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Tencent Rides Soaring Online Gaming Revenue to Post 65-Percent Rise in Q1 Profit



By Reuters | Updated: 21 May 2021

Chinese gaming and social media giant Tencent reported a forecast-beating 65 percent rise in quarterly profit on Thursday, while management reiterated the company’s focus on compliance as China steps up scrutiny on tech giants.

Tencent, the world’s largest gaming firm by revenue, booked profit of CNY 47.77 billion (roughly Rs. 54,180 crores) for the three months through March, higher than the average analyst estimates published by Refinitiv of CNY 35.45 billion (roughly Rs. 40,220 crores).

The results come as Chinese regulators have stepped up an anti-trust clampdown on internet giants, and have already penalised Tencent rival Alibaba $2.75 billion (roughly Rs. 3,120 crores). Reuters reported last month that Tencent was told by Chinese anti-trust regulators to pay a fine that could exceed CNY 10 billion (roughly Rs. 11,340 crores), give up exclusive music rights, and sell some of its music assets.

Tencent, along with Alibaba affiliate Ant Group, is also facing regulator scrutiny of its non-bank payment business.

Addressing a question on general regulatory compliance, Tencent president Martin Lau said the company is very focused on compliance and risk management, and very self-restrained in terms of the size of non-payment financial products. “When we look into internal review, and when we look… to make sure that we are compliant with the spirit of regulators, it’s actually relatively manageable,” said Lau. Tencent is also facing mounting competition from ByteDance, the owner of TikTok, and the similar short-video platform Douyin, which have made sizeable inroads into the video games business.

Tencent also said on Thursday the company is investing in business services, games, and short-form video content. Tencent, which gets 32 percent of its revenue from video games, unveiled more than 60 new titles at its annual video gaming conference last week. It is looking to launch a mobile version of its League of Legends game, and also a Pokemon game in partnership with Nintendo later this year.

Revenue rose 25 percent to CNY 135.3 billion (roughly Rs. 1,53,460 crores), versus market expectations of CNY 134.39 billion (roughly Rs. 1,52,440 crores).

Tencent said revenue from online games grew by 17 percent.

© Thomson Reuters 2021


Online Gaming Platforms Involving Game of Chance Treated as Illegal, MoS IT Says



By Agencies | Updated: 3 August 2022

Betting and gambling are unlawful in most parts of the country and online gaming platforms are treated as illegal when game of chance is involved in those platforms, Parliament was informed on Wednesday. Minister of State for Electronics and IT Rajeev Chandrasekhar, in a written reply in the Lok Sabha, said all forms of gambling and betting come under the purview of state governments and they have enacted laws to deal with the same within their jurisdiction under List-II of the Seventh Schedule of the Indian Constitution.

“Betting and gambling is illegal in most parts of the country. Online gaming platforms are intermediaries and they have to follow the due diligence as prescribed in the Information Technology (IT) Act, 2000 and the Rules thereunder.

“MeitY regulates all the intermediaries as per the IT Act and the Rules therein. Online gaming platforms are treated as illegal when game of chance is involved in those platforms,” the minister said.

In response to a question on steps being taken by the government to prevent crimes occurring due to spread of online gambling and betting, Chandrasekhar said ‘police’ and ‘public order’ are state subjects and states and union territories are primarily responsible for the prevention, detection, investigation and prosecution of crimes through their Law Enforcement Agencies (LEAs).

“The Law Enforcement Agencies (LEAs) at Centre and States take appropriate legal action as per provisions of law and when appropriate,” the minister said.

Last month, the Battlegrounds Mobile India, or BGMI, was reportedly removed from the Google Play store and Apple’s App Store following a government order. Google confirmed that it received a government order directing it to delist the popular online game, which is yet to be reinstated on both platforms.

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Nintendo Faces Dip in Quarterly Sales Amid Chip Shortages, Sold 3.43 Million Switch Units



By Reuters | Updated: 3 August 2022

Japan’s Nintendo sold 23 percent fewer Switch consoles in the April-June quarter than a year earlier following chip shortages, it said on Wednesday.

