Tencent gaming business threatened, but developing in artificial intelligence

CEO and founder of one of the companies with the highest revenue in the world – Tencent Holdings – Poni Ma said that his conglomerate is facing major challenges from competitors. He pointed out that specifically Tencent's gaming business is threatened, but that the company is catching up with others in the development of artificial intelligence.

Ma, speaking at the company's annual meeting this week, said the company had relied on its laureates in games while competitors managed to introduce new hits. Video games, by the way, make up more than 30 percent of this technological giant, which is considered one of the companies with the highest revenue in the whole world, writes Reuters.

Chinese media published parts of Mao's speech on the Internet, and a person with direct knowledge of the meeting, who was not allowed to reveal his identity to the media because communication with them is prohibited, confirmed the content of these allegations.

Mao's speech highlights concerns over whether Tencent, the world's largest gaming company and operator of China's largest social network WeChat, will be able to defend its status as China's largest technology company in a time of intense competition and new technologies.

The company did not comment on these media headlines for portals that requested it.

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„Games are our main business… But in the past year we faced significant challengesMa allegedly said during his presentation. “We were at a loss, while our competitors continued to produce new products, leaving us feeling like we had accomplished nothing..”

He also added that the new games launched by Tencent did not achieve the expected results.

Sutterstock/Yijing Liu

Mao's comments come as Chinese developers miHoYo and NetEase have managed to surpass Tencent with hit titles such as “Genshin Impact” and “Eggy Party”. While past Tencent hits like “Honor of Kings” and “PUBG Mobile” continue to bring in strong revenue, newer products have fallen short of expectations. However, when it comes to artificial intelligence, Ma said Tencent has caught up with others.

„We can finally follow the steps of first-class companies. We don't consider ourselves the most advanced, but at least we're not too far behind“, he points out.

The company's focus, in his opinion, should have been to integrate the “Hunyuan” AI model into various business scenarios as a way to improve efficiency, not to quickly turn AI into products.

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Another focus of Mao's speech was on e-commerce streaming. For several years, Tencent has been trying to make the WeChat platform similar to the one for short videos – Douyin – of ByteDance, which also owns the TikTok app. The aforementioned Douyin platform otherwise generates large revenues from the so-called live streaming of e-commerce.

„WeChat is our strongest platform in terms of daily users and its ecosystem. But she is 12 years old… Now the question is how we can find new sprouts from an old tree like WeChat“, he pointed out not very optimistically.

However, although the conglomerate is currently in trouble, we should not forget that this company bought half of the gaming company Ubisoft at the end of 2022, which could change things in the future when it comes to Tencent gaming business.

But in August of last year, analysts rated Tencent as a company that ended up falling short of their expectations precisely because it slowed the growth of gaming revenue. However, if the claims of artificial intelligence development within the company are true, things could turn around, considering that AI functions have become globally popular and highly sought after functions.