Tencent is known to gamers for their investments into Riot and its League of Legends. As little as $400 million was invested in Riot and its gaming, hope you were sitting when your eyes spotted that number. That’s the most known fact about Tencent, though the company is growing into the most profitable and here’s why.
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The company that has more sales than Facebook, more users that Twitter and their market cap is bigger than those of HP and Cisco. Fifteen years ago Shenzhen became a home for something that became the hottest tech company the world has ever seen. Their service include more than just video games which they are funding massively by the way.
Tencent Games is platform is just one of the services offered by the company. An online game developer and operator that hosts some big titles such as Journey to the Fairyland. These are all online games and because of them Tencent has been recognized as the largest online gaming community in China. Their in-house development is accompanied by cooperation with other companies to bring the most diverse games around the world. The most known subsidiary is Riot and their League of Legends.
Tencent QQ Instant Messaging Service for desktop is hugely popular among the Internet users in China. As of March 2013, the QQ has more than 815 million active accounts with almost 175 million simultaneous online users at the peak time. Imagine the server cost to support that many people without crashing. QQ International is an English version of the IM service and is available for Windows and Mac OSX.
The Online Media includes a portal and search engine developed by the Tencent. QQ.com is the largest portal in China for news, entertainment products, communities and more. The aim of the portal is to become trend-setting and main-stream Internet media platform. Hundreds of millions use the QQ.com daily. Soso.com is one of the three most popular search engines in China. They really know how to expand their business and make profit.
There are few other services and products offered by the Tencent including software development and e-commerce. The company is funding video games like there’s no tomorrow and that seems to be a good thing. One of the best performing stocks of the decade proves that they are going into the right direction. Since the stock was listed in 2004 in Hong Kong it increased more than 12,200%. With the market cap of $120 billion, which is more than McDonald’s or American Express, the Tencent is one of the most successful companies in the world.
Their platform system does not depend on advertising revenue, unlike those of Facebook, twitter and Google. They took the path of selling virtual products to online gamers seeking to upgrade their interactive gaming experience. More users than Twitter is a fact that says a lot about this approach.
While their popularity in China is rising, analysts say they are facing a hard task ahead. To demonstrate the ability to compete with foreign companies might be a struggle. Although the history shows that Tencent knows how to market and deliver great products and services to the masses. WeChat, the mobile messaging app, has started to spread across Southeast Asia, Mexico and Saudi Arabia.
Last year the company invested $150 million in an e-commerce firm Fab, which suggests that they are starting to spread to the US market. There has been talk about Tencent exploring a purchase of Snapchat. If this happens, they might as well give a good alternative to Facebook.
Dolores is SEO and Digital Marketing consultant who has been completely hog-washed into doing this site by KC.