China-based Internet and gaming giant Tencent reported today that total revenues had jumped 28 percent in the third quarter while profits grew 46 percent. Although both appeared to be big increases, the profit growth fell below the 57 percent forecasted by analysts.
In a press release, the company — which counts Riot’s League of Legends multiplayer online strategy game among its top moneymakers — said it had $3.2 billion in revenue for the quarter and $923 million in profits. That compares to $2.53 billion in revenues and $630 million in profits for the same quarter a year ago.
League of Legends is on pace for generating more than $1 billion this year from in-game spending from its players.
“We achieved another quarter of solid growth in our platforms, revenue, and earnings,” said Ma Huateng, the chairman and chief executive of Tencent, in a statement. “Given our traffic leadership and logged-in relationship with users, together with the proven scale of performance-based advertising services in China and overseas, we see ample scope for growth.”
The company is one of China’s high-tech giants, known for its social-messaging platforms, Weixin, WeChat, and QQ, as well as its online and PC games. The company said it saw solid growth across all three categories. The main area where it is stumbling is e-commerce, thanks to heated competition from Alibaba.
Tencent said social network revenues, led by its WeChat and QQ services, increased by 47 percent from the same quarter a year ago. Online games revenues grew 34 percent from the same quarter a year ago. In particular, the company said its first-person shooter Crossfire continues to perform strongly and that it hopes to deliver more titles in that category.
Mobile gaming was more problematic. While revenues were up from a year ago, the company said revenue declined from the previous quarter because of problems implementing a new log-in protocol. That, in turn, delayed the company from releasing updates to many of its games during the quarter.
The company said the problem was resolved in October, and updates to games returned to their normal pace.
Tencent also reported that revenue from e-commerce products fell sharply in the quarter as it continues to shift those products to a new partnership with JD.com, China’s version of Amazon.com.