Tencent has confronted quite a lot of headwinds in 2022 together with a Covid-induced slowdown within the Chinese language economic system and a more durable marketplace for gaming.
Bobby Yip | Reuters
Tencent stated it should launch new cloud computing merchandise aimed toward abroad markets because it searches for brand spanking new avenues for development amid a slowdown in its core on-line video video games enterprise.
On Thursday, Tencent will host a launch occasion for cloud merchandise particularly aimed toward markets exterior of China, together with a set of cloud-based audio and video merchandise.
The transfer marks a realization that Tencent wants to seek out new sources of development overseas as China’s economic system slows. In addition to continued strain from Covid outbreaks, Chinese language tech corporations additionally face a more durable regulatory atmosphere at house.
Tencent, specifically, has been harm by stricter regulation on on-line video games. Final 12 months, Beijing launched guidelines that lower the period of time folks beneath 18 might play on-line video games to a most of three hours every week. Regulators additionally froze sport approvals for a number of months, that means corporations like Tencent and rival NetEase couldn’t launch and monetize new titles.
Whereas there are indicators that the gaming crackdown might now be over, Tencent has felt the affect. Home on-line sport income fell 7% within the third quarter in contrast with a 12 months in the past.
Tencent’s second-biggest income driver is on-line gaming, so a slowdown on this phase is a drag on general development.
The Shenzhen-headquartered firm views cloud computing as an space that might choose up the slack. Tencent’s fintech and enterprise companies division, which incorporates its cloud computing division, grew 4% year-on-year within the third quarter.
Chinese language tech giants will not be solely seeking to new enterprise divisions for development, they’re additionally in search of new income streams abroad. E-commerce firm Alibaba has used its AliExpress and Lazada model to increase overseas, for instance, whereas Tencent has discovered huge success with its on-line video games.
Now, Tencent is banking on cloud computing. The merchandise launched Wednesday give attention to audio and visible merchandise resembling dwell streaming for e-commerce or on-line conferences.
The merchandise are aimed toward corporations that need such companies however do not essentially wish to preserve the infrastructure, such a servers, or construct these options themselves.
Tencent’s technique might give attention to attempting to enroll world companies with a presence in China in addition to Chinese language corporations increasing overseas. Already, corporations resembling BMW use a few of Tencent’s cloud merchandise.
Because the Chinese language agency expands abroad, it should enter a really aggressive cloud computing market dominated by U.S. giants Amazon and Microsoft. Tencent’s worldwide push with cloud computing is comparatively late in contrast with that of rival Alibaba, which expanded exterior China in the previous few years. Now, Alibaba is among the many 5 largest cloud computing companies on this planet.
Tencent’s give attention to audio and video merchandise performs to its strengths as one of many world’s largest gaming corporations and the proprietor of WeChat, China’s hottest messaging app with over 1 billion customers.
