Tencent announces restructuring in the wake of challenges

Chinese giant Tencent Holdings announced plans for internal restructuring after facing a challenging year due to government regulations in China, its main market.

2018 has been a rollercoaster for Tencent, the company’s market value hit a peak of $578 billion (£440 billion) back in January. Nine months later, Tencent is reporting its first quarterly profit fall in almost 13 years after losing $160 billion (£124 billion) in market value.

The company received criticism from investors because of the overseas strategies and growing debt. On top of it all, the Chinese government introduced new regulations that kept the company from monetising its biggest title, PlayerUnknown’s Battlegrounds Mobile.

In order to stop the bleeding, the company is changing its internal structure for the first time in six years. According to the announcement, the company is grouping three content business groups into one and creating one group to be in charge of cloud and smart industries.

After the changes, Tencent is hoping to improve the cloud-data for corporate clients and increase its content offering capabilities. Tencent is better known for its gaming branch but the company also runs WeChat, China’s biggest social network with over one billion users.

Regarding the company’s plan, the statement said: “[Tencent will] further explore the integration of social, content and technology that is more suitable for future trends, and promote the upgrade from consumer internet to industrial internet.”

Tencent went public successfully in 2004, the future for the internet giant was bright but now it is in question.

Esports Insider says: Tencent keeps investing resources into gaming without getting anything in return. PUBG is not only a non-monetised game, but it must also compete with Fortnite and other battle royale games. The company is hoping for a change in the Chinese regulations, in the meanwhile it must change if it wants to close the year with positive numbers.

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