Tencent profit soars, but China watchdogs lurk

It's a social media giant and the world's biggest gaming firm by revenue.

And right now that's paying off for Tencent.

On Thursday (May 20) the Chinese firm said quarterly profits jumped 65% to just over $7.4 billion.

That beat forecasts, driven by a surge in demand for its games at home and abroad.

But there's a chill in the air for China's online firms.

Regulators have already fined e-commerce titan Alibaba $2.75 billion as part of a sweeping anti-trust clampdown.

Last month Reuters reported that Tencent also faces a penalty.

Regulators have told it to pay a massive fine, and shed some music assets.

Earlier this week its audio streaming unit, Tencent Music, said it faced heightened scrutiny from watchdogs.

Tencent, which makes 32% of its revenue from games, also faces mounting competition.

TikTok-owner ByteDance and other rivals are making inroads into the market, buying up some game studios.

Tencent is getting busy in response.

At its annual video games conference last week the company unveiled more than 60 new titles.

Later this year it will also launch a Pokemon game in partnership with Japan's Nintendo.

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