At Tencent’s annual meeting in Shenzhen, Ma admitted that the company had become complacent in its gaming sector, allowing competitors to release new, successful games.
The company, along with peers like Alibaba Group Holding Limited (NYSE:BABA), noted a significant reduction in their external investments as the economy battled a slowdown, regulatory challenges, and geopolitical tensions.
Video games form over 30% of Tencent’s revenue, making this a critical area, Reuters reports. Last week, the Chinese gaming regulator removed proposed rules curbing video game spending from its website, giving the industry quite a respite.
A report by Chinese media and a knowledgeable source confirmed Ma’s speech, underlining Tencent’s struggle to maintain its top position in China’s tech industry amid fierce competition and emerging technologies.
Ma expressed concern over Tencent’s recent gaming performance, stating that newly launched games haven’t met expectations.
This comes as Chinese developers like miHoYo and NetEase Inc (NASDAQ:NTES) gain popularity with titles like “Genshin Impact” and “Eggy Party,” overshadowing Tencent’s established hits like “Honor of Kings.”
However, Ma also noted that Tencent has made strides in AI, now keeping pace with leading companies.
He emphasized integrating Tencent’s “Hunyuan” AI model into various business aspects to enhance efficiency rather than rushing AI into product development. Recent reports indicated that China approved over 40 AI models for public use in the past half-year.
Ma doesn’t foresee significant AI-based applications emerging in the next couple of years.
He also focused on the potential of live-streaming e-commerce, aiming to evolve WeChat, Tencent’s robust platform with a vast user base and ecosystem, to discover new growth avenues similar to ByteDance’s Douyin.
Meanwhile, Tencent invested nearly $890 million (6.42 billion yuan) to acquire over 70,601 square meters of land in Beijing’s Haidian district to provide centralized office space for its 12,000+ employees.
Tencent stock lost over 27% last year.
Price Action: TCEHY shares closed lower by 1.22% at $36.55 on Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
Photo by katjen via Shutterstock
Get the latest stock analysis from Benzinga?
This article Tencent CEO Pony Ma Shifts Focus to AI as Gaming Faces Tough Competition, Reveals New Plans originally appeared on Benzinga.com
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.