Tencent shares surge thanks to blockbuster game’s early debut

Tencent Holdings Ltd., the company behind popular games like PUBG and Arena of Valor, saw a surge in its stocks, the biggest one since February.

As per the latest report by Bloomberg, this surge is due to an earlier-than-expected launch of a highly anticipated mobile game. The Chinese tech giant is hoping that this release will help revive its gaming business after a period of regulatory scrutiny.

The game in question is Dungeon & Fighter Mobile (a.k.a DnF), which has been developed by Nexon Co. The title is scheduled for a May 21 release in China. The release coincides with a potential easing of regulations in China's massive gaming market.

Following the news, Nexon's stock also jumped significantly, which is indicative of investor confidence in the game's success. Tencent's share price rose over 5%, leading the pack of Chinese tech companies in Hong Kong.

Jefferies analyst Thomas Chong noted that they are expecting the gaming revenue to turn around in 2Q24. He predicts that the game may generate 6 billion yuan ($828 million) of revenue annually. He also notes that apart from DnF, Tencent has a number of emerging franchises to drive future growth.

Tencent executives are counting on DnF Mobile to reignite sales momentum after a disappointing first quarter. The company is eager to move past a soft launch for its new casual title, Dream Star, which struggled against fierce competition from NetEase Inc.’s Eggy Party.