Tencent's old and new games both grow, and AI is accelerating its integration into WeChat | Earnings season

Text by | Wang Yuchan

Edited by | Qiao Qian

In Q3 of 2025, Tencent maintained its consistent steady performance. Total revenue increased by 15% year - on - year, gross profit rose by 22% year - on - year, and operating profit under non - IFRS increased by 18% year - on - year.

During this quarter, all three major business segments achieved double - digit growth: the value - added services business increased by 16% year - on - year to RMB 95.9 billion; the marketing services business increased by 21% year - on - year to RMB 36.2 billion; and the financial technology and business services increased by 10% year - on - year to RMB 58.2 billion.

Tencent's game revenue achieved a high growth rate of 23%. Among them, the domestic market increased by 15% year - on - year, and the international market increased by 43% year - on - year.

The domestic market mainly benefited from the release of several games such as Delta Force recently, the continuous growth of ever - green games like Honor of Kings and Peacekeeper Elite, and the expansion of Valorant from the PC to the mobile platform. The international market mainly benefited from the revenue growth of games under Supercell, the newly released PC and console game Dying Light: Bad Blood, and the revenue of recently acquired game studios.

The growth of video account live - streaming service revenue and mini - game platform service fees this quarter also contributed to a 5% increase in Tencent's social network revenue. At the same time, businesses such as video accounts, search services, and mini - programs also accelerated Tencent's advertising revenue growth. The 21% growth rate was a new high in the past six quarters. However, it should be noted that Tencent also increased the ad load rate this quarter.

Previously, Tencent's ad load rate had always been kept at a low level, and senior executives had repeatedly stated that they were not in a hurry to increase this figure. It is reasonable to assume that the increase in the ad load rate this quarter is related to the food delivery war.

The growth of the financial technology and business services business reflects the recovery of commercial payments and the impact of consumer loans. The revenue of enterprise services increased by more than ten percentage points year - on - year, demonstrating the progress of two important Tencent businesses: the increase in the transaction volume of WeChat stores drove up service fees; and the rising demand of enterprise customers for AI services led to the growth of cloud service revenue.

Games: Promote Delta Force to Become a New Gem

In the game field, Delta Force has ranked among the top three in the total game revenue in China. This game, which was launched in September last year, is still in the stage of revenue growth. During a conference call, an analyst asked Tencent if it had plans to promote the game to the top position. Michelle replied that "our core strategy is 'platformization'."

Regarding "platformization", Ma Xiaoyi, the senior vice - president in charge of Tencent's game business, has repeatedly stated that "good games are platforms. Many ever - green games are no longer just games but have become game platforms." Previously, Tencent had promoted Peacekeeper Elite and CrossFire to become platforms. For example, various shooting gameplay modes were designed in one game to make it a "shooting game platform". Next, Delta Force will also follow this path.

Michelle said, "From the very beginning of its design, Delta Force adopted a modular architecture, laying the foundation for platform - based operation. Through platformization, Tencent can introduce more new models. One of the key directions is user - generated content (UGC) - this model has achieved great success in Peacekeeper Elite and PUBG Mobile, and we will gradually cultivate it in Delta Force in the future."

In addition, Tencent will continue to increase PVE (Player vs. Environment) content and strengthen the live - streaming ecosystem. "We will fully apply the valuable experience Tencent has accumulated over the past 17 years in successfully operating more than 40 shooting games in the Chinese market to Delta Force," Michelle said.

At Tencent's annual meeting in early 2024, Ren Yuxin, the president of Tencent Interactive Entertainment Group, said, "Competitive battle games are the gems on the crown of Tencent's games. We must hold on to our basic market and not be shaken by some popular MMO and anime - style games at present."

Now, Tencent is promoting Delta Force to become a new gem. Michelle reiterated in the conference call that shooting games are the largest game category globally, but not in China yet. Tencent's current goal is to promote this category to its due leading position in the Chinese market through a series of products such as Delta Force, Valorant, and Peacekeeper Elite.

Another new game released this year, Valorant: First Strike, also performed well. Tencent's financial report cited reports from QuestMobile and Sensor Tower, showing that based on the statistics of the daily active accounts and revenue in the first month of games released from January 1 to November 12, 2025, Valorant: First Strike was "the most successful new mobile game released in the Chinese market this year".