The Kyoto-based gaming company said it expected procurement to improve “from late summer towards autumn” and maintained its forecast to sell 21 million units in the year through end-March 2023.

“Demand remains stable in all regions,” Nintendo said in a presentation.

Nintendo, the company behind Super Mario sold 3.43 million units of its Switch console in the quarter, down from from 4.45 million a year earlier. It sold 23.06 million units last year.

It forecasts the second annual sales decline for its hybrid home/portable Switch device, which is in its sixth year on the market.

The company last October launched an upgraded Switch model with an OLED screen to drive interest in the system.

First-quarter software sales declined by 8.6 percent to 41.4 million units, while operating profit fell 15 percent to JPY 101.6 billion (roughly Rs. 6,020 crore), below analyst estimates.

Nintendo booked a JPY 51.7 billion (roughly Rs. 3,060 crore) foreign exchange gain from the weaker yen.

Investors are gauging the unwinding of a gaming boom among consumers who had been stuck at home during pandemic lockdowns.

Sony last week reported a 15 percent drop in PlayStation user engagement compared to a year earlier.

“Gaming is now bigger than ever, and a certain part of users stay on, but the party is certainly now over,” said Serkan Toto, founder of game industry consultancy Kantan Games.

Upcoming Nintendo games to support demand into the year-end shopping season include Splatoon 3, which will be released in September, and Pokemon Scarlet and Violet in November.

© Thomson Reuters 2022

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FIFA World Cup 2022 to Use Semi-Automated Offside Technology for Accurate Decisions



By ANI | Updated: 2 July 2022

FIFA has announced that semi-automated offside technology will be used at the FIFA World Cup 2022 in Qatar starting on November 21, offering a support tool for the video match officials and the on-field officials to help them make faster, more accurate and more reproducible offside decisions on the biggest stage of all.

Following the successful use of VAR technology at the 2018 FIFA World Cup in Russia, FIFA President Gianni Infantino declared in The Vision 2020-23 that FIFA would strive to harness the full potential of technology in football and further enhance VAR.

In the ensuing three years, FIFA has indeed continued to be at the cutting edge of technology in the game. By working with Adidas and various partners, and especially with the Working Group for Innovation Excellence and technology providers, FIFA has spent the last few years further improving the VAR system, including the use of semi-automated offside technology.

The new technology uses 12 dedicated tracking cameras mounted underneath the roof of the stadium to track the ball and up to 29 data points of each individual player, 50 times per second, calculating their exact position on the pitch.

The 29 collected data points include all limbs and extremities that are relevant for making offside calls. Al Rihla, Adidas official match ball for Qatar 2022, will provide a further vital element for the detection of tight offside incidents as an inertial measurement unit (IMU) sensor will be placed inside the ball.

This sensor, positioned in the centre of the ball, sends ball data to the video operation room 500 times per second, allowing a very precise detection of the kick point.

By combining the limb- and ball-tracking data and applying artificial intelligence, the new technology provides an automated offside alert to the video match officials inside the video operation room whenever the ball is received by an attacker who was in an offside position at the moment the ball was played by a team-mate.

Before informing the on-field referee, the video match officials validate the proposed decision by manually checking the automatically selected kick point and the automatically created offside line, which is based on the calculated positions of the players’ limbs. This process happens within a few seconds and means that offside decisions can be made faster and more accurately.

After the decision has been confirmed by the video match officials and the referee on the pitch, the exact same positional data points that were used to make the decision are then generated into a 3D animation that perfectly details the position of the players’ limbs at the moment the ball was played.

This 3D animation, which will always show the best possible perspectives for an offside situation, will then be shown on the giant screens in the stadium and will also be made available to FIFA’s broadcast partners to inform all spectators in the clearest possible way.

The workflow of semi-automated offside technology and the connected ball technology have been successfully trialled at numerous test events and live at FIFA tournaments, including the FIFA Arab Cup 2021 and the FIFA Club World Cup 2021.

During these matches, the new technology was able to support the video match officials by helping them to make more accurate and more reproducible offside decisions in a shorter period of time.

