Tencent bets on cloud computing development overseas amid gaming slowdown

Tencent stated it’ll launch new cloud computing merchandise geared toward abroad markets because it searches for brand new avenues for development amid a slowdown in its core on-line video video games enterprise.

On Thursday, Tencent will host a launch occasion for cloud merchandise particularly geared toward markets outdoors of China, together with a set of cloud-based audio and video merchandise.

The transfer marks a realization that Tencent wants to seek out new sources of development overseas as China’s economic system slows. Apart from continued stress from Covid outbreaks, Chinese language tech corporations additionally face a more durable regulatory surroundings at dwelling.

Tencent, specifically, has been harm by stricter regulation on on-line video games. Final 12 months, Beijing launched guidelines that lower the period of time folks below 18 may play on-line video games to a most of three hours every week. Regulators additionally froze recreation approvals for a number of months, which means corporations like Tencent and rival NetEase couldn’t launch and monetize new titles.

Whereas there are indicators that the gaming crackdown may now be over, Tencent has felt the impression. Home on-line recreation income fell 7% within the third quarter in contrast with a 12 months in the past.

Tencent’s second-biggest income driver is on-line gaming, so a slowdown on this section is a drag on total development.

The Shenzhen-headquartered firm views cloud computing as an space that might choose up the slack. Tencent’s fintech and enterprise companies division, which incorporates its cloud computing division, grew 4% year-on-year within the third quarter.

Chinese language tech giants will not be solely seeking to new enterprise divisions for development, they’re additionally on the lookout for new income streams abroad. E-commerce firm Alibaba has used its AliExpress and Lazada model to broaden overseas, for instance, whereas Tencent has discovered huge success with its on-line video games.

Now, Tencent is banking on cloud computing. The merchandise launched Wednesday concentrate on audio and visible merchandise resembling reside streaming for e-commerce or on-line conferences.

The merchandise are geared toward corporations that need such companies however do not essentially wish to keep the infrastructure, such a servers, or construct these options themselves.

Tencent’s technique may concentrate on making an attempt to enroll world companies with a presence in China in addition to Chinese language corporations increasing overseas. Already, corporations resembling BMW use a few of Tencent’s cloud merchandise.

Because the Chinese language agency expands abroad, it’ll enter a really aggressive cloud computing market dominated by U.S. giants Amazon and Microsoft. Tencent’s worldwide push with cloud computing is comparatively late in contrast with that of rival Alibaba, which expanded outdoors China in the previous few years. Now, Alibaba is among the many 5 largest cloud computing companies on the earth.

Tencent’s concentrate on audio and video merchandise performs to its strengths as one of many world’s largest gaming corporations and the proprietor of WeChat, China’s hottest messaging app with over 1 billion customers.