Drop in annual revenue for Tencent as China crackdown affects the company's performance.

Tencent has announced a decrease in yearly earnings for the first instance, primarily because of the impact of China's economic recession brought upon by the pandemic and prolonged regulatory scrutiny.

The biggest gaming company on the planet, which also runs the WeChat messaging service, reported a revenue of ¥554.55 billion (equivalent to US$81 billion) for 2022, indicating a 1% drop compared to the previous year.

According to Refinitiv, the anticipated number from analysts was 555.15 billion yuan on average.

In the last quarter ending in December, the company's income increased by 1% compared to the same time the previous year and totaled 144.95 billion yuan. This exceeded the expected revenue of around 144 billion yuan as predicted by the majority.

Tencent's earnings that can be attributed to shareholders dropped by 16% to 188.24 billion yuan for the year, which was different from the expected estimate of 114.19 billion yuan.

The findings were released during a time of uncertain predictions for the biggest gaming industry in the world, following two years of strict supervision. However, businesses in the industry are tentatively positive about a potential comeback, as officials have started permitting publishing licenses once again - this decision was made in the latter part of last year, following several months of prohibition.

In contrast to many other nations, video games mandate authorization from governing agencies prior to distribution in China.

In the fourth quarter, Tencent experienced a 6 per cent decline in their gaming earnings in China, which amounted to 27.9 billion yuan. Nonetheless, their gaming revenue outside of China rose by 5 per cent, bringing in a total of 13.9 billion yuan.

Tencent experienced a growth of 15 percent in revenue from online ads, amounting to 24.7 billion yuan due to an increase in brand spending during the midst of an economic recovery.

Despite Tencent's efforts to grow its presence in fintech and business services, revenue from these sectors decreased by 1% in the quarter, amounting to 47.2 billion yuan.