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Tencent profits increase 37 percent in Q1 2013, attributes growth to web games

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Tencent Holdings, the Chinese online entertainment company which holds a majority stake in League of Legends dev Riot Games and 40 percent of Epic Games, saw a 37 percent rise in net profits during the first quarter of its fiscal year.

According to a Tencent financial report released today, net profit for the quarter which ended March 31 reached 4.04 billion yuan ($657 million), up from 2.95 billion yuan ($480 million) during the same period the previous year. Revenue for the company increased even more sharply, jumping 40 percent to 13.55 billion yuan ($2.2 billion) from 9.65 billion yuan ($1.57 billion) the prior year.

The company has showed varying levels of growth across its divisions, including its WeChat mobile chat platform and its e-commerce business. However, Tencent president Martin Lau told the Wall Street Journal that the company's most promising area of growth is its catalog of "high-quality" web games.

"Over time the Web game industry will become more high-quality-game oriented," Lau said. "The time when people slapped together a game in a few months and rolled it out and tried to get users for a few months and got high revenue, those days will be gradually gone."