A penguin messenger that lost money for three years grew into gaming's biggest investor
Tencent began in 1998 with a chat program so close to an American rival that its name had to change. It lost money for its first three years. Two decades later the Shenzhen firm counts as the largest company in video games, owning League of Legends outright and holding stakes stretching from Fortnite to Tesla.
Pony Ma and four co-founders set up the company in November 1998, backed by venture capital. Its name comes from the Chinese Tengxun, which borrows part of Ma's own name and loosely means galloping fast information. In February 1999 it released a messenger called OICQ, then renamed it QQ, reportedly after ICQ and its owner AOL threatened to sue. The South African media group Naspers bought 46.5 percent of the business in 2001, a bet that paid off handsomely, and shares went on sale in Hong Kong on 16 June 2004.
Money came first from advertising and from QQ users paying monthly for extras. By 2005 it also charged for mobile features and licensed its cartoon penguin mascot for snacks and clothing, and by 2008 selling virtual goods was driving profit growth. On 21 January 2011 it launched Weixin, known abroad as WeChat, which grew into a so-called super app with over a billion monthly users.
Games transformed its scale. Tencent offered online play from 2004 and around 2007 began licensing titles, including South Korean hits such as Crossfire, before making its own. In February 2011 it took 92.78 percent of Riot Games, maker of League of Legends, for about 230 million US dollars, and bought the remainder in December 2015. A minority stake in Epic Games followed in June 2012.
The shopping spree ranged widely: a 17.43 percent stake in JD.com in 2014, a 700 million dollar deal in 2015 to stream NBA games in China, and in March 2017 a 5 percent slice of Tesla for 1.78 billion dollars. That May it overtook Wells Fargo to join the ten most valuable companies on Earth.
Source: Tencent
