Tencent Q1 2024 Financial Results: Domestic Revenue Slowdown and Reorganization

Tencent’s financial results for the first quarter of 2024 reveal a strategic shift toward internal reorganization to combat slowing domestic gaming revenues. While the company achieved a total revenue of 159.2 billion yuan—a 6% year-over-year increase—and significant growth in operating and net profits, its domestic gaming segment experienced a 2% decline. This downturn was primarily attributed to reduced revenue from flagship titles Honor of Kings and Peacekeeper Elite, though both showed signs of recovery by the end of the quarter.

To address these challenges, the company is actively "rejuvenating" its portfolio by restructuring development teams and refining monetization strategies. This approach emphasizes long-term engagement over immediate download metrics, treating major competitive multiplayer titles as evergreen assets similar to traditional sports. The effectiveness of this strategy is evidenced by record-high quarterly revenues for titles such as Fight of the Golden Spatula, CrossFire Mobile, and Arena Breakout.

Internationally, the company saw a 3% revenue increase to 13.6 billion yuan, bolstered by strong performances from Supercell’s portfolio, particularly Brawl Stars, which saw its average daily active users more than double. Despite the broader industry challenge of new releases struggling to compete with established live-service giants, the company remains committed to its evergreen model. By prioritizing retention and team agility, the organization aims to stabilize its domestic market position while fostering growth in its international gaming segments.