Money Games: Tencent

Tencent will be in your market soon, if it isn't already

Across the full Tencent games portfolio, you reach around 20 million peak concurrent users, or slightly less than the population of Australia. That's what happens when you're the number one Chinese games company.

Tencent Mini Casual Game Concurrent Users

Chinese Game Company Revenues ($ million)*

I was lucky enough to have lunch with Bo Wang from Tencent recently, and it is clear that despite Tencent's advantages the company is actively expanding into new areas. Now annual market growth has cooled to a mere 30 per cent (from 70 per cent-plus), Tencent is looking to leverage its strengths across segments domestically and internationally.

But as with all things Tencent, this isn't just talk and it isn't small. There are domestic partnerships:

• China Unicom (fixed line, 3G, operations, "QQ Wallet")
• Hunan TV (talent, animation, online/mobile games)
• China Merchants Bank (financial services)

There are also international partnerships/investments:

• Digital Sky Technologies (Facebook, Zynga, Mail.ru investor)
• Vina Games (Vietnamese online games/internet)
• MIH India Global Internet (licensed software, content & trademarks)
• Naspers (36 per cent Tencent investor) with global reach in high growth markets

All the major videogame, technology and media companies in North America and Europe are both fascinated and slightly nervous about the major Chinese companies entering their home markets. The only advice I can give is to learn from Tencent fast, because these guys mean business and they know what they're doing. It is only a matter of time before they become as strong internationally as they are at home, so watch out!