Chinese internet and gaming giant Tencent Holdings reported on Wednesday a 26% year-on-year increase in its revenue for the first quarter of 2020 with its video games business generating more than a third of its revenue.
The company posted a total revenue of 108.1 billion yuan ($15.2 billion) in its unaudited consolidated results for the first quarter ended March 31, 2020. Profit attributable to equity holders rose by 6% from a year ago to 28.9 billion yuan ($4.07 billion).
“During this difficult period, we seek to provide online services that keep people connected, informed, productive, and entertained,” Pony Ma, Chairman and CEO of Tencent said in a statement. “Our businesses have proved resilient and cash flow-generative, enabling us to increase our investment to fulfill our mission of ‘Tech for Good’.”
As the COVID-19 lockdowns trapped people inside with plenty of time to spend on video games, the world’s largest gaming company saw high demand for its mobile games boost its revenues. The company’s online gaming segment contributed 35% of total revenue, as sales grew by 31% year-on-year to 37.3 billion yuan ($5.26 billion). Total smartphone game revenue for the quarter came in at 34.7 billion yuan.
The increase primarily reflected revenue contributions from domestic smart phone games such as Peacekeeper Elite and Honour of Kings, as well as contributions from overseas games including PUBG Mobile and Clash of Clans, according to the earnings statement.
“Games serve important roles in keeping players entertained and connected, especially during the stay-at-home period,” said the company. “For mobile games, our studios released attractive content and our publishing teams ran compelling in-game events and activities, resulting in higher daily active users (DAU). Internationally, PUBG Mobile celebrated its second anniversary and enhanced localization capabilities to meet diverse user tastes in different regions.”
The increase in online gaming revenues was driven by greater contributions from in-game consumption as well as digital content services including music and video streaming subscriptions. However, Tencent expects the in-game time and in-game consumption activity to normalize as people gradually return to work.
Shares of Tencent, which are listed in Hong Kong, hit a more than two-year high of 447 Hong Kong dollars ($57.7) on Thursday morning.