Tencent’s Platform and Content Group Achieved Profitability at End of 2022

All businesses under Tencent‘s Platform and Content Group (PCG) were profitable at the end of 2022, allowing the group to increase its annual profit by several billion yuan, LatePost reported on January 10. The Shenzhen-based tech giant’s PCG was established in 2018, covering a wide range of products, including QQ, Tencent Video, Tencent News, app store Yingyongbao, Sogou Input Methods, and more.

Specifically, Tencent Video’s annual revenue in 2022 exceeded 10 billion yuan ($1.48 billion), and it began to record profits in October. Tencent News also made profits in the final quarter of 2022. QQ Browser achieved annual profits by greatly reducing promotional costs. In addition, Tencent‘s short video platform Wesee stopped losing money after significantly shrinking its team and business.

However, profitability is now the key indicator to determine whether a business unit will continue. A couple weeks ago, firm CEO Pony Ma severely criticized various departments at an annual company-wide meeting. Ma cited Tencent News as an example, saying, “If profitability is not good, it should still be cut.” Tencent News is an information provider with a history of 20 years under the PCG, and it has lost money for many years.

In February 2022, Tencent made an inventory and classification of all loss-making products, and found that more than 50 products across the whole company were in a loss state. At that time, as one of the business groups with large personnel under Tencent, PCG’s Tencent Video, Tencent News, QQ Browser, Wesee were not profitable. The number of daily active users of Tencent News dropped to about 40 million, while the number of paid members of Tencent Video dropped to 120 million in the third quarter of 2022.

Last year, PCG carried out cost reductions and efficiency increases, leading to the number of employees dropping to less than 10,000. Meanwhile, the size and budget of each business are greatly reduced, and the costs of core platform construction and technology development have declined.

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A source said that Mark Ren has two key tasks after becoming the head of PCG. One is to integrate Tencent‘s content business, including novels, animation, film and television, platforms, and games. The other is to ensure that the technical transformation of PCG will achieve results.

Ren used Tencent Video and Tencent News as examples at the PCG year-end conference, saying that the road of accelerating through resources in the past has proved to be unfeasible. “Only by producing content honestly can we attract users. It is possible to survive by doing every link well,” Ren added.