Tencent sharpens focus on ‘evergreen’ video games in mainland China as domestic industry matures

Tencent Holdings is looking to sharpen its focus on “evergreen” video games that generate steady revenue, instead of rushing out new titles, as the domestic market continues to mature.

“We are more focused now, and we tend to cancel many products with intermediate positioning,” Tencent senior vice-president Steven Ma Xiaoyi said in a report published on Tuesday by Chinese digital news outlet Youxiputao. “For those projects that will never have the opportunity to challenge the first or second place in their own genre … it is better not to do them.”

Ma said this strategy takes into account the broad transformation in mainland China’s video gaming market, which is maturing.

The shift in focus for Tencent, which operates the world’s largest video gaming business by revenue, shows how the Shenzhen-based internet giant is adapting to the domestic gaming market, which experienced slower growth owing to the country’s uneven post-pandemic economic recovery that affected consumption, and regulatory scrutiny.

That slow growth was reflected in Tencent’s latest financial results, which saw its domestic video gaming business post a 2 per cent year-on-year drop in the first quarter to 34.5 billion yuan (US$4.8 billion). By contrast, overseas revenue for this business rose 3 per cent to 13.6 billion yuan in the same period.