Tencent sees Q2 revenue dip thanks to China's playtime restrictions
Due to China's recent restriction on young players, Tencent's financials have taken taken a decline for the first time in the company's history. Tencent recently posted its financials for the second quarter of 2022, and in both three and six-month periods, revenues had a loss ranging from 1 to 3 percent.
China's National Press Administration enacted a law in late 2021 that limits players under 18 years old can only play games on weekends and legal holidays between the hours of 8 and 9 PM. A recent study by Niko Partners indicated that as a result, there are 83 million young video game players in the country, a 31 percent drop compared to the 122 million youths during 2020.
In the three-month period for the second quarter of 2022, Tencent earned $134 million, down 3 percent from 2021's $138.3 million. For the similar six-month period, it saw a 1 percent decrease from $273.6 million (2021) to $269.5 million (2022).
Tencent saw repeated growth in revenue and profit in previous years, and often from its mobile games.
During its writeup for the quarter, the China-based Tencent referred to the playtime restriction law, and the subsequent profit loss, as a "transitional challenge." The effort to protect kids, along with a lack of big game releases and lower user spending, led to a 1 percent decrease in revenue across its various titles such as League of Legends and Honour of Kings.
That said, amongst adult players, both Honour of Kings and Peacekeeper Elite saw an increase in playtime. And though it lacked large game releases, Tencent did note the growing popularity of its recent releases, such as Arena Breakout and Fight of the Golden Spatula.
Internationally, Tencent was hit with another 1 percent revenue dip, though the
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