Tencent's Retro Roots Juice Its Pandemic Profits

For all the fame and attention Tencent Holdings Ltd. receives because of its ubiquitous WeChat messaging app — which has 1.2 billion users and counting — the Chinese internet giant’s old-school roots as a games company are what pulled it through the darkest days of the pandemic.

A 40% increase in online games revenue, including a 62% jump in the smartphone subcategory, helped quarterly sales beat estimates by the most in four years, according to results reported by Tencent on Wednesday. Advertising, on the other hand, was lackluster. Media advertising — placed on its content platforms — remained particularly weak, posting a fifth straight decline.