Tencent has confronted quite a lot of headwinds in 2022 together with a Covid-induced slowdown within the Chinese language financial system and a more durable marketplace for gaming.
Bobby Yip | Reuters
Tencent stated it can launch new cloud computing merchandise geared toward abroad markets because it searches for brand new avenues for development amid a slowdown in its core on-line video video games enterprise.
On Thursday, Tencent will host a launch occasion for cloud merchandise particularly geared toward markets outdoors of China, together with a collection of cloud-based audio and video merchandise.
The transfer marks a realization that Tencent wants to seek out new sources of development overseas as China’s financial system slows. Apart from continued strain from Covid outbreaks, Chinese language tech corporations additionally face a more durable regulatory surroundings at dwelling.
Tencent, specifically, has been damage by stricter regulation on on-line video games. Final 12 months, Beijing introduced rules that lower the period of time individuals below 18 may play on-line video games to a most of three hours every week. Regulators additionally froze game approvals for several months, which means corporations like Tencent and rival NetEase couldn’t launch and monetize new titles.
Whereas there are indicators that the gaming crackdown could now be over, Tencent has felt the impression. Home on-line recreation income fell 7% within the third quarter in contrast with a 12 months in the past.
Tencent’s second-biggest income driver is on-line gaming, so a slowdown on this section is a drag on general development.
The Shenzhen-headquartered firm views cloud computing as an space that would choose up the slack. Tencent’s fintech and enterprise providers division, which incorporates its cloud computing division, grew 4% year-on-year within the third quarter.
Chinese language tech giants are usually not solely seeking to new enterprise divisions for development, they’re additionally in search of new income streams abroad. E-commerce firm Alibaba has used its AliExpress and Lazada model to expand abroad, for instance, whereas Tencent has discovered massive success with its on-line video games.
Now, Tencent is banking on cloud computing. The merchandise launched Wednesday deal with audio and visible merchandise comparable to stay streaming for e-commerce or on-line conferences.
The merchandise are geared toward corporations that need such providers however do not essentially wish to keep the infrastructure, such a servers, or construct these options themselves.
Tencent’s technique may deal with making an attempt to enroll international corporations with a presence in China in addition to Chinese language corporations increasing overseas. Already, corporations comparable to BMW use a few of Tencent’s cloud merchandise.
Because the Chinese language agency expands abroad, it can enter a really aggressive cloud computing market dominated by U.S. giants Amazon and Microsoft. Tencent’s worldwide push with cloud computing is comparatively late in contrast with that of rival Alibaba, which expanded outdoors China in the previous few years. Now, Alibaba is among the many 5 largest cloud computing corporations on this planet.
Tencent’s deal with audio and video merchandise performs to its strengths as one of many world’s largest gaming corporations and the proprietor of WeChat, China’s hottest messaging app with over 1 billion customers.