Money Games: Tencent

While not going into depth on how Chinese online/mobile videogames business models work, there are a few key elements to note:

• Community focus around the games experience
• Active interaction with gamers to refine both user experience and commercialisation
• Focused commercialisation based around high volume, micro-transaction subscriptions, virtual items and some advertising
• Games as a service, not a product, with multi-year revenue streams, revenue sharing post recoupment of development budgets and continuous, low cost development through game lifecycles post-launch

The charts below help to understand Chinese online game dynamics in general.

Chinese Gross Game Revenue Profile (¥) Example*

Chinese Total Staffing per Game Profile Example*

And what does all of this produce? 49 per cent games revenue growth over the last five quarters, and around seven million peak concurrent users of Tencent's mini casual games alone. Snap your fingers, and more than the population of Ireland are playing a Tencent mini casual game - not 7 million uniques per month, 7 million uniques right now.

Tencent Quarterly Game Revenue (¥ million)