Tencent Music, a company that develops music streaming services for the Chinese market, has reported satisfactory Q3 results despite the setbacks caused by the country’s crackdown on online gambling and certain gambling-like gamified features.
As reported by Reuters, the music streaming company surpassed its initial quarterly estimates thanks to the noticeable increase in paid subscriptions. For reference, the company’s Wall Street estimates expected it to post revenue of 6.31 billion yuan for the quarter.
Instead, the company wrapped up the three months ended September 30 with revenue of 6.57 billion yuan (roughly $901 million). Despite this, the quarterly results still represent a decline of 10% year-on-year.
The revenue decline was attributed to the company’s social entertainment performance which plummeted because of China’s strict new regulations on gambling and gambling-like products.
Tencent Music Will Focus on Stabilizing Its Business in 2024
The Tencent subsidiary has never offered gambling in the true sense of the word. However, Beijing’s latest activity also saw it tackle live streaming platforms’ gamified features, including lucky draws, alleging that they can be used for gambling purposes.
Tencent Music complied with the new regulations and took these features down, causing its social entertainment services’ revenue to plummet by 48.8%. The dramatic decline was caused by the company’s adjustments to the new rules and follows an earlier quarterly decline of 24%.
Despite the difficulties caused by China’s strict anti-gambling policies, Tencent Music believes that it will be able to get the situation under control. According to Cussion Pang, Tencent Music’s executive chair, the company’s goal for 2024 would be to stabilize its business and serve its loyal customers in other ways.
Pang added that the anti-gambling measures should be a temporary setback as the company expects its social entertainment segment to continue generating a healthy cash flow for the company.
DouYu May Also Face Problems
Speaking of China’s crackdown on gambling, Chen Shaojie, the chairman of the live-streaming platform, DouYu, is reportedly under investigation over gambling and pornography-related content on the platform.
Reports say that Shaojie is absent without official leave, prompting speculations that he may have been arrested. However, his arrest is yet to be officially confirmed.
DouYu, for reference, is another Tencent Holdings-backed platform.