Tencent’s first profit drop since 2005 blamed on wait for Chinese regulators to approve new games
A regulatory restructuring, which has led to a months-long halt on the approval of new video games in China, highlights the big role that the central government plays in the country’s internet industry
Tencent Holdings may run the world’s biggest video games business by revenue and China’s most widely used social media platform, but the company is finding out that it too is subject to the sometimes unpredictable workings of the government.
Shenzhen-based Tencent, along with other companies in China’s gaming industry, have been forced to wait patiently on the sidelines amid a regulatory restructuring that has led to a months-long halt on government approval of new games.
“There’s a temporary suspension on the monetisation approval mainly because of a restructuring of officiating bodies at the senior government level,” said Martin Lau Chi-ping, the president of Tencent, in an 80-minute conference call with analysts on Wednesday evening after the company’s earnings results announcement.
Lau said “a lot of games have not been approved”, which confirmed a South China Morning Post report last week that the State Administration of Radio and Television (SART) – the body in charge of monitoring games and other entertainment content – has not given licences to any new games since March 28.
“The administration is aware that the restructuring is affecting the industry,” he said.
