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Misunderstandings: Tencent´s Revenues from Virtual Goods |
On my search for revenue numbers from virtual good sales I stumbled many times across the figures of Tencent. Yesterday for example, I watched the presentation of Susan Wu on the Le Web conference. She mentioned that Tencent has revenues of $1billion and 70% come from sales of virtual goods. I doubt that this figure is true.
Let´s have a closer look.
I think the number is derived from the press releases of Tencent. In 2007, Tencent published that they generated $344.1M revenues from their Internet value added services (that is 65% of their $523.1M total revenues). In the three of four quarter results of 2008 (1st, 2nd and 3rd) Tencent announced that they generated $644.1M revenues from their Internet value added services (68% of their $943.1M total revenues)
The question is: what are these Internet value added services? Tencent aggregates QZone, QQMembership, QQShow, QQMusic and QQLive in their Internet value added services. I doubt that all of these services have revenues from virtual goods. I am also confused that Tencent´s instant messaging services are not included in the Internet value added services. According to Susan Wu the most virtual goods revenues of Tencent come from the instant messaging services.
In my opinion it is unclear how much of Tencent´s revenues are generated from virtual goods. What do you think? Am I missed something here?
Good bye and stay tuned.
I think you are right. I have been looking at the same numbers. What tencent calls IVAS (and which generated $700 mill numbers) actually includes premium membership to tencent services (better IM, larger albums, more storage etc.).
In my opinion it’s a little suspect (though not incorrect) to bucket them under virtual goods. Suspect because by doing this we are calling all payments for online subscriptions which don’t result in physical tangible goods as virtual goods (including premium content subscriptions).
comment by gaurav — May 10, 2009 @ 3:17 am