In a candid statement during Tencent's annual meeting in Shenzhen, CEO Pony Ma acknowledged significant challenges facing the company's video games business due to intensified competition.
While video games contribute over 30% to Tencent's revenue, Ma expressed concerns that Tencent has fallen behind competitors who have successfully launched new gaming hits. This admission underscores the broader question of whether Tencent, as the world's largest gaming company and the operator of China's largest social network, WeChat, can maintain its position as China's leading tech company amid escalating competition and disruptive technological shifts.
Ma highlighted that Tencent's flagship business is gaming, but over the past year, the company has encountered substantial challenges. He admitted to feeling at a loss as competitors continued to produce successful new products, leaving Tencent struggling to match their achievements. Furthermore, Ma acknowledged that some of Tencent's recent game launches did not perform as well as anticipated.
Despite the challenges in the gaming sector, Ma expressed confidence in Tencent's progress in the field of artificial intelligence (AI). According to him, Tencent has caught up and can now follow the pace set by first-tier companies. While he refrained from claiming leadership, Ma emphasized that Tencent is no longer significantly behind in the AI race.
Looking ahead, Ma outlined Tencent's focus on integrating its "Hunyuan" AI model into various business scenarios to enhance efficiency. He emphasized a pragmatic approach, indicating that in the short term, significant AI-native applications might not emerge within the next one or two years. This cautious stance suggests that Tencent aims for a methodical and sustainable integration of AI technologies into its operations.
Beyond gaming and AI, Ma addressed Tencent's strategic interest in live-streaming e-commerce. With a desire to make WeChat more competitive in this space, Ma highlighted the need for innovation within the WeChat ecosystem. Despite being a robust platform with a significant user base, WeChat's age—12 years at the time of Ma's speech—poses a challenge, requiring Tencent to find new avenues for growth and relevance in the evolving tech landscape.