Net profit fell 2 percent to CNY18 billion (USD2.61 billion) in the second quarter, from a year earlier, Tencent said in an earnings report released yesterday. As such, many popular western games are blocked from release in China due to content the ministry finds objectionable, like violence or anti-Chinese attitudes. A regulatory freeze and this week's removal of hit game Monster Hunter: World is hampering that effort, spooking investors long accustomed to Tencent's favoured position as one of China's leading corporate lights.
Although China is notoriously stringent with media censorship, this game licensing freeze is taking the vetting process one step further.
Under pressure to curb gaming marathons on Tencent's smash hit King of Glory (known as Arena of Valor in other territories) mobile multiplayer battle game, the company past year started restricting daily playing times for children.
While mobile games such as King of Glory and PlayerUnknown's Battlegrounds, or PUBG, have generated considerable traffic for Tencent, King of Glory has started a downtrend after more than two years of growth.
"A lot of games have not been approved", said Lau, adding that the government was aware "the restructuring is now affecting the industry as a whole".
Revenue from PC games dropped 5 percent year-on-year and 8 percent quarter-on-quarter.
USA threatens more sanctions on Turkey — JAILED PASTOR
Erdogan responded on Tuesday by announcing a boycott of American electronics after Trump's decision to hike tariffs. As the row deepens, Turkey has reached out to European allies and spoken of improving strained ties with the bloc.
In New Tape, Lara Trump Offers Omarosa Manigault Newman "Hush Money"
Before joining the administration, Manigault Newman handled African-American outreach for Trump's presidential campaign. Donald Trump's questionable history with racism just added another chapter. "I'll take anything I can get, gladly".
'No chance' Willian would have stayed at Chelsea under Conte
I am lucky to get the opportunity to play for France and that alone is a huge motivation for me, whenever I go on the pitch. An emboldened N'Golo Kante is confident he can adapt to a more attacking role in Chelsea's transformed playing style.
Video games in China have also been criticized for communicating non-socialist ideals (conflicting with the president's repeated mantra of "socialism with Chinese characteristics"), so the future of video games in China remains uncertain. "I think the monetisation will happen, it is just a matter of time".
The Chinese government has been halting its approvals of new online game licences as Chinese President Xi Jinping pushes a "purification" campaign in media and entertainment, according to reports.
Tencent said customers who purchased Monster Hunter: World were entitled to a full refund until August 20. This is where the authorities have been forced to hold on to the issuing of the gaming licenses in the country.
"The regulatory headwind is definitely having a toll" on Tencent's gaming revenue, said John Choi, an analyst at Daiwa Capital Markets, noting that the company has not been able to monetize a key title such as PUBG. Tencent has lost around $170bn in market value since January of this year.
Tencent still hasn't received full approval to introduce desktop versions for PUBG and "Fortnite".
Analysts had widely expected "Monster Hunter: World" to be one of 2018's biggest hits for Tencent, which licensed the game from Japan's Capcom Co Ltd 9697.T to sell on its WeGame platform. Lau said this showed the regulators' goodwill.