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Tencent announces restructure as share price continues to tumble

Internet giant hit hard amid bureaucratic lockdown of Chinese games market

With its share price tumbling amid tightened government regulations around video games, Tencent has announced its first restructuring in six years.

The Chinese government has not issued a single game license since March 2018, slowing world's largest games market to crawl, falling to single-digit growth for the first time in a decade.

As the leading social media and game publisher in China, Tencent has been hit particularly hard by the lockdown.

The Chinese internet giant has seen $190 billion wiped from its market value this year.

From a lifetime peak in January of HK $474.60, Tencent's share price has witnessed a protracted decline throughout 2018, and currently sits at HK $323.20.

According to a report from Reuters, Tencent management has opted to consolidate three content business groups to form a new group for cloud and smart industries.

"[Tencent will] further explore the integration of social, content and technology that is more suitable for future trends, and promote the upgrade from consumer internet to industrial internet," the company said in a statement.

In an effort to challenge its main rival Alibaba, which recently supplanted Tencent as the the dominant Chinese firm, the company is also looking to offer new services for its corporate clients.

Additionally, Tencent said it will establish a technology committee focused on research and development, promoting collaboration and innovation.

Described by Bloomberg as the "most disappointing stock trade in the world this year", Tencent has been plagued by negative headlines chronicling its recent misfortunes.

Things were only worsened for the firm in August after it was forced to pull Monster Hunter World from sale in China.

Tencent has also hit some speed bumps internationally; its chart-topping mobile game Arena of Valor failed to make an impact in the West, and the recently promised global launch of WeGame remains an enigma, with the firm even cancelling press interviews with director Vito Wang at Gamescom this year.

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Latest comments (1)

Gus comercial director, Flowmotion Entertainment Inc8 days ago
Tencent has announced its first restructuring in six years.
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