The data collected during online and offline tests has been analysed and validated by the MIT Sports Lab, with TRACK at Victoria University scientifically validating the limb-tracking technology. Further insights into the technological capabilities of such multi-camera tracking systems are being provided by a research team at ETH Zurich.

More tests will be conducted in the coming months to fine-tune the system before a global standard is implemented to ensure that the new technology can be used in the world of football. All details on the semi-automated offside technology set-up and the connected ball technology will be presented to the teams that have qualified for the FIFA World Cup 2022 at the Team Workshop in Doha on 4 and 5 July and then shared with the public.

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ED Files Charge Sheet Against Two People for Operating PP Poker Online Gaming App



By ANI | Updated: 22 June 2022

The Enforcement Directorate (ED) has filed a prosecution complaint/charge sheet against two people for allegedly operating “PP Poker Online Gaming App” and placing illegal bets and gambling, ED said on Wednesday. The persons who have been charge-sheeted were identified as Hardeep Singh and Ankur alias Rahul Khanna, both the residents of Kolkata.

Earlier on April 6, the ED had arrested Hardeep and Ankur under the provisions of the Prevention of Money Laundering Act (PMLA), 2002 and also conducted searches on their residential premises as well as other club managers and agents situated in Delhi, Mumbai and Kolkata.

The recent charge sheet was filed before a special PMLA court in Goa’s Mapusa on June 3, under the provisions of PMLA, 2002. The Special Court had also taken cognizance of the same on June 17 and issued notices to the accused persons.

ED initiated the money-laundering investigation on the basis of the First Information Report registered by the Goa Police under various sections of the India Penal Code and Sections 3 and 4 of Goa, Daman and Diu Public Gambling Act, 1976 and Section 66-D of the Information Technology Act, 2000 for illegal gaming activities and siphoning huge money through secret networks and thus causing loss to the exchequer of the government.

The investigations by ED revealed that Hardeep and Ankur were operating a union namely ‘Mini-India’ on the said PP Poker online gaming app.

“Under this union, it is observed that around 25 to 30 clubs are being operated by different individuals,” said the ED.

“Through these clubs’ individual players are invited through WhatsApp chats for placing illegal bets through poker gaming app PP Poker. It is seen that the commissions were generated at the rate of 5 per cent to 10 per cent by these clubs on each table being run by them,” ED said.

The settlement of the commission and the betting amount is done illegally through hawala operators in cash or through anonymous crypto accounts with each individual player and union head by their respective club managers, said the agency, adding “the investigation has revealed that Hardeep Singh and Ankur had also invested Proceeds of Crime (POC) in the form of crypto accounts which were traced by ED”.

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Nvidia Says Sales of Video Game Chips to Decline in Current Quarter Due to COVID-19



By Reuters | Updated: 26 May 2022

Chip designer Nvidia forecast its sales of video game chips would decline in the current quarter, and startled some analysts by laying out new supply-chain issues resulting from China’s COVID-19 lockdowns.

Chief executive Jensen Huang told Reuters that Nvidia’s gaming business revenue will post a percentage drop in the mid-teens for the current quarter compared with the previous quarter.

“Overall the gaming market is slowing,” Huang said. Based on the softer market demand, Nvidia has chosen to reduce what it sells into the China market, he said. Nvidia is also taking a hit from Russia and sees “slower sell-through” in Europe, he said.

Nvidia shares fell 6.7 percent in extended trading, even though the company’s first-quarter revenues and earnings topped analyst estimates. The shares are down about 40 percent so far this year in tandem with a wider selloff in growth stocks over concerns of aggressive interest rate increases by the US Federal Reserve.

Concerns over inflation are spreading through the US economy, as consumers weigh purchases of items such as laptops and video game consoles.

