Written by Josh Yeh
HONG KONG (Reuters) – Tencent Holdings Ltd’s chief executive officer and co-founder Pony Ma said his company’s video games business faces major challenges from competitors, but artificial intelligence (AI) ) development is catching up.
Speaking at Tencent’s annual general meeting at a stadium in Shenzhen on Monday, Ma said the company was resting on its laurels in the gaming space as competitors released new hits. Video games account for more than 30% of Tencent’s revenue.
Chinese media outlet Jiemen published part of Ma’s speech online. A person with direct knowledge of the matter confirmed the details on condition of anonymity because he is prohibited from speaking to the media.
Ma’s speech comes at a time when Tencent, the world’s largest gaming company and the operator of China’s largest social network WeChat, has become China’s No. This highlights concerns about whether the company will be able to protect its status as a high-tech company.
Tencent did not respond to a request for comment on Tuesday.
“Games are our core business… but over the past year, we have faced significant challenges,” Ma said. “We feel like we are accomplishing nothing and are at a loss as our competitors continue to create new products.”
Ma added that new games released by Tencent have not performed as well as the company expected.
Ma’s comments come at a time when Chinese game developers miHoYo and NetEase are outperforming Tencent with hit titles such as “Genshin” and “Eggy Party.” Tencent’s past hits such as Honor of Kings and PUBG Mobile continue to generate strong revenues, but recent products have fallen short of expectations.
Ma said Tencent has caught up when it comes to AI. “We are finally able to keep up with the pace of the leading companies. We don’t consider ourselves the furthest ahead, but at least we’re not far behind,” he said. Ta.
Ma said Tencent should now focus on integrating its “Hunyuan” AI model into various business scenarios as a way to increase efficiency, rather than quickly turning AI into products.
“In the short term, it feels like we’re still not going to see large-scale AI-native applications within the next year or two,” he said.
Another focus of Ma’s talk was live streaming e-commerce. Tencent has been trying to move WeChat closer to ByteDance’s short video platform Douyin, which has generated huge revenues from live streaming e-commerce in recent years.
“WeChat is the most robust platform in terms of daily user numbers and its ecosystem. But it’s 12 years old…Now it’s up to us how we can find new shoots from the old tree that is WeChat.” It’s a big problem,” Ma said.
(Reporting by Josh Ye; Editing by Raju Gopalakrishnan)
