After years of meteoric growth in one of the world's most dynamic and connected markets, Chinese internet companies have been under pressure since 2020.

The authorities are particularly picky about competition and personal data issues.

The main tech players have been pinned down, after years of relative laxity, which has destabilized the sector.

Tencent had not been spared: to limit video game addiction among the youngest, the authorities have imposed since 2021 a drastic weekly limit of three hours for online games to under 18s.

In this context, the world's number one video game recorded a 2022% drop in net profit for 16, to 188.2 billion yuan (25.3 billion euros).

It was 224.8 billion yuan in 2021 and had grown 41 percent year-on-year.

Ambitions abroad

Its turnover for 2022 is down 1% year-on-year, to 554.5 billion yuan (74.7 billion euros).

The restrictions targeting the tech sector had weighed heavily on Tencent in the first half of 2022: the world's number one in the sector had recorded in August the first decline in its quarterly turnover since 2004.

Its relations with the government now seem to have calmed down: after a year and a half of hiatus, the group has been regularly obtaining video game licenses in China since November.

This sesame is mandatory to market a game on the largest world market.

To bounce back, the group is now looking for other outlets, particularly in Europe where the firm is strengthening itself by taking stakes in emblematic studios.

Last year, Tencent had formalized a rise in the capital of the French giant Ubisoft.

Abroad now accounts for 33% of the turnover of the video games branch of the Chinese group (against 28% a year earlier).

ChatGPT

This video games activity abroad allowed Tencent to see its sales rise again in the fourth quarter (+3% compared to the previous quarter).

Tencent is a key player in tech in China because of the omnipresence of its WeChat application (messaging, online payment, social network).

It is present on almost all phones in the country and serves as a means of payment daily by hundreds of millions of Chinese, who now use very little cash for their purchases.

On Wednesday, Tencent said nothing in its statement about its progress in designing an equivalent in China to ChatGPT, the American conversational robot doped with artificial intelligence whose prowess is followed with passion.

Its competitor, Chinese internet giant Baidu, unveiled its own last week in Beijing. But no consumer launch date has yet been announced for "Ernie Bot," which works in Mandarin and is aimed only at the Chinese market.

© 2023 AFP