Tencent reported first-quarter earnings on Wednesday, its slowest revenue growth since going public in 2004.
Revenue rose just 0.1% to 135.5 billion yuan ($20.06 billion), missing average estimates, while net income fell 51% to 23.4 billion yuan.
The company's core gaming business was lackluster. Domestic game revenue fell 1% year-on-year in the last quarter. According to the company, recent measures to protect young gamers in China had directly or indirectly affected the number of paying users.
Even the international games business, which posted satisfactory growth last quarter, was slowing, with revenue up 4%. The growth in revenue was mainly attributable to VALORANT and Clash of Clans, Tencent said, adding that Apex Legends Mobile, co-developed by itself and EA, is coming out on Android and iOS devices on May 17, 2022.
The lockdown-fueled gaming boom is fading as more countries and regions return to normal patterns. International gaming giants Sony and Nintendo both also saw their gaming spending fall during the quarter.
Revenue from its fintech and cloud business recorded a 10% increase in the quarter to 42.8 billion yuan, slightly below expectations. Digital payments transactions have been weak since mid-March 2022, as re-lockdowns in major cities negatively impacted transportation, restaurants and retail. Cloud revenue suffered a mild decline after the company cut loss-making contracts and ventured into services beyond infrastructure.
In the last quarter, the fintech and cloud segment has surpassed gaming as its No. 1 revenue driver.
The giant's advertising business continued to suffer, with revenue down 18% year over year due to weakness in advertiser categories such as education, gaming and internet services.
Hit by China’s tightening regulations on the tech sector and economic headwinds, Tencent’s shares have halved in value since their peak in January last year, wiping away $440 billion in market value.