Tencent cleared $10 billion game revenue in 2016

Chinese company pulls away from rival publishers with new and old hits and Supercell acquisition

By Matthew Handrahan.Published Wednesday 22nd March 2017, 11:10am GMT

Tencent's game revenues rose 25% to pass $10 billion in 2016, significantly more than established rival publishers like Activision Blizzard.

In the calendar year ended December 31, 2016, Tencent earned 70.844 billion ($10.3 billion) in revenue from its online games, encompassing both smartphone and PC client products. According to an official report released today, the 25% year-on-year rise in revenue was driven by a mix of established hits like Riot's League of Legends, and new releases like the first-party Honour of Kings, which set a new internal record for a smartphone game with 50 million DAUs.

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Indeed, smartphone titles are an increasingly important aspect of Tencent's business, showing more rapid growth than the company's PC portfolio. In Q4, for example, smartphone game revenue was 10.7 billion ($1.6 billion), a 51% increase over the same quarter in 2015.

App Annie's data indicated that Tencent earned more in 2016 than any other publisher, climbing from sixth place to the top spot in the space of a year.

Of course, 2016 was the year that Tencent acquired the majority (84%) of Supercell, in a deal that valued the whole company at more than $10 billion. The addition of games like Clash of Clans and Clash Royale will have provided a significant boost the company's bottom line, which was healthy enough already.

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It also puts more distance between Tencent's games revenue and that of the industry's other major publishers. Last year, for example, Activision Blizzard earned $6.61 billion in GAAP revenues.

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