Programmatic Lunch

Tencent is slashing its marketing budget for games

Tyrone Stewart

TencentTencent is cutting its mobile budget for its gaming division as the Chinese government cracks down on the industry with regulations and its freeze on approving new games.

The tech giant’s gaming division is China’s largest gaming company revenue, but it’s now asking marketing executives to control their cash flow and curtail spending, reports Bloomberg. This means that any games that don’t yet have government licenses will have to return their unspent money to Tencent.

The regulations imposed by China have caused problems for the country’s entire gaming industry. And Tencent has been hit hard, suffering its first profit drop in around 10 years and seeing the loss of more than $200bn in market value since January.

“Marketing funds have been chopped back,” a Reuters source confirmed to the publication. Although, it is not known by how much Tencent has reduced its budget by.

While Tencent remains a strongly profitable company, according to Bloomberg, its total debt has climbed to $26bn and analysts expect it to continue its slow revenue growth.