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UPDATE 2-Tencent advertising boost softens blow of slower gaming growth
August 12, 2015 / 9:54 AM / 2 years ago

UPDATE 2-Tencent advertising boost softens blow of slower gaming growth

* Q2 revenue 23.43 bln yuan, slightly below forecasts

* Overall gaming revenue growth slows to 17 pct

* Advertising revenue nearly doubles (Recasts, adds detail, shares)

BEIJING, Aug 12 (Reuters) - Tencent Holdings’ soaring advertising income softened the blow of slower growth at its core gaming business as China’s biggest social network and online entertainment company posted a 19 percent rise in second-quarter revenue.

Smartphone games, a priority for the company as it seeks to offset the declining popularity of PC gaming, appeared to be hardest hit. Mobile gaming revenue grew by only 11 percent year on year, compared with 82 percent in the previous three months.

Revenue at the gaming unit as a whole was up 17 percent year on year for the three months to June 30, against 29 percent in the previous quarter.

The company will aim to port some of its successful PC games to the mobile platform, executives said on a conference call.

Tencent’s online advertising arm, meanwhile, nearly doubled quarterly revenue to 4 billion yuan ($626.5 million), the company said. Video advertising performed especially well, accounting for the bulk of advertising revenue, executives said.

The operator of China’s most popular messaging app, WeChat, has recently ramped up its online advertising, following the lead of U.S. social media peer Facebook. Global monthly users of WeChat exceeded 600 million at the end of June, Tencent said.

Overall revenue for the quarter rose to 23.43 billion yuan, the company said in Wednesday’s earnings statement, against a consensus forecast of 24.12 billion yuan in a Thomson Reuters Smartestimate poll of 11 analysts.

Shares in Tencent fell 4.19 in Hong Kong but remained flat in after-hours trading following the results. ($1 = 6.3845 Chinese yuan renminbi)

Reporting by Gerry Shih; Editing by David Goodman

Our Standards:The Thomson Reuters Trust Principles.
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