Tencent Reports 47% Profit Surge as Gaming and AI Drive Growth

President-elect Donald Trump has announced William "Bill" McGinley will serve as the White House Counsel in his upcoming administration. Chinese tech giant Tencent announced a 47% year-on-year profit surge in the third quarter, surpassing analyst expectations, driven by strong performances in gaming, advertising, and AI-powered cloud services. Tencent’s profit attributable to shareholders reached 53.23 billion yuan ($7.37 billion), outpacing the LSEG forecast of 46.18 billion yuan. Revenue rose by 8% to 167.19 billion yuan, just slightly below the 167.82 billion yuan projection.

Gaming remains Tencent’s core strength, with domestic gaming revenue up 14% to 37.3 billion yuan, while international gaming revenue increased by 11% to 14.5 billion yuan. Tencent credited “evergreen potential” in both new and existing games for this growth.

Advertising revenue, rebranded as marketing services, saw a robust 17% increase to 29.99 billion yuan, driven by high advertiser demand for Tencent’s short videos, mini-programs, and search features within the Weixin (WeChat) messaging app. Global monthly average users for Weixin reached 1.38 billion in the third quarter, marking a 3% year-over-year increase.

AI also played a significant role in Tencent’s growth. The company reported notable gains from its self-developed AI tools, which enhanced marketing services, search functions, and cloud operations. Tencent’s large language model capabilities contributed to increased commercial queries and click-through rates within Weixin’s search feature. AI-driven ad targeting has also seen substantial adoption, with more than 200,000 accounts now using Tencent’s AI-powered ad creation tools, a nine-fold increase from the previous year.

In response to growing competition from ByteDance’s Douyin (China’s TikTok), Tencent has bolstered its mini-programs and short video offerings. The gross merchandise value (GMV) of mini-program e-commerce expanded by the “high teens” from last year, reaching over 2 trillion yuan as users turned to the platform for food orders, EV charging, and medical services.