Tencent Reports $1.8B Revenue For 2009

By Alicia Ashby On March 17, 2010 · Leave a Comment

Today the Chinese social network and games operator Tencent announced 2009 annual revenues of $1.8 billion dollars, up 74% from last year's $1 billion in revenue. Most of Tencent's revenue is generated by sales of virtual goods in its games and other social networking products. Tencent's QQ messenger serves about 523 million active users, primarily teenagers. Tencent generated 2009 profits of $755 million, an 85% year-over-year increase.

Q4 2009 accounted for $229 in revenue, making it the company's weakest quarterly performance for the year. In Chinese online businesses, however, Q4 is typically a weak quarter due to seasonality. Tencent's Q4 performance in 2009 is actually its best to date, beating analyst expectations.

Tencent's best revenue quarter in 2009 was Q3, also driven by seasonality, as many students and workers enjoy holiday periods over the summer. Tencent expects to see a substantial increase in performance during Q1 2010, which will include New Year's holiday periods, in light of its strong Q4 2009 numbers.

Gaming revenue increased about 1.7% during Q4 2009, despite the weak seasonality. The company attributed this to strong performance of its primary MMOs, Dungeon & Fighter and Cross Fire, due to promotions and release of expansions. Revenue from the newly-launched Web MMO Silk Road Online also contributed to growth as revenues from older MMOs declined.