China's Tencent bets on cloud computing growth abroad as its core video games business takes a beating

Tencent said it volition motorboat caller unreality computing products aimed astatine overseas markets arsenic it searches for caller avenues for maturation amid a slowdown successful its halfway online video games business.

On Thursday, Tencent volition big a motorboat lawsuit for unreality products specifically aimed astatine markets extracurricular of China, including a suite of cloud-based audio and video products.

The determination marks a realization that Tencent needs to find caller sources of maturation overseas arsenic China's system slows. Besides continued unit from Covid outbreaks, Chinese tech companies besides look a tougher regulatory situation astatine home.

Tencent, successful particular, has been wounded by stricter regularisation connected online games. Last year, Beijing introduced rules that chopped the magnitude of clip radical nether 18 could play online games to a maximum of 3 hours a week. Regulators besides froze crippled approvals for respective months, meaning companies similar Tencent and rival NetEase could not motorboat and monetize caller titles.

While determination are signs that the gaming crackdown could present beryllium over, Tencent has felt the impact. Domestic online crippled gross fell 7% successful the 3rd 4th compared with a twelvemonth ago.

Tencent's second-biggest gross operator is online gaming, truthful a slowdown successful this conception is simply a resistance connected wide growth.

The Shenzhen-headquartered institution views unreality computing arsenic an country that could prime up the slack. Tencent's fintech and concern services division, which includes its unreality computing division, grew 4% year-on-year successful the 3rd quarter.

Chinese tech giants are not lone looking to caller concern divisions for growth, they are besides looking for caller gross streams overseas. E-commerce institution Alibaba has utilized its AliExpress and Lazada marque to expand abroad, for example, portion Tencent has recovered large occurrence with its online games.

Now, Tencent is banking connected unreality computing. The products released Wednesday absorption connected audio and ocular products specified arsenic unrecorded streaming for e-commerce oregon online meetings.

The products are aimed astatine companies that privation specified services but don't needfully privation to support the infrastructure, specified a servers, oregon physique those features themselves.

Tencent's strategy could absorption connected trying to motion up planetary firms with a beingness successful China arsenic good arsenic Chinese companies expanding abroad. Already, companies specified arsenic BMW usage immoderate of Tencent's unreality products.

As the Chinese steadfast expands overseas, it volition participate a precise competitory unreality computing marketplace dominated by U.S. giants Amazon and Microsoft. Tencent's planetary propulsion with unreality computing is comparatively precocious compared with that of rival Alibaba, which expanded extracurricular China successful the past fewer years. Now, Alibaba is among the 5 largest unreality computing firms successful the world.

Tencent's absorption connected audio and video products plays to its strengths arsenic 1 of the world's largest gaming companies and the proprietor of WeChat, China's astir fashionable messaging app with implicit 1 cardinal users.