Tencent reports decrease in PC and mobile revenue despite rising DAUs

Tencent has released its financial report for the second quarter ended June 30, which shows an overall increase in revenue across the board despite a drop in PC and mobile game revenue.

Tencent reports revenues of 73.6 billion yuan (~$10.6 billion), a year-on-year increase of 30 percent. First half revenues show a 39 percent growth year-on-year to 147.2 billion yuan (~$21.2 billion). 

PC games revenue came in at 12.9 billion yuan (~$1.86 billion), down 5 percent year-on-year and 8 percent lower than the previous quarter, due to a combination of what Tencent calls "weak seasonability" and the company's growing focus on mobile. 

However, operating profit for Tencent's second quarter dropped by 3 percent year-on-year to 21.8 billion yuan (~$3.14 billion), but for the six month period this increased by 25 percent to 52.5 billion yuan (~$7.57 billion).

Unsurprisingly, mobile games continue to be the driving force of revenue for the entertainment company, with 17.6 billion yuan (~$2.53 billion) generated over the quarter, totaling about 25 percent of total revenues. But compared to the previous three-month period, mobile game revenue has dropped 19 percent. 

The company likens this to the "non-monetization of popular tactical tournament games" and the fact that five of seven new games they launched were towards the end of the quarter.

The shift of users to playing these non-monetized games also contributed to a drop in monetization per user, but Tencent adds that the number of daily active users did actually increase year-on-year "at a double-digit rate".

The report also highlighted the steady number of daily active users for its mobile games despite a drop in monetization, citing how Arena of Valor has more than 13 million DAUs and generated over $30 million per month outside China for the first half of the financial year.

In addition, the mobile version of PlayerUnknown's Battlegrounds has 14 million DAUs (not including Japan and Korea) and generated over $20 million in July outside China.

Looking ahead, the company intends to look for other ways to monetize mobile titles and publish a wider array of games in categories with a higher average revenue per user.