Nvidia forecast second-quarter revenue of $8.10 billion (roughly Rs. 62,842 crore), plus or minus two percent. Analysts on average expected $8.45 billion (roughly Rs. 65,557 crore), according to IBES data from Refinitiv. The lower revenue forecast included an estimated reduction of about $500 million (roughly Rs. 3,879 crore) relating to Russia and the COVID lockdowns in China. Chief financial officer Colette Kress said the $500 million figure included about $400 million (roughly Rs. 3,103 crore) lost in gaming sales in China and Russia, and another $100 million lost in data center sales in Russia.

Kress told analysts on the earnings call that China’s COVID lockdowns, in addition to affecting logistics, were hitting consumer spending.

Dan Morgan, senior portfolio manager at Synovus Trust, said it was puzzling that a company that navigated the supply hurdles so well up to now suddenly hit a bump in the road.

Kinngai Chan, analyst at Summit Insights Group, said almost every tech company that has missed on outlook has blamed the Russia-Ukraine conflict and China’s COVID lockdowns. He expected Nvidia to face more downturns going forward.

One analyst was more optimistic.

“The pullback after hours is an overreaction to geopolitical events outside of the company’s control, not a weakening demand environment,” said Logan Purk, analyst at Edward Jones, noting the tumble in Nvidia’s share price.

Weaker prices for graphics chips and lower discretionary spending amid high inflation are likely to pressure Nvidia’s gaming business, according to experts.

A rout in the cryptocurrency market also hurt demand for its graphics processing units, which are favored by miners of cryptocurrency. Kress, the CFO, said in a statement on Wednesday that Nvidia had a 52 percent year-over-year decline in its “OEM and other revenue” category due to a drop in revenue from processors for cryptocurrency mining.

Still, demand from data center clients remained strong as more firms shift to the cloud and incorporate artificial intelligence in their operations. That and automotive sales will help offset the decline in gaming, said Kress. Data center revenue for the first quarter marked a record $3.75 billion (roughly Rs. 29,097 crore), up 83 percent year on year. Gaming revenue in the first quarter was also a record $3.62 billion (roughly Rs. 28,086 crore), up 31 percent year on year.

Revenue for the first quarter ended May 1 rose 46 percent to a record $8.29 billion (roughly Rs. 64,320 crore). Excluding items, the company earned $1.36 (roughly Rs. 105) per share, beating estimates of $1.29 (roughly Rs. 100).

© Thomson Reuters 2022

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PS5 to Overtake PS4 Install Base in Year 4, as Sony Eyes More PC and Mobile PlayStation Titles



By Reuters | Updated: 26 May 2022

Sony said it plans to ramp up production of its PlayStation 5 console as supply chain snarls ease, and signalled a radical broadening of its games portfolio, including more titles on PC and mobile.

The PS5, which went on sale in November 2020, undersold its predecessor in its second year due to component shortages which have roiled the electronics industry. But it is expected to close the gap in year three and overtake PS4’s install base the following year.

Beyond the initial ramp up, “we’re planning for heavy further increases in console production, taking us to production levels that we’ve never achieved before,” Sony Interactive Entertainment CEO Jim Ryan told an investor briefing.

While COVID-19 lockdowns in China continue to create supply chain uncertainty, “things are definitely improving,” Ryan added.

Sony has forecast PS5 sales of 18 million units in the business year to end-March compared to 11.5 million a year earlier.

Outlining a shift by PlayStation away from just concentrating on single player games exclusive to its platform, Ryan said more PC and mobile titles will be on offer in addition to live service games, which provide continuous updated play.

While PS4 and PS5 titles are expected to make up more than two-thirds of releases this year, PC and mobile titles will make up almost half of new games in 2025.

“The initiatives to broaden our audience… will have a fundamental effect on the shape of our game portfolio,” Ryan said.

With the shift, PlayStation is aiming to keep pace with industry change that has seen cloud technology and the increased computing power of smartphones untether users from bulky hardware and more money spent by gamers in free-to-play online titles.

Amid much speculation that the metaverse, or the idea users will spend more time in simulated environments, will upend industry business models, Ryan said many consumers will continue to play games as before.

“There will be many, many individual players who prefer to enjoy games in the way that they have played them from the past 30 years or more,” Ryan said.

© Thomson Reuters 2022

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