How this game helped China's most valuable company to resist a severe economic downturn

China's most valuable company, Tencent , has defied economic downturns to post a 47% surge in profit for the last quarter. According to a report by Bloomberg, the strong performance was driven by the successful summer release of Dungeon & Fighter Mobile, which boosted revenue and helped offset the impact of the challenging economic environment. The Chinese social media and entertainment giant reported net income of 53.2 billion yuan ($7.4 billion), exceeding analysts' average estimate of 45.3 billion yuan. Revenue of the company also increased 8% to 167.2 billion yuan, in line with its expectations.

How Dungeon & Fighter Mobile helped Tencent's earnings


The report claims that Tencent's investments in a lineup of games, including the mobile hit Dungeon & Fighter Mobile and one of the biggest PC gaming hits, Black Myth: Wukong, have fueled a significant turnaround in the company’s gaming division and contributed to its profit surge.

These successful titles, along with a strong performance from other games released during the summer months, have solidified Tencent's position as a leading game publisher and financier, the report noted.

This suggests how Tencent may be more resilient to the current economic downturn in China compared to other tech giants like Alibaba and JD.com, who are facing challenges in the e-commerce sector.


Tencent's strong earnings amidst economic uncertainty raise questions

While Tencent's recent earnings report shows strong performance driven by successful game releases, the company faces challenges in replicating its past successes with new, original franchises. This comes as major Chinese tech companies begin their earnings season amidst a backdrop of government stimulus measures aimed at reviving the economy.

Despite a successful summer for Tencent's gaming division, the company is still searching for its next big hit to match the enduring popularity of Honor of Kings. Timi Studios, the creators of Honor of Kings, are exploring new genres, but any missteps could prove costly for Tencent, especially as the company becomes more cost-conscious during the economic downturn.

Meanwhile, e-commerce giants Alibaba and JD.com are expected to report their earnings later this week following a strong Singles' Day shopping festival. However, analysts caution that it's still early to declare a full economic recovery.