The total revenue of the old game Honor of Kings also continued to grow year - on - year. This game celebrated its tenth anniversary in October this year, and it achieved 13.9 million daily active users during the tenth - anniversary event.

Regarding international games, Michelle said that the growth rate of the international game business this quarter was "far higher than the potential trend line", mainly benefiting from the consolidation of newly or recently acquired game studios and the recognition of the pre - sales revenue of the game Dying Light: Bad Blood.

"Therefore, the growth rate of the international game division and sub - divisions will slow down in the fourth quarter and be closer to the potential trend line," Michelle said. Tencent will continue to seek to acquire game studios, continue to cooperate with overseas game studios, and also continue to seek to bring more China - made games to a global audience.

It is also worth mentioning that shortly before the release of the financial report, Bloomberg reported that Tencent had reached an agreement with Apple. Apple will handle payments for WeChat mini - games and applications and take a 15% commission, lower than the standard 30% in general cases.

During the conference call, analysts also asked about this issue. Tencent's senior executives responded that they were "very excited about the current progress" and also stated that at present, the vast majority of the revenue from mini - program games comes from in - app purchases (IAP) rather than in - app advertising (IAA). "Therefore, theoretically, if the cooperation is reached, we will benefit from it."

AI: WeChat Will Eventually Launch an AI Agent

This quarter, the contribution of AI to Tencent's revenue was mainly reflected in advertising and enterprise service revenue.

The 21% revenue growth in the advertising business was not only due to the increase in the ad load rate but also because of the growth of eCPM driven by AI - powered ad targeting. The financial report stated that the advertising investment of advertisers in all major industries increased this quarter.

Michelle said in the conference call, "Tencent has launched the automatic advertising campaign solution AIMarketingPlus. Advertisers can use it to automate targeting, bidding, and ad placement, as well as optimize ad creativity, thereby improving their marketing return on investment."

In terms of enterprise service revenue, the rising demand of enterprise customers for AI services drove the growth of cloud service revenue, which, together with the transaction service fees of WeChat stores, pushed up this revenue by more than ten percentage points.

Tencent is still investing in promoting the popularity of Yuanbao and its development within WeChat. In Q3, the download volume of Yuanbao increased compared with Q2. In April this year, Tencent integrated Yuanbao into the WeChat ecosystem. WeChat users can add Yuanbao to their contacts and have real - time conversations with it in the chat dialog box.

Ma Huateng, Tencent's CEO, said in the Q3 conference call that now, Yuanbao can summarize content in the comment boxes of WeChat video accounts and official accounts and encourage users to ask follow - up questions. "Users really like this function." In addition, Tencent has also enriched the content generated by Yuanbao in the Tencent News feed of WeChat and promoted users' exploration of news - related topics through the Yuanbao application.

In Enterprise WeChat, Tencent has also launched an AI summarization function, which can generate project reviews and provide suggestions based on users' emails and conversations. It can be seen that Tencent is accelerating the integration of AI capabilities with its social software.

President Liu Chiping told analysts that he believes the ideal scenario is that "WeChat will eventually launch an AI agent."

"WeChat's ecosystem has a communication and social ecosystem that enables the agent to understand users' needs, intentions, and interests; a content ecosystem, including official accounts and video accounts; a mini - program ecosystem, which basically covers most use cases on the Internet; a business ecosystem that allows people to buy goods, and a payment ecosystem that allows people to complete payments almost immediately. So, it is almost an ideal assistant for users, understanding their needs and being able to perform all tasks within this ecosystem. This is the ideal scenario," Liu Chiping said.

When asked about capital expenditure, Liu Chiping replied, "Currently, we have enough GPUs. In fact, the GPUs we have are sufficient for our internal use." Liu Chiping emphasized that Tencent's investment in AI has already seen returns in terms of revenue and gross profit.

In the fourth quarter of last year, due to the "arms race" in the AI business, Tencent's capital expenditure was the highest among all Chinese technology companies. In 2024, Tencent's total capital expenditure increased by 221% year - on - year, accounting for about 12% of the previous revenue. However, in the third quarter of this year, capital expenditure has slowed down significantly, decreasing by 24% year - on - year and more than 32% quarter - on - quarter.

During the conference call, James Michelle, Tencent's chief strategy officer, said that throughout 2025, Tencent's capital expenditure is expected to be lower than the previous guidance range but still higher than that in 2024.