Tencent Reports $21.9 Billion in Annual Revenue

by James Bates

tencent
(Photo: Tencent)

It's easy to forget that the personable Riot Games is not the end all be owners of League of Legends. The company has long been owned by one of China's biggest behemoths, Tencent. The latest financial reports from the Chinese corporation put in perspective exactly how huge Riot's parent company is.

The firm is best known in China for its chat products, QQ and WeChat, both of which are completely ubiquitous in the region. The success of these two platforms largely is due to a combination of their wide adoption and the size of their market -- China's population is near that of all of Europe combined. This week Tencent announced a total revenue of RMB 151.9 billion (or $21.9 billion) for the 2016 fiscal year, which was a nearly 50% increase over their income the year before. Most of that growth was from Tencent's increased sales, as the company saw a 43% increase in their slaes over the same period.

The company hasn't been idle in acquisitions, either, however, as they posted a 47% increase in their Q4 profits largely due to them finding new revenue streams in cloud services and payment systems. On the fiscal report, these show up as "other business" and saw a incredible 289% increase from where they were in 2015.

Historically, the most valuable market for Tencent is actually their games, however, which is part of the reason the business went out of their way to buy Riot Games, as League of Legends is extremely popular in their home country of China. Their online games revenue increases by 16%, and that profit was mainly driven by "PvP and RPG genre smartphone games".

Why is all of this interesting to players of League of Legends? Because later in the report, Tencent specifically mentions esports. The report says that the company “broadened user engagement with [its] major PC game titles via esports, game video streaming, and game interest groups.” The company manages all three of the biggest esports titles in China, League of Legends, Dungeon & Fighter, and Cross Fire, a Counter-Strike clone that is extremely popular in the east. Because of their success with online games in the 2016 year, the company noted that the outlook for 2017 might be a bit more ambitious. They mentioned the addition of "new genre-driven PC games", which can only be a good thing for fans of their already popular titles. The company has already announced that they are seeking a new $2 billion dollar loan that may be their next venture into the esports world, and their ventures tend to not be half-hearted -- anyone who's watched the LPL finals or watched MSI 2016 know that quite well.

By James Bates

A wanna-be novelist turned coach turned journalist, James is living proof that you never know where you'll end up. He's in love with narrative-heavy games, which he proves by spending his days writing about a game with less lore than Doom. His greatest regret in life is not having his name in the credits of Life is Strange, and it's galvanized him to truly pursue developing games that don't begin in packed taverns and use D20s.