Tencent Online Gaming Revenue Down From 2017, Shares Drop After 'Monster Hunter' Ban
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Tencent Holding Limited, one of the world's biggest corporations, has established itself as a titan in the gaming industry. However, the Chinese conglomerate took a stock hit this week due to concerns over its gaming revenue in the short term after one of its premier titles was suddenly blocked from sale in China, according to Reuters.
Tencent lost $15 billion in market value Tuesday after a 3.4 percent dip in its price of shares. In its Wednesday earnings report, Tencent posted a 2 percent net loss in income during the last quarter compared to the previous year, according to CNN. Tencent also reported a 19 percent drop in online gaming revenue from last quarter.
“Monster Hunter World” was a smash hit when it launched on PS4 and Xbox One earlier this year in most of the world. With more than 8 million copies sold, it propelled publisher Capcom to one of its best financial quarters. It launched in China under Tencent’s banner on Aug. 8 and was unexpectedly banned less than a week later.
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China’s Ministry of Culture and Tourism regulates the country’s massive gaming industry. As such, many popular western games are blocked from release in China due to content the ministry finds objectionable, like violence or anti-Chinese attitudes. While “Monster Hunter World” only features violence towards fantasy creatures, the ban could be more about internal bureaucracy, Polygon noted via the Financial Times.
A Tencent employee echoed a similar sentiment to Reuters, claiming that it suddenly became difficult for any video games to get licensed by the government since reforms earlier this year. Tencent got the license to sell “Monster Hunter World” back in March. Those who purchased the game can get a refund through Aug. 20.
Tencent owns 100 percent of “League of Legends” developer Riot Games, as well as minority stakes of various sizes in companies like “Fortnite” developer Epic Games and Ubisoft. Aside from that, it operates a number of online games that are popular in China, but not as much elsewhere. “Honor of Kings” posted $1.9 billion in revenue in China last year, but its western release (known as “Arena of Valor”) has not made much of an impact, according to GamesIndustry.biz.
Despite being a homegrown Chinese product with huge popularity, the country’s government has criticized the game for being addictive to children. Kids younger than 18 can only play “Honor of Kings” for one to two hours per day thanks to government regulations, according to the BBC.
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