China's Tencent Reports First Ever Annual Revenue Decline Due to COVID-19 and Regulatory Crackdown

by Yoo Jaehoon

Published 22 Mar.2023 20:36(KST)

China's largest tech company Tencent has reportedly experienced a decline in annual revenue for the first time ever, according to major media outlets on the 22nd (local time). This is attributed to the prolonged economic downturn caused by the COVID-19 pandemic and intensified regulations.

According to reports, Tencent announced that its revenue last year amounted to 554.55 billion yuan (approximately 105 trillion won). This represents a 1% decrease compared to the previous year and falls short of market expectations (555.15 billion yuan).

Foreign media analysts attribute Tencent's first-ever annual revenue decline to the Chinese government's crackdown on the tech industry over the past two years. Prior to President Xi Jinping's third term confirmation, China intensified regulations across all sectors, including technology and education, while continuing anti-corruption measures.

As Tencent's performance weakened, the company implemented layoffs and reduced employee benefits as part of its cost-cutting measures.

However, China has been issuing new game licenses since the end of last year. According to foreign media, the industry is cautiously optimistic about a potential recovery in business conditions as a result.