the United States and Europe.
China is tightening its control of online music, paying particular attention to content and jacking up already tight censorship of the Internet.
Tencent’s content deals include streaming rights for National Basketball Association games, Sony Music Entertainment songs and Time Warner Inc.’s HBO network.
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The solid performance is likely to have made Tencent more confident about the prospects of e-commerce partner JD.com, in which it has a 15 per cent stake, as it battles Alibaba in Wednesday’s much-anticipated Singles Day online-shopping event. (Google shut down its Chinese music service in 2012 because the competition it faced was just too fierce.) The new censorship rules add an additional barrier to entry, as they would force these companies to comb through tens of millions of songs to weed out the ones that China’s Communist Party could deem a threat to the country’s political stability-an obviously hard task.
