Tencent Lagging Behind in Video Games Division, says Pony Ma

Pony Ma, chief executive and co-founder of Tencent Holdings, has said that the company's video games business faces great challenges from competitors but is catching up in artificial intelligence (AI) development.

Ma, speaking at Tencent's annual meeting in a stadium in Shenzhen on Jan 29, said that the company has been resting on its laurels in gaming while competitors have delivered new hits. Video games account for more than 30 percent of Tencent’s revenue. Chinese media outlet Jiemian published parts of Ma’s speech online. A person with direct knowledge of the matter, who declined to be named because they are not permitted to speak to the media, confirmed the contents.

Ma’s speech underscores concerns about whether Tencent, the world’s biggest gaming company and the operator of China’s biggest social network, WeChat, can defend its status as China’s No.1 tech company at a time marked by intensifying competition and new disruptive technologies.

“Gaming is our flagship business ... But in the past year, we have faced significant challenges,” Ma said, “We have found ourselves at a loss, as our competitors continue to produce new products, leaving us feeling like having achieved nothing. ”

Ma added that the new games that Tencent has launched had not performed as well as the company had hoped.

Ma’s remarks come at a time when Chinese game developers miHoYo and NetEase have outshone Tencent with hit titles like Genshin Impact and Eggy Party. While Tencent’s past hits, such as Honor of Kings and PUBG Mobile, continue to deliver strong revenue, more recent products are falling short of expectations.