Sports Business: Tencent banking on Gaming business to reduce COVID-19 impact

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As the sports world is reeling under the economic impact of Coronavirus pandemic, Chinese multinational conglomerate Tencent is optimistic that forced confinement of people globally will help the world’s largest video gaming company make up for the other deficit due to rapid COVID-19 outbreak.

Market analysts are also opining that the Tencent Gaming Unit, among the largest in the world, holds the potential to offset the losses due to the Coronavirus impact on the company’s other business.

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The company has also agreed that as the COVID-19 outbreak is forcing millions of people to stay indoors, its online gaming and digital services are already seeing a rise in engagement.

“Our users spent more time online entertainment, including video and games, during the coronavirus outbreak. But we shifted more resources and people to public service sectors, such as online heath care online education during the pandemic,” Tencent’s president Martin Lau had reportedly told investors during their earnings call.

Tencent, with other business interests owns Riot Games and other diverse gaming properties, while declaring a $54 billion revenue during the 2019 fiscal, a 21% year on year increase, has put on record that the Gaming unit will be able to mitigate the Coronavirus’ adverse impact on the other business.

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Revenues from value-added services, including games, video subscriptions, and music streaming, were 52.3 billion yuan ($7.4 billion) in the current quarter, up 20% year on year, or nearly half of the company’s total revenues, the company has revealed.

Leading sports entities worldwide are turning to e-gaming to mitigate the impact of the postponement and cancellation of events the world over. FIFA, Nascar and Formula 1 have all started implementing their e-game plans as their real events have come to a screeching halt due to the COVID-19.

First seven races of the new F1 season have so far become the victim of Coronavirus, which worldwide had impacted nearly 2.70 lakh people and killed more than 11,000 humans.

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