Jonathan Lai, Tencent’s executive, has reportedly resigned from the company to move to Coatue Management, according to a Wall Street Journal report. He will assume a similar director role at the New York-based firm.
Lai and his team have been responsible for Tencent’s investments in digital entertainment startups in the US and Europe. The investments include the likes of game chat service Discord, and Epic Games – the developer of the video game Fortnite.
Lai’s departure follows a weakening performance of Tencent, a Chinese tech conglomerate. Specifically, the company posted a 19% drop in online games revenue from its previous quarter to RMB 17.6 billion (US$2.6 billion). Tencent’s net income also fell by 2% year-on-year to RMB 17.9 billion.
Tencent, one of the biggest beneficiaries of China’s booming gaming industry, is now struggling amidst tightened government controls over the sector. The Chinese government has not given any gaming license since March this year.
As a matter of fact, China’s gaming revenue has been slowing down and is reportedly facing the slowest growth trajectory over the past decade. Mobile gaming which makes up for half of the gaming sector’s total revenue saw its year-on-year growth plunge from 50% to a mere 13% during the first half of this year.
- Lai’s departure to work for a US-based hedge fund in a similar capacity could be a signal for a dim prospect for a gaming industry under stringent regulations.
- Tencent is losing a talent who has led Tencent on many major investments into overseas gaming startups and this occurs at a time when the company is already struggling to meet investors’ targets.
- The gaming blow might grow to become more overwhelming as Tencent is also facing increasing competition in its social media business with the likes of Douyin.
Editor: Ben Jiang