Chinese gaming and social media giant Tencent Holdings reported a 65% rise in quarterly profit driven by a surge in sales of its popular video games.
Tencent, the world’s largest gaming firm by revenue, reported a profit of 47.77 billion yuan ($7.42 billion U.S.) for the three months ended March 31, higher than the average analyst estimates published by Refinitiv Data that called for a profit of 35.45 billion yuan.
Tencent’s revenue rose 25% to 135.3 billion yuan, versus market expectations of 134.39 billion yuan. Tencent said its revenue from online video games grew by 17% in the quarter.
The results come as Chinese regulators have stepped up a sweeping anti-trust clampdown on technology companies. Tencent was told by Chinese anti-trust regulators to pay a fine that could exceed 10 billion yuan, give up exclusive music rights, and sell some of its music streaming assets.
Tencent said earlier this week that it is facing heightened scrutiny from Chinese regulators. Tencent is also facing mounting competition from ByteDance, the owner of TikTok, and the similar short-video platform Douyin, which have made sizeable inroads into the video games market, including acquisitions of several game developers.
Tencent, which gets 32% of its revenue from video games, unveiled more than 60 new titles at its annual video gaming conference last week. It is looking to launch a mobile version of its hugely popular League of Legends game, and also a Pokemon game in partnership with Nintendo.