Tencent Holdings and Sea are signaling that the $200 billion gaming industry, which in 2022 endured one of its worst slumps on record, is in for an even rockier year. Picture: BLOOMBERG
Ma’s outburst in particular unnerved observers accustomed to his even-keeled handling of Asia’s biggest social media and gaming company. Along with the Sea decision — unveiled in a memo days before Christmas — they point to another down year for a games industry struggling to leave behind the geopolitical and economic ructions of 2022. The war in Ukraine, soaring inflation and resultant effect on consumer spending could usher in an even tougher 2023 environment, Li warned in his memo.
on mobile, but they have not escaped the sting of this year’s slowdown, with Sea shares down more than 70% and Tencent hitting its first zero-growth quarter. Singapore-based Sea has cut 7,000 jobs in 2022, or 10% of its workforce, in a move to control costs. Li assured his charges that Sea “will be starting 2023 on a stable footing” and that most of the big changes it needs to make have already been made.
The chairman of the Shenzhen-based firm was unsparing in his criticism of business units from gaming to social and cloud computing. He cautioned that some divisions might not survive much longer without righting their current trajectory. Tencent has cut jobs by the thousand this year, streamlined unprofitable businesses and lowered investments including in Sea.
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