Tencent revenue misses forecasts as larger spend offsets gaming positive factors

BEIJING: Tencent Holdings reported a 9 per cent rise in first-quarter income to 196.5 billion yuan (US$28.94 billion) on Wednesday (May 13), however fell wanting the 198.96 billion yuan forecast by analysts.

The Shenzhen-based firm’s income development was pushed by a powerful gaming efficiency, with home gaming income rising 6 per cent and worldwide gaming income climbing 13 per cent.

Although China’s largest social media and gaming firm benefited from strong demand for its video games and increasing synthetic intelligence companies, its internet revenue was 58.1 billion yuan, beneath estimates of 61.42 billion yuan.

Flagship titles together with Honour of Kings and Peacekeeper Elite continued to drive consumer engagement, whereas tactical shooter “Delta Force” additionally contributed to the positive factors.

Online promoting income elevated 20 per cent to 38.2 billion yuan, boosted by AI-enhanced advert concentrating on capabilities.

Tencent final month unveiled Hunyuan 3.0, its most superior massive language mannequin up to now and its first main launch since hiring former OpenAI researcher Yao Shunyu to guide improvement of its proprietary AI platform.

The launch underscores Tencent’s efforts to shut the hole with rivals ByteDance and Alibaba, which analysts say have been extra aggressive in AI funding and deployment.

Tencent mentioned in March it could ramp up AI spending this yr, together with funding in proprietary fashions. President Martin Lau mentioned the corporate plans to extend capital expenditure in 2026, with out specifying the quantity.

The tech big’s whole capex reached about 79 billion yuan final yr, up from 77 billion yuan in 2024. First-quarter capex was 31.9 billion yuan, versus 27.5 billion yuan a yr earlier.

Tencent spent 1 billion yuan selling its Yuanbao AI chatbot through the Lunar New Year vacation interval because it seeks market share in China’s more and more aggressive AI sector.