30th January 2024 – (Shenzhen) Pony Ma, the chief executive and co-founder of Tencent Holdings, addressed the company’s annual meeting held at a stadium in Shenzhen, acknowledging the great challenges faced by Tencent’s video games business due to competition while emphasizing the progress made in artificial intelligence (AI) development.
During his speech on Monday, Ma stated that Tencent had been complacent in the gaming sector, while competitors had launched successful new games. Video games currently contribute to over 30 per cent of Tencent’s revenue.
The contents of Ma’s speech were published by Chinese media outlet Jiemian online. A source familiar with the matter, who preferred to remain anonymous due to media restrictions, confirmed the authenticity of the speech.
Ma’s remarks shed light on concerns surrounding Tencent’s ability to maintain its position as China’s leading tech company amid intensifying competition and the emergence of disruptive technologies.
Tencent refrained from commenting on Ma’s speech when approached for a response on Tuesday.
“Gaming is our flagship business… However, in the past year, we have encountered significant challenges,” stated Ma. “We find ourselves at a loss as our competitors continue to release new products, leaving us feeling as if we haven’t achieved anything.”
Ma further acknowledged that the performance of Tencent’s recently launched games had fallen short of expectations.
Ma’s comments come at a time when Chinese game developers miHoYo and NetEase have surpassed Tencent with successful titles like Genshin Impact and Eggy Party. While Tencent’s previous hits, such as Honor of Kings and PUBG Mobile, continue to generate strong revenue, more recent releases have failed to meet expectations.
Regarding AI, Ma expressed confidence in Tencent’s progress. “We have finally caught up with the leading companies. We may not consider ourselves to be at the forefront, but we are no longer lagging too far behind,” he stated.
Ma emphasised that Tencent’s focus should now be on integrating its “Hunyuan” AI model into various business scenarios to enhance efficiency, rather than rushing to convert AI into products.
“In the short term, within the next one or two years, I believe we will not witness massive AI-native applications,” Ma added.
Another aspect highlighted in Ma’s speech was live-streaming e-commerce. Tencent has been striving to make WeChat more akin to ByteDance’s short video platform Douyin in recent years, which has been reaping significant revenue from live-streaming e-commerce.
“WeChat boasts a robust user base and ecosystem. However, it is 12 years old… The challenge lies in discovering new opportunities within the mature WeChat platform,” Ma explained.