Tencent Online Games Revenues Up 17%

Chinese media company Tencent said total revenues were RMB2,878.4 million ($421.3 million), an increase of 14.9% over the first quarter of 2009 (QoQ) or an increase of 79.9% over the second quarter of 2008 (YoY).

Online gaming revenues increased 17.0% QoQ to RMB1,241.0 million ($183 million). The growth was driven by the increased monetization of popular games, Dungeon and Fighter and Cross Fire, as well as the organic growth of QQ Game. This was partially offset by the decline in revenues from more mature MMOGs, including QQ Fantasy, QQ SanGuo and QQ Huaxia.

The company expects that the third quarter would present stronger seasonality compared to the second quarter for online games due to summer school holidays, although the increase in monetization of games launched in 2008 would be more difficult as the games mature over time.

Tencent has decided to postpone the launch of its two in-house developed MMOGs, which were originally scheduled for launch towards the end of 2009, to the first half of 2010. Although its gaming revenue may be affected in the short-term as a result of this decision, the company believes it will benefit its gaming business over the longer run.

As advertisers are still cautious and the recent improvements in market sentiment are still fragile, Tencent expects the outlook of the online advertising industry to remain challenging in the second half of 2009.