Tencent sales grow fastest since 2021 in solid start to rocky year

Hong Kong – Tencent Holdings’ revenue grew at its fastest pace in more than three years, affirming investors’ expectations that China’s gaming and social media leader will weather a potential global downturn in 2025. 

The WeChat operator reported a faster than anticipated 13 per cent rise in sales to 180.02 billion yuan (S$32.4 billion) in the March quarter. Net income rose 14 per cent to 47.8 billion yuan, missing estimates in part because of rising spending on artificial intelligence (AI) research and initiatives.

The numbers may lend confidence to investors who regard China’s most valuable company as resistant to much of the economic turmoil surrounding the Trump administration’s tariffs campaign.

Its shares have gained more than 20 per cent in 2025.

Yet Tencent runs a giant cloud, advertising and fintech services business vulnerable to economic shocks and a slowdown in domestic consumption.

Tencent is among the biggest beneficiaries of a Chinese tech renaissance triggered by DeepSeek, whose January release of the R1 model upended the idea of US AI dominance and rekindled interest in home-grown technology.

Tencent rushed to buy up AI chips around the end of 2024 to serve growing demand from cloud clients. Its apps, including WeChat and the ChatGPT-style Yuanbao, have gained users since integrating with DeepSeek’s offering. 

To counter a plateauing home market, the world’s biggest games publisher has also focused on grooming what it calls evergreen franchises – established titles that players will stick with through multiple versions and updates.

Breakout hits of 2024, Dungeon & Fighter Mobile and Delta Force, helped Tencent stem a contraction in its marquee business.

But it remains to be seen whether players will stick around. Still, investors are betting it will successfully experiment with newer initiatives such as mini-games and the Hunyuan foundation model.

Executives including billionaire founder Pony Ma have outlined plans to rely on both third-party and self-made models to win the AI race, mirroring a playbook that seeded Tencent’s gaming leadership two decades ago.

Many observers have drawn parallels between AI and the rise of smartphone apps – a tidal shift that will create new winners and threaten the old guard.

Tencent’s long-time rival Alibaba Group has become more aggressive, pledging to spend billions to build data centres and investing in many of China’s up and coming AI platforms.

For now, WeChat remains Tencent’s most reliable asset as it takes on bigger monetisation roles in areas from advertising to mini-games to TikTok-style shopping.

Though broader consumer sentiment remains shaky, Tencent has sought to introduce even more features to its all-in-one platform – including a gifting function that has received mixed reception from both merchants and buyers.

Tencent also remains the undisputed leader in mobile games. It earned roughly four times as much as the second-closest publisher in 2024, according to Appfigures.

It is unclear whether Tencent can replicate the success of 2024.

Its pipeline for 2025 includes highly anticipated titles like Honour Of Kings: World and the Chinese roll-outs of Path Of Exile 2 and Goddess Of Victory: Nikke. But few are considered sure-fire hits like DnF Mobile, which owed its success to loyal players trying out a fresh version of their PC favorite.

In a deal announced in March, Tencent said it will invest about US$1 billion (S$1.3 billion) to acquire a 25 per cent stake in a new entity holding Ubisoft Entertainment’s most celebrated intellectual properties.

That could give the Chinese company a bigger say in shaping the future of global franchises like Assassin’s Creed, which Tencent is adapting for mobile. BLOOMBERG