Tencent, the Chinese multinational gaming and technology conglomerate has given a clear
indication of expanding its gaming business overseas as the business in the home market has
been slowed down to a sluggish pace under the recent crackdown on video games. Following
Tencent Game Developers Conference, Tencent Holdings discussed the potential of
international expansion for its gaming titles.

The decline in growth of Chinese gaming companies like Tencent is because they have to abide
by a lot of regulations and rules laid down by the Chinese Government. One such rule to
prevent gaming addiction among the Chinese youth. A limit has been placed which has banned
gamers under 18 from playing online for more than three hours a week since last September.
Also, the video game industry needs to fulfill stringent licensing requirements, which makes it
very difficult for a Chinese company to get a license issued for any new gaming title.
In order to attract more foreign speakers to its annual game developers conference, the
Chinese internet giant emphasized the issue of globalization. As per reports by South China
Morning Post, one executive during this conference claims that the markets for Tencent Games
in the Middle East, Latin America, and Southeast Asia have been expanding the fastest.

As of the first half of 2021, the domestic revenue for the gaming giant was less than 8.3 percent,
accounting for a 4.25 percent decrease compared to the previous year’s revenue. According to
a report by the Game Publishing Committee of the China Audio-Video and Digital Publishing
Association, the number of gamers in China dipped to 665.69 million at the end of June from
666.57 million in December, and the aggregate revenue in China's video game sector was
reduced to 1.8%.

The mobile games by Tencent including Player Unknown's Battlegrounds, Call of Duty Mobile,
and Honor of Kings have been performing very well in foreign regions like Latin America and
South-East Asia. Tencent’s revenue in the first quarter of 2022 went up by 4 percent, even
though the domestic market’s revenue was crippled by its contribution of 1 percent.

“Garena Free Fire quickly seized the market…and performed well in Latin America, South-East
Asia, India, and North America”, said Yang, operation lead of Call of Duty Mobile. Similarly, the
popular game, PUBG Mobile has been doing great business globally with 15 million daily active
users abroad.