On March 20, Tencent announced its fourth quarter and full-year 2023 results. According to the financial report, Tencent's online game business revenue in 2023 will be 179.9 billion yuan, a year-on-year increase of 5.4%. Among them, the revenue of games in the domestic market increased by 2% to RMB126.7 billion, and the revenue of games in the international market increased by 14% to RMB53.2 billion, and the proportion of revenue from the international market in Tencent's total game revenue increased to 30% for the first time in 2023, and the number of key popular games also expanded to 8.
Nandu reporters paid attention to the fact that in the latest financial report, Tencent did not disclose the income or turnover related to "Yuan Dream Star", but Martin Lau, president and executive director of Tencent, said in the performance communication meeting that he was "very satisfied with "Yuan Dream Star".
The financial report also mentioned that in the fourth quarter of 2023, due to the decrease in the contribution of "Honor of Kings" and "Peace Elite", Tencent's game revenue in the domestic market fell by 3% to RMB 27 billion. In this regard, Martin Lau also said that in the future, they may achieve steady and sustainable growth through operational or organizational changes.
The proportion of annual revenue in the international market of Tencent Games increased to 30% for the first time
According to the financial report, in 2023, Tencent Games' international market revenue will increase by 14% year-on-year to 53.2 billion yuan, increasing to 30% of Tencent's total game revenue for the first time, which is a new high since the first announcement of international market revenue in the third quarter of 2021.
At the performance communication meeting, Martin Lau, President and Executive Director of Tencent, emphasized that Tencent Games will perform well in the international market in 2023. "The overall growth of overseas games is good, the global game industry has actually gone through the ebb and flow after the epidemic, and the overall growth is very slow, but our growth is far greater than the overall growth of the overseas industry. ”
According to the "2024 Mobile Game Market Report" released by data.ai, global mobile game consumer spending will decline by 2% year-on-year to $107.3 billion in 2023, which is the second consecutive year of decline.
In terms of specific games, the financial report pointed out that in 2023, games such as "PUBG MOBILE", "VALORANT", and "Goddess of Victory: Niki" will perform well. Among them, PUBG MOBILE overcame the impact of the decline in player activity in 2022 and returned to significant growth in 2023. According to Sensor Tower data, as of December 2023, the total revenue of "PUBG MOBILE" is approaching $4.5 billion, of which the revenue in the second half of 2023 is close to $500 million, and "Goddess of Victory: Nikki" has a high turnover after its global launch in the fourth quarter of 2022, and the statistics of Diandian data show that the game has received a global turnover of 719 million yuan in the first month of its launch, and the cumulative turnover of mobile terminals is about 3.79 billion yuan as of March 10, 2024.
At the same time, after Tencent Games has made breakthroughs in multiple regional markets such as Europe, the United States, Japan, South Korea, and the Middle East through self-research layout, strategic investment, and global distribution, the company is promoting more game products to go overseas and accelerate the pace of globalization of game business.
Game revenue fell slightly by 2% in the fourth quarter, Martin Lau: Very satisfied with "Yuan Dream Star".
According to the financial report, in the fourth quarter, Tencent's value-added service business revenue mainly provided by the game business decreased by 2% year-on-year to 69.1 billion yuan. Game revenue in the international market increased by 1% to RMB13.9 billion, while game revenue in the domestic market decreased by 3% to RMB27.0 billion, mainly due to the lower contribution of Honor of Kings and Peace Elite.
At the performance communication meeting, Martin Lau said that for the flagship games "Honor of Kings" and "Peace Elite", they may achieve steady and sustainable growth through operational or organizational changes in the future.
It is worth mentioning that the reporter from Nandu noticed that Tencent did not mention the income or turnover of the much-watched "Yuan Dream Star" in the financial report this time. The family carnival game "Dream Star" will start its public beta in the fourth quarter of 2023 and invest 1.4 billion yuan in the first phase to support the development of the game ecosystem, coupled with Tencent's sales and marketing expenses at a low level in the fourth quarter of 2022, Tencent's sales and marketing expenses in the fourth quarter of 2023 have increased significantly.
However, at the performance communication meeting, Martin Lau said that he was very satisfied with "Yuan Dream Star". "We launched "Dream Star" in the fourth quarter of last year, and then it broke 10 million DAUs (daily active users) in the fourth quarter, and we are quite satisfied with this result. Many of our games don't start with a peak and go down, but they can continue to go up. In the future, I believe that we can give full play to our long-term operation capabilities and continue to nurture social skills, different gameplay, social scenes, UGC, etc., and I believe that games like "Dream Star" are game categories that we want to cultivate for a long time, and we can build it into a family leisure game platform with social attributes. ”
According to the performance observation of Tencent games in the first quarter of 2024 released by DataEye, a well-known research institution, within three months after the open beta, "Yuanmeng Star" added 129 million new registered users across all channels in three months, which can be called one of the fastest-growing games in game history in terms of the number of registered users.
The number of key popular games has been expanded to 8, and the turnover of mini games has increased by more than 50%
The financial report also shows that in 2023, the number of key popular games in the local market with an annual turnover of more than 4 billion yuan and an average quarterly daily active user scale of more than 5 million (mobile games) or 2 million (PC games) has risen from 6 to 8, including "Honor of Kings", "Peace Elite", "CrossFire: Gunfight King", "Naruto", etc. Driven by this, Tencent's domestic game market will recover in 2023, with revenue increasing by 2% year-on-year to 126.7 billion yuan.
In addition, new games released in recent years, such as "Battle of the Golden Shovel", "League of Legends Mobile Game" and "Dark Zone Breakout", have grown rapidly and are becoming a new first-tier echelon of Tencent Games. According to the calculation of DataEye Research Institute, the revenue of "Golden Shovel Battle", "League of Legends Mobile Game" and "Dark Zone Breakout" increased by 152%, 120% and 213% year-on-year respectively in February this year.
It is reported that in 2024, Tencent Games will also reserve a number of new products in the local market, including "Dawn of the Stars", "Operation Delta", "World of Taris", "Need for Speed", "Dungeons and Warriors: Origins" and other masterpieces. Among them, Dungeons & Warriors: Origins is one of the most talked-about games to be launched in 2024. HSBC Global expects Dungeons & Warriors: Origins to generate revenue of RMB5.8 billion this year, equivalent to 4% of Tencent Games' revenue in its home market, and believes that the game's revenue could rise further to RMB11 billion in 2025.
In addition, the financial report shows that the annual growth of Tencent mini games is more than 50%. At the performance communication meeting, Martin Lau specifically mentioned that Mini Program games have become the leading casual game platform in China. "The revenue generated by Mini Program games is very high-quality, and in the domestic casual game industry, Mini Programs have become the largest platform, allowing us to connect with more than 400 million monthly active users and more than 300,000 developers. There are more than 100 developers with a turnover of more than 10 million per quarter, and the Mini Program allows us to cover a lot of users that we can't reach in our traditional game business, and also allows us to have a better relationship with the entire casual game developer. ”
Written by: Nandu reporter Lin Wenqi