Core Points - Riot Games, the developer of "League of Legends," announced layoffs of 530 employees, representing 11% of its workforce, as part of a strategy to create focus and ensure a sustainable future [2][3] - The company acknowledged that it had expanded its investments too broadly and needed to refocus on its core gaming operations [2] - The layoffs are part of a broader trend in the tech industry, which has seen significant job cuts in recent months across various companies [3] Company Strategy - The layoffs are intended to streamline operations and enhance focus on game development, as the company admitted to lacking a sharp focus and having too many ongoing projects [2] - Riot Games plans to make changes to its "Legends of Runeterra" game to ensure sustainability and will reduce the team working on it, while also discontinuing "Riot Forge" after the release of "Bandle Tale" [4] Employee Support - The company will provide laid-off employees with a minimum of six months' salary, cash bonuses, and additional benefits, including job placement services and counseling [3] - Employees on work visas will receive visa support, and those laid off can request a laptop if needed [3]

Ma ''Pony'' Huateng, chairman and chief executive officer of Tencent Holdings Ltd., speaks during the Guangdong-Hong Kong-Macao Greater Bay Area Forum in Hong Kong, China, on Tuesday, June 20, 2017. In an unusual move, Ma has chosen to convene a summit of government academics and business chieftains in Hong Kong days before the 20th anniversary of its return to China.Tencent's Riot Games unit said Monday it's eliminating 11% of its workforce, or about 530 jobs, and scaling back on its division that publishe ...

Videogame maker Riot Games on Monday said it would lay off around 530 employees globally, or around 11% of its total staff, as it tries to narrow its focus after making what executives said were several years of “big bets” and expansion. In a letter to employees, the company — owned by Chinese tech giant Tencent Holdings 700, -3.32% and known for “League of Legends” — also said it was “sunsetting” its Riot Forge publishing unit and would cut the size of its “Legends of Runeterra” team.The layoffs will occur ...

Fool.com contributor Parkev Tatevosian has selected this stock because it makes an excellent match for growth stock investors. *Stock prices used were the afternoon prices of Jan. 17, 2024. The video was published on Jan. 19, 2024. ...

Core Viewpoint - Tencent's stock rose by 3.1% following Beijing's supportive measures for the gaming industry, indicating a potential easing of regulations after a three-year crackdown [1][2]. Group 1: Regulatory Changes - Beijing has removed Feng Shixin, the official responsible for regulating the video game sector, which may signal a shift towards encouraging growth in the gaming industry [2]. - Previous proposals to restrict spending on video games had negatively impacted Chinese gaming stocks, but the recent developments suggest a reversal of this trend [1][2]. Group 2: Company Performance - Tencent's revenue growth has started to recover, with a reported increase of 10% to $21.5 billion [3]. - The company has a diversified revenue model, generating income from various sectors including financial services (WeChat Pay) and e-commerce, in addition to gaming [3]. Group 3: Industry Outlook - Gaming remains a crucial part of Tencent's business, and a more lenient regulatory environment from Beijing is expected to benefit the company's gaming operations [4]. - Investors are advised to monitor future regulatory developments closely, as they could significantly impact the gaming sector [4].

It has been increasingly difficult for investors to find bargains in the stock market as major indexes trade at or near their all-time highs.But for those willing to do their homework, there are still deals to be had. One such company is Tencent Holdings Limited (TCEHY -0.40%), which offers investors both an attractive price and compelling long-term outlook. Tencent is an incredible cash-generation machineTencent is an example of what most investors are looking for. Since going public in 2004, it has been p ...

Group 1: Market Context - Chinese investors face challenges from geopolitical tensions, regulatory crackdowns, and COVID lockdowns, leading to low valuations for high-quality Chinese stocks compared to U.S. tech stocks [1] - Tencent's stock has significantly declined due to government regulations affecting big tech and gaming companies, with a recent drop of 10% following new gaming regulations [1][6] Group 2: New Regulations - Chinese authorities announced new rules for video game play, banning digital rewards for certain behaviors and prohibiting auctioning digital items and "lucky draw" features for minors [2][3] - The new regulations were unexpected, as investors believed that video game regulations had concluded after previous restrictions in 2021 [3] Group 3: Long-term Outlook - The new rules may address addictive behaviors and low-quality revenue, indicating a potential positive long-term impact on the gaming industry [4] - Chinese regulators approved 145 new games recently, suggesting a willingness to support the industry despite new restrictions [4][5] Group 4: Tencent's Resilience - Tencent's domestic gaming revenue was 32.7 billion yuan ($4.58 billion), accounting for only 21% of overall revenue, indicating a balanced business model [6][7] - Despite regulatory impacts, Tencent's domestic games revenue fell only 7% in Q3 2022 and has since bounced back to 5% growth [7] Group 5: Valuation and Investment Opportunity - Tencent's stock trades at approximately 13.4 times earnings, with a significant investment portfolio valued at over $113 billion, making it appear undervalued [8][9] - Stripping out investments, Tencent trades at around 8.5 times earnings, suggesting a strong investment opportunity amidst the fear-driven sell-off [9]

