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Tencent cuts marketing budget from its gaming division as market regulation continues

Tencent slashes marketing budget for gaming division

Tencent will cut the marketing budget of its gaming division as the business continues to suffer under Government regulation changes.

Tencent executives have been ordered to control their cash flow and curtail spending to “endure the hard times together”, according to reports by Bloomberg.

Tencent is halving the branding budgets for mature games and as well as cutting spend to games not coming out until 2019 as well as for underperforming games. Tencent also wants games that are yet to receive government licenses to return their unspent marketing budget to the group.

China’s $30 billion gaming industry has been under pressure this year after government regulators froze the approval process for new games. High-profile games, such as Fortnite, suffered severe delays due to the rules.

The regulatory changes have had a significant impact on Tencent, which reported its first profit decline in a decade and has lost more than $200bn in market value since the start of the year.

Tencent is currently restructuring its business as a result of the market pressures. The restructure is the company’s first in six years.

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