Asia (bbabo.net), - Chinese gaming giant Tencent's profit fell substantially last year, according to its earnings report released this Wednesday, as China's tech sector hit hard times, France-Presse (AFP) reported today, March 22 ).

The annual net income of the company that owns the popular Chinese messaging app WeChat has fallen 16% year-on-year in 2022.

Tech titans of the world's second-largest economy, such as Tencent and Alibaba, are facing increasing pressure from Chinese authorities from 2020 after several years of skyrocketing growth. Many of them have been investigated for alleged anti-competitive behavior and data security issues, dampening investor enthusiasm, bbabo.net notes.

A report released on Wednesday also showed Tencent's total annual revenue fell to 554.6 billion yuan ($80.5 billion), down one percent from last year.

However, the company's founder and CEO Pony Ma expressed optimism in the earnings report.

“The changes made last year will allow us to capitalize on and facilitate China's economic recovery, which our user activity indicates is now underway,” he said.

These were the first quarterly results released by Tencent since the Chinese government lifted some restrictions in December as part of its Covid-19 zero-tolerance policy, which has hit the domestic economy hard due to massive lockdowns in the world's most populous country.

Tencent, the world's leading provider of video games, is looking to diversify its business operations and ensure its own survival in the era of the pandemic in the face of what it called "transitional industry challenges."

bbabo.Net