Core Viewpoint - Tencent's shares fell by 10.3% following the announcement of new proposed regulations by Chinese authorities aimed at limiting excessive online gaming and spending [1][2]. Group 1: Proposed Regulations - The National Press and Publication Administration of China has released a draft document seeking public comment on new restrictions for online gaming companies, including a ban on daily login rewards and lower recharging limits [2]. - The proposed regulations also include warnings for users displaying "irrational consumption behavior" and a requirement for game developers to avoid offering high-value or expensive virtual transactions [2]. Group 2: Impact on Tencent - Tencent has significant exposure to the gaming sector, with approximately 21% of its total revenue last quarter derived from domestic games, and around 9% from games outside of China [2]. - Despite the proposed regulations, Tencent's VP of Games, Vigo Zhang, stated that the new measures will not fundamentally alter the online gaming business model and operations, suggesting that the company believes it can adapt [3]. - The market reaction has been negative, with a notable decline in Tencent's stock price as investors react to the uncertainty surrounding the new rules [1][3]. Group 3: Future Outlook - The proposed rules are not finalized, and industry observers expect further clarification from Chinese authorities in the coming weeks, leaving the actual impact on Tencent's gaming business uncertain [3].

Core Viewpoint - Tencent's stock experienced a significant decline following the announcement of new regulations on online gaming by the Chinese government, which may impact its growth potential, particularly in the gaming segment that constitutes 21% of total revenues [8][10]. Financial Performance - In Q3 2023, Tencent reported a 10% year-over-year growth in total revenue, reaching 154.6 billion RMB, with online advertising growing by 20% and gross profits increasing by 23% [3][4]. - Operating profits surged by 36% year-over-year, reflecting a focus on operational efficiencies [3][4]. - The company ended the quarter with a solid balance sheet, including a net cash position of 36.4 million RMB and an investment portfolio valued at 113 billion USD [4][6]. Share Repurchase and Management Strategy - Tencent repurchased approximately 48 million shares for 14 billion RMB in the quarter, indicating a commitment to enhancing shareholder value [6]. - Management emphasized a strategy focused on "greater operating leverage" and high-quality revenue growth, while also exiting non-core businesses and reducing excessive operational spending [6]. Market Valuation - Following the recent stock decline, Tencent's valuation appears reasonable, trading at around 16 times this year's earnings estimates, although it is not as cheap as some peers like Alibaba [2][16]. - The potential for operating margin expansion is significant, with adjusted EBITDA margins currently at 34% [16][17]. Long-term Growth Potential - Despite the regulatory challenges in the gaming sector, Tencent's diverse portfolio, including Weixin (WeChat), is viewed as a key asset with substantial under-monetized advertising growth potential [12][17]. - The company is investing in expanding its gaming offerings, particularly in casual and competitive multiplayer games, which may help sustain long-term growth [9][10].

Core Viewpoint - The recent draft guidelines from the Beijing government aim to limit incentives that lead to excessive gaming and spending, resulting in significant stock declines for Tencent and NetEase [1][2]. Group 1: Market Reaction - Tencent's shares fell by up to 15.7%, reaching HK$263.60 ($33.74), before slightly recovering to a decline of approximately 12.7% at HK$274 ($35.07), marking its lowest level since late November 2023 [2]. - NetEase's stock experienced a sharper decline of 20% following the announcement of the new regulations [2]. Group 2: Regulatory Context - The National Press and Publication Administration's draft guidelines prohibit online game operators from using inducive rewards, which are believed to encourage consumers to spend more time and money on games [1]. - This regulatory move is part of a broader trend of ongoing measures targeting online gaming in China, reflecting authorities' concerns about video game addiction among youth [1].