Tencent’s Co-Founder and CEO Pony Ma raised concerns over the company’s gaming business, acknowledging the formidable competition it faces, as reported by Reuters. However, Ma also revealed that Tencent is making significant advancements in the development of artificial intelligence (AI).

Speaking at Tencent’s annual meeting in Shenzhen on Monday, Ma pointed out that the tech giant was struggling to maintain its gaming dominance, noting that rivals had introduced compelling new titles to the market.

Ma admitted that Tencent’s gaming division, a major contributor to the company’s revenue at over 30%, had encountered substantial challenges in the past year. He emphasized the company’s struggles to keep up with competitors’ ability to continuously deliver innovative products.

These comments undoubtedly reflect concerns about whether Tencent, the world’s largest gaming company and owner of WeChat, can uphold its position as China’s foremost tech company amidst fierce competition and rapidly evolving technologies.

Ma’s remarks arrive in a climate where emerging players like miHoYo and NetEase have surpassed Tencent’s performance with blockbuster gaming titles such as ‘Genshin Impact’ and ‘Eggy Party.’ Meanwhile, Tencent’s recent releases have fallen short of expectations, although previous successes like ‘Honor of Kings’ and ‘PUBG Mobile’ continue to yield robust revenue.

On the AI front, Ma revealed that Tencent is narrowing the gap with its competitors. He expressed confidence that the company is now keeping pace with top-tier firms. While refraining from boasting about leading the AI race, Ma asserted that Tencent is not lagging far behind.

Furthermore, Ma emphasized that Tencent’s focus should be on integrating its AI model, the ‘Hunyuan’ model, into various business operations to enhance efficiency, rather than hastily translating AI into marketable products.

Addressing future prospects, Ma indicated that there will not be a widespread application of AI-native products in the short term, within the next one or two years.

Moreover, Ma highlighted Tencent’s foray into live-streaming e-commerce, aiming to transform WeChat into a platform akin to ByteDance’s Douyin, a short-video service that has been raking in substantial revenue from live-streaming e-commerce.

“WeChat is our most robust platform in terms of daily user volume and ecosystem. But it is 12 years old… The pivotal question for us now is how we can unearth new opportunities from the mature WeChat platform,” added Ma.

Recent developments have been favorable for Tencent and NetEase, among others in the gaming sector, following a surge in their stock prices. This surge was attributed to China’s gaming regulator retracting proposed draft rules aimed at restricting the duration and spending of players on online games. The withdrawal of these rules countered the massive market value loss experienced by the three Chinese companies — NetEase, Bilibili, and Tencent — following the revelation of the draft rules on December 22, 2023.