Tencent restructures to combat Alibaba's booming cloud business

Tencent restructures to combat Alibaba's booming cloud business

Chinese tech and games giant Tencent has reshuffled its business in what appears to be a bid to stave off competition from regional rival Alibaba.

The firm announced its first restructure in six years, bringing all of its content business groups under one roof while making a new group for cloud and smart industries.

This latter move is likely a means of fighting off competition from fellow Chinese company Alibaba Group whose cloud tech business has made it one of the world's fastest growing companies.

As reported by Reuters, Tencent will "further explore the integration of social, content and technology that is more suitable for future trends, and promote the upgrade from consumer internet to industrial internet”.

It's likely that Tencent is trying to reduce some of its overhead in the wake of an uncertain future. Though one of the world's biggest companies and certainly the largest in the video game, the Chinese giant is facing a number of issues.

The firm saw a massive drop in value between January and August 2018 losing $164bn, while $20bn was cut from Tencent's value after China's content regulator announced new restrictions on video games in the region due to, ironically, a rise in shortsightedness in the youth. The company saw its first quarterly decline ever this year.

Oh, and Tencent is currently unable to monetise its massively successful PUBG Mobile due to the aforementioned issues with China's content regulator.

PCGamesInsider Contributing Editor

Alex Calvin is a freelance journalist who writes about the business of games. He started out at UK trade paper MCV in 2013 and left as deputy editor over three years later. In June 2017, he joined Steel Media as the editor for new site In October 2019 he left this full-time position at the company but still contributes to the site on a daily basis. He has also written for, VGC, Games London, The Observer/Guardian and Esquire UK.