Video games and social media sound more glamorous than cloud computing. Yet the latter saved Tencent from a first-quarter results shock. Sales by its fintech and business services division, which houses its cloud computing, WeChat Pay and wealth management units, grew 44 per cent, offsetting weakness from games. The division suddenly accounts for more than a quarter of revenue. 

Tencent needs the boost. Gross margins continued a multiyear decline to 47 per cent. First-quarter sales growth was the lowest on record. A 17 per cent rise in net income came largely from a one-off gain on the adjusted valuations of Tencent’s start-up holdings, rather than core earnings. 

Government regulations have limited new game licence approvals, curbing games sales. An economic slowdown, which has cut into Chinese companies’ profits, has also hit advertising. Tencent blamed a fiercely competitive environment for less video advertising. That was a coded reference to ByteDance, which owns the short video app TikTok, which has eaten into Tencent